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London/Johannesburg — It looked like Steinhoff International Holdings had reached escape velocity from South Africa’s deepening economic gloom: A furniture retailer emulating Ikea’s model and global ambitions, built by men with their own compelling rags-to-riches stories. Then the debt-fuelled rocket stalled and came crashing down. From her office overlooking Cape Town’s waterfront, Sygnia Investment Management CEO Magda Wierzycka watched on her computer screen on December 6 as Steinhoff’s shares began a two-day plunge that cut the price by 80% and lopped about €10bn from its market value. Steinhoff said it could not release its financial results; it was trying to figure out if there was a €6bn hole in the balance sheet; and CEO Markus Jooste had quit. All of a sudden, investors who had bet on Jooste and his billionaire chairman Christo Wiese were rushing to the exits. By the end of last week, Wiese had quit too. "People were expecting an explanation from Steinhoff," said Wierzycka,...

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