Unwelcome Publicity

Police Raid Overshadows Steinhoff IPO

Poco Source Poco
The shine has come off furniture retailer Steinhoff and its subsidiary, Poco.
  • Why it matters

    Why it matters

    The raid on Steinhoff’s European headquarters puts a serious dent in the funiture giant’s reputation just as it planned to profit from a public offering.

  • Facts

    Facts

    • On Monday, Steinhoff Group transferred its first listing on the South African stock exchange in Johannesburg – where the company has its headquarters – to the more lucrative financial center of Frankfurt.
    • The listing came a few days after it became public that Steinhoff’s European headquarters were raided by public prosecutors from Oldenburg.
    • Investigators have four managers in their sights, who, according to the public prosecutor, may have been massively overstating sales figures for years.
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    Audio

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The publicity for Steinhoff’s public listing in Frankfurt had been planned to perfection. In fancy black containers, the world’s second-largest furniture retailer presented its latest collections in a semi-circle at the entrance to the trading hall. A living room, bedroom and children’s room were on display.

In a written press statement, chief executive Markus Joosten highlighted the importance of the occasion: “Today is a very important day in the history of Steinhoff,” he said. The public listing would raise the group’s international profile, he added.

There was just one problem: Mr. Joosten wasn’t on hand for the big moment. His people explained he had neck pains that had made it impossible for him to travel to Frankfurt from the company’s headquarters in Cape Town, South Africa.

If Mr. Joosten had been present, he might have been able to clear up a few troubling things: On Friday, it emerged that Steinhoff’s European headquarters had been the subject of a raid last month by German police and prosecutors. The charge: Steinhoff may have overstated sales for a number of years.

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