There are concerns that what is happening at retail giant Steinhoff International will negatively affect South Africa’s assets.
Portfolio manager at Old Mutual Investment Group, Peter Brooke says the situation has also raised serious questions about South African corporate governance.
Steinhoff International’s shares crashed on Wednesday after it revealed accounting irregularities and its CEO quitting.
This has shocked investors who had backed the rapid reinvention of Steinhoff to an international retail empire.
Financial strategist Nerina Visser says the situation at Steinhoff International is unprecedented and is likely to affect other companies.
“Obviously, this is going to knock off on other companies that have invested in Steinhoff or Steinhoff has invested in. This is not just about a misunderstanding or some mistake in some way and this sort of reaction points to major, major problems going on there and it’s going to take some time really before all of that is really is unravelled,” says Visser.
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