Steinhoff shares surge on appointment of new CEO
Steinhoff has appointed its commercial director Louis du Preez as CEO to replace Danie van der Merwe, a long-time Steinhoff director who took the top job in December after former CEO Markus Jooste quit when news of the accounting scandal broke.
The Steinhoff share price gained nearly 17% on the announcement that Du Preez, a corporate lawyer, would be leading the final stages of the group’s restructuring.
It closed 8.2% up at R1.98, its highest level in more than three weeks, but remains about 96% lower than in December 2017, when the group reported accounting irregularities that wiped nearly R200bn off the retailer’s market capitalisation.
Du Preez, who joined Steinhoff in June 2017, was previously a director at law firm Werksmans, and has experience in restructuring, mergers and acquisitions, banking and business rescue.
In December 2017 he was appointed commercial director of Steinhoff and a member of the management board.
Van der Merwe, who has denied involvement in the scandal, will stay on in a support role until December 2019.
Heather Sonn, group chairperson, described Du Preez as the ideal candidate to lead Steinhoff. "As CEO he will provide important continuity for the group and all stakeholders."
A spokesperson for Steinhoff confirmed that while Du Preez was a director at Werksmans, the firm had acted for Mayfair Speculators. The controversial private company was controlled by Jooste and was forced earlier in 2018 to sell off a string of racehorses and other assets in a bid to repay R1.2bn owed to Absa, Investec and Sanlam.
Ron Klipin of Cratos Capital said the appointment of a lawyer to head Steinhoff at this stage was appropriate.
"The head office probably doesn’t have that much control over the operations of its global chains; it’s more important to have someone with restructuring skills who can keep driving the process forward," he said.
"The big question now is whether Steinhoff will remain intact. It appears to be going in the right direction."
The collapse in the share price has resulted in at least three class action suits, as well as legal challenges by former chairman and former biggest shareholder Christo Wiese and shareholder GT Ferreira, a co-founder of FirstRand.
An investigation by auditors PwC into the company’s finances, which is due to be released within weeks, could trigger further legal action.