Shares in South Africa-based German-listed retail giant Steinhoff fell nearly 60% on Wednesday after the company announced the resignation of its CEO in the wake of alleged accounting irregularities.
The chief executive's resignation will take effect immediately showing how serious it is.
Jooste has been replaced by the chairman Christo Wiese, who will work as executive chairman on an interim basis. In addition, Pieter Erasmus, the previous CEO of Pepkor Group, has agreed to join Wiese in an executive advisory capacity to assist with managing the group's various retail interests around the world, the company said. Jooste had been due to release the unaudited 2017 figures later today. Besides Australia and South Africa, it owns retail chains in the UK, Europe and the USA, as well as controlling other African retailing businesses. It controls Freedom Furniture and Snooze, Bay Leather Republic, Plush Le Cornu, the Original Mattress Factory, and the discount furniture outlet Poco (with huge stores in Sydney's west and southwest).
The move comes amid an investigation into accounting irregularities at the German firm, which is based in South Africa and is listed on the Johannesburg Stock Exchange.
Steinhoff SNHJ.J SNHG.DE said chief executive Markus Jooste, who oversaw its expansion to one of the world's largest household goods retailers over almost 20 years, had resigned and PwC would undertake an "independent investigation". The claims were that the company inflated revenues.
Steinhoff's board said that, in consultation with its statutory auditors, it had appointed PwC to launch an independent investigation.
The company also dropped a January 31, 2018 deadline for publishing its audited 2017 consolidated financial statements, saying it would only do so "when it is in a position to do so".
Steinhoff has previously denied those allegations.
A statement said: "The supervisory board of Steinhoff wishes to advise shareholders that new information has come to light today which relates to accounting irregularities requiring further investigation".
The company stressed that it still had profitable businesses in its portfolio and urged investors to "exercise caution" when trading its shares in the wake of the disclosures.