R1m JSE fine for Steinhoff
Steinhoff International was fined R1m and received a public censure from the JSE on Tuesday morning for twice failing to pass on news of credit ratings cuts to investors.
The first occurrence was on December 7‚ when Moody’s published on its website that it had cut Steinhoff’s credit rating by four rungs from Baa3 — one notch above junk — to B1‚ dropping the furniture retailer directly into “highly speculative” and jumping over the three levels of “noninvestment grade“.
Moody’s made this announcement a day after Steinhoff announced the resignation of its CEO Markus Jooste and said “new information has come to light today which relates to accounting irregularities requiring further investigation“.
“According to Steinhoff‚ it was informed by Moody’s of the publication of the rating downgrade on December 8 2017 at 12.29am (SA time). Steinhoff failed to publish an announcement on Sens on December 8 2017 to inform stakeholders of Moody’s rating action in accordance with the aforementioned listings requirements‚” the JSE said in Tuesday’s statement.
Moody’s included a warning when it first knocked Steinhoff into junk status that it was considering further downgrades — which came three weeks later on December 28‚ when it cut Steinhoff’s credit rating a further three notches to Caa1‚ or “substantial risks“.
Again‚ Steinhoff failed to promptly inform the market as required‚ the JSE said.
“According to Steinhoff‚ it was informed by Moody’s of the publication of the further rating downgrade on December 28 2017 at 12.03am (SA time). Steinhoff only published an announcement on Sens at 5.33pm‚ after market close on that day‚ to inform stakeholders of Moody’s further rating action in accordance with the aforementioned listings requirements‚” the JSE said.
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