Steinhoff. Picture: SUPPLIED
Steinhoff. Picture: SUPPLIED

Embattled Steinhoff International's share price fell below R1 for the first time in almost a month on Thursday, after the Financial Sector Conduct Authority (FSCA) slapped it with record R1.5bn fine for misrepresenting its finances to the market.

Steinhoff will only need to pay R53m of the fine, with the FCSA noting the retailer's current financial position and co-operation with authorities. The substantial remittance would also avoid penalising innocent shareholders further, Steinhoff said.

Steinhoffs share price slipped to 99c on Thursday, but at 11.20am had recovered a little and was down 2.83% at R1.03.

Steinhoff uncovered a €6.5bn (about R110bn) hole in its accounts in 2017, causing a share collapse and multiple lawsuits from former business partners and aggrieved shareholders that include former chair Christo Wiese. The company's high debt levels and the prospect of costly lawsuits has called the underlying value of the company's equity into question.

Wiese has put in a claim equivalent to R59bn, about 14 times more than Steinhoff’s R4.6bn market capitalisation.

In March 2019, Steinhoff released an 11-page summary of the report, which revealed that a “senior management executive”, subsequently identified as former CEO Markus Jooste, allegedly inflated the group’s assets between 2009 and 2017. Jooste has denied any wrongdoing.

FSCA head of the market abuse investigation team Alex Pascoe had told Parliament earlier in September the authority was engaged in ongoing investigations into insider trading, which were close to completion and would be presented to FSCA for decision by October 2019.

The investigation relates to allegations that Jooste provided inside information to a third party and encouraged the person to trade on the information, which he did.

With Linda Ensor

gernetzkyk@businesslive.co.za