Speculation of ‘Off-balance Sheet Entities’ behind the Steinhoff Collapse

Steinhoff’s market capitalization has already gone down by a quarter from its initial market value a week after the scandal surfaced, collapsing from the initial value of R240.5 billion to R76 billion in 5 days. The Johannesburg Stock Exchange has studied the possible clues and data given, the JSE has chosen to not suspend the listings on Steinhoff International as well as halt any trading within the market of South Africa that relates to trading any of the company’s shares, as given the current situation, no possible reasons are present to prevent them from doing so. Also, Steinhoff shares will also continue trading in Frankfurt.

Nevertheless, even as the company’s disclosure has already been released through their official news, a request made by the JSE requires that the company along with their sponsors for more details on the ‘accounting irregularities’ urgently. Viceroy Research has pointed out that Steinhoff’s odd hole in the balance book might link to a couple of irregularities found in the balance sheets that are confidential third-party objects. Viceroy Research continued by stating in a report that Steinhoff had already moved predatory consumer and two loan providers that are making loss towards an accounting irregularity. The plunge on the Steinhoff scandal has taken part in Africa’s all share index of the JSE, where it fell at fell to 58,010 points from the initial 1.64%.

The trend on Steinhoff’ news on the country’s foreign exchange reserves has been set to schedule the issue and to be done by the Reserve Bank. A vote completed by the Trading Economics has discovered that reserves will be expected to collapse from $48.9 billion to a slight fall at $48.8 billion. A forecast by the IEKKon the mining production has bounced back to 2.2% increase last October to 0.9% during Septembers contraction.