Embattled retailer Steinhoff International Holdings NV overstated profits and assets over a number of years, findings from a forensic investigation by PricewaterhouseCoopers show.
According to a summary of PwC's report, a small group of Steinhoff former executives and other non-Steinhoff executives, led by a senior management executive, implemented certain fictitious or irregular transactions that resulted in profit and asset values of Steinhoff being substantially inflated over an extended period.
The transactions over a period covering fiscal 2009 through fiscal 2017 amounted to €6.51 billion, the report posted on Steinhoff's website shows.
PwC's investigation also identified three principal groups of corporate entities — The Campion/Fulcrum Group, The Talgarth Group and The TG Group — that were counterparties to Steinhoff in the transactions that have been investigated.
The South Africa-based company, which has been unable to report its consolidated financial statements for the fiscal years 2017 and 2018, previously said its financial reports for fiscal years 2015 and 2016 need to be restated.
According to the summary report, Steinhoff is still determining the full financial impact of the findings of the investigation.
The financial effect will be reflected in the restated closing balances for the fiscal year 2015, which forms part of the restated the fiscal year 2016 accounts, as well as the fiscal year 2017 and fiscal year 2018 accounts. The financial statement approval process by the company's supervisory and management boards will take the PwC findings into consideration.
The South African company expects its 2017 and 2018 results to come out April 18.
Steinhoff, which owns Mattress Firm in the U.S., and Poundland in the U.K., disclosed Dec. 6, 2017, that it had appointed PwC to investigate accounting irregularities. CEO Markus Jooste resigned the same day with immediate effect.
Steinhoff does not intend to publish the full report by PwC because it is "confidential and subject to legal privilege and other restrictions."