Ex-Steinhoff CEO Said to Be Charged in German Criminal Probe

Former Steinhoff International Holdings NV Chief Executive Officer Markus Jooste is among four people charged in Germany for accounting crimes, a person familiar with the investigation said.

The case was filed about four months ago, according to the person who declined to be identified discussing private matters. Prosecutors in the city of Oldenburg on Thursday confirmed that they indicted three former executives and another manager over false accounting, without identifying anyone.

Ex-Steinhoff CEO Said to Be Charged in German Criminal Probe

Fake proceeds from bogus transactions were booked at some of the group’s units, according to the statement. The sham deals made it seem that assets were sold to third parties while they were in fact acquired by other companies close to the group.

The artificial transactions were allegedly used to manipulate balance sheets by more than 1.5 billion euros ($1.8 billion). Additionally, the value of real estate assets was inflated by 820 million euros, prosecutors said. The charges cover a period from July 2011 to January 2015.

In an interview on Thursday, Jooste’s German lawyer called the allegations inaccurate.

First Charges

Thursday’s charges are the first in the criminal cases over the scandal that brought the retailer, based in South Africa and listed in Frankfurt, to the brink of collapse. Deloitte LLP refused to sign off on the company’s financial statements in 2017, triggering a dramatic share-price disintegration.

Jooste resigned the same day, and has since been named by the company as central to a web of fraudulent transactions that artificially inflated profit and asset values over several years. He has denied the allegations.

While the company said it can’t comment on any specifics related to the investigation, it’s fully cooperating with the various prosecution authorities and regulators and “is eager that those responsible for past failings are brought to book.”

Steinhoff last week said it has made 1.6 million euros available for PricewaterhouseCoopers as it conducts additional forensic work to assist South African prosecutors’ investigation. The auditing company completed an earlier probe for the retailer that has not been made public.

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