JSE not halting trade despite Steinhoff bloodbath

Cape Town - The JSE has decided not to suspend the listing Steinhoff International or halt trading of its shares, saying there is at this stage “no compelling reasons to do so”.

This is despite the share price losing 50% in the first 90 minutes of trade on Friday to last trade R5.30, down 47% from the previous day's trade.

Steinhoff is dual-listed on the JSE and the Frankfurt Stock Exchange in Germany. 

Shares in the multinational retailer, which is headquartered in SA and registered in Holland, have declined precipitously since Wednesday morning, after its board announced late on Tuesday that its CEO Markus Jooste was stepping down “with immediate effect” amid an accounting scandal. 

The shares closed trading on the JSE at R46.25 on Tuesday before the company announced that it had approached PwC to launch an independent investigation into accounting irregularities, and that SA billionaire Christo Wiese would step in as executive chairperson in the interim following Jooste's resignation with immediate effect.

The JSE said it has measures in place to deal with any trading volatility events and its dynamic and static trading circuit breakers were triggered as specified for trading in Steinhoff shares.

• READ: A Steinhoff guide for dummies

“Should any instances of potential market abuse be reported or identified, the JSE will, in accordance with its regulatory duties and responsibilities, refer these to the Directorate of Market Abuse at the Financial Services Board.

“The JSE will continue to engage with the company and its sponsor and will monitor developments to ensure the integrity of its market.”

More information 

While it has chosen to keep trade in the shares going, the JSE said that it had requested Steinhoff and its sponsor to detail what “accounting irregularities” it had redflagged.

On Tuesday Steinhoff’s supervisory board in a statement advised shareholders that “new information has come to light which relates to accounting irregularities requiring further investigation”. 

It did not provide further information.

 The global retailer’s share price dropped to under R6 on Friday morning from R46.25 on Tuesday before the company made its announcement, a decrease of some 87%.