International retailer Steinhoff has been downgraded by rating agency Moody’s. The rating agency downgraded Steinhoff to Caa1 corporate family rating which indicates high credit risk.
The furniture retailer has 40 different brands in 40 countries. Steinhoff’s share price dropped more than 90% after its CEO reigned in December. It announced that PWC was investigating it for accounting irregularities and its audit results were placed on hold.
Its woes seem far from over as rating agency Moodys has announced that the recent downgrade was due to the fact that the company’s credit profile remains risky.
It has also been placed for further downgrades.
Early in December Moody’s said it had downgraded the credit rating of retail holding group Steinhoff by four notches to B1 from Baa3 and put it under review for further downgrade over accounting irregularities.
Parliament’s Standing Committee on Public Accounts (Scopa) has said they will only call the executives of retail giant Steinhoff early in the new year.
Parliament is currently on recess.
Scopa chairperson Themba Godi has also called on the South African Revenue Service, the Reserve Bank, and the Independent Regulatory Body for Auditors and the Financial Services Board to urgently investigate Steinhoff.
Shares in Steinhoff fell by as much as 80% after the company reveal accounting irregularities.
The share price started to recover Monday after R200-billion was wiped off the company’s market value. Steinhoff is the parent company of retailers such as Ackermans, Shoprite, Incredible Connections and PEP.[Source: SABC]