September 12, 2019 / 10:33 AM / 4 days ago

South African regulator fines Steinhoff for misleading markets

A logo is seen on the facade of a discount furniture retailer Conforama store in Bordeaux, France, June 18, 2018. REUTERS/Regis Duvignau/File Photo

JOHANNESBURG (Reuters) - South Africa’s market regulator has fined retailer Steinhoff a record 53 million rand ($3.6 million) for making “false, misleading or deceptive statements” to the market, the company said on Thursday.

Steinhoff disclosed the hole in its accounts in December 2017 which shocked investors and wiped more than 200 billion rand off its stock market value.

The company said the penalty would have been 1.5 billion rand, but was reduced in recognition of the fact that the fraud was perpetrated by former employees and that the company had cooperated with regulators.

“Even after this reduction it remains the largest single fine ever imposed by the FSCA,” Steinhoff said in a statement, quoting the regulator.

The Financial Sector Conduct Authority (FSCA) ruled that multiple, significant restatements of the company’s accounts after December 2017 supported the conclusion that Steinhoff failed to meet its obligations under the Financial Markets Act.

Steinhoff CEO Louis du Preez said there were no more further FSCA enforcement actions outstanding against the Steinhoff.

“We are pleased that the matter has now been brought to a conclusion and that the FSCA has recognised our full co-operation with the investigation,” said Preez.

An independent report by PwC released in March found Steinhoff had overstated profits over several years in a $7.4 billion accounting fraud involving a small group of top executives and outsiders.

($1 = 14.6256 rand)

Reporting by Tanisha Heiberg; Editing by Mark Potter

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