FRANKFURT - German prosecutors are investigating Steinhoff CEO Markus Jooste and some other senior managers at the furniture retailer in connection with suspected accounting fraud, monthly Manager Magazine reported, citing no sources.
It said on Thursday prosecutors in the northern German city of Oldenburg, near where Steinhoff's European business is based, have since 2015 been looking into whether revenues had been inflated in the South African retail group's books.
Steinhoff, Europe's second-largest furniture retailer after IKEA, did not immediately respond to a request for comment. The Oldenburg prosecutors office had no immediate comment. Steinhoff's German-listed shares dropped to a record low and were down 7.4 percent to 3.92 euros at 1126 GMT. Its Johannesburg-listed stock was down around 8 percent at its lowest in 2.5 years.
The company's bonds followed suit, with its 2025 800-million-euro notes slipping below face value, dropping 7 points in cash price terms to 93 cents to the euro, according to Tradeweb. Tax investigators searched the German offices of Steinhoff late in 2015.
The company said at the time that authorities were reviewing the balance sheet treatment of certain transactions involving transfers of participations and intangible assets between its European business and third parties. According to Manager Magazin, the investigation focused on various transactions, each in the hundreds of millions of euros.