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Pepkor's efforts to stand out from majority owner Steinhoff International were hit hard as the Johannesburg Stock Exchange fined the South African retailer for breaking the listing rules when it was split in 2017.
Key ideas
Part of the censorship related to a 500 million rand writedown by Pepkor in May, linked to a controversial pre-registration management incentive plan. The 5 million rand fine imposed by the JSE on Monday could make investors nervous about the potential for yet unknown Steinhoff-related issues, which had almost collapsed following an accounting scandal a year ago . The chain operator, including Pep and Ackermans, is also involved in a legal battle with former executives of shoe retailer Tekkie Town, which Steinhoff bought in 2016.
Market reaction
Pepkor shares have fallen 25% since Steinhoff announced almost a year ago that he had discovered accounting irregularities and that his CEO had resigned.
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Pepkor said that he was working "intensively to improve his disclosure where necessary and appropriate." Do not underestimate the fact that Steinhoff's problems prevent management from running the business, said Syd Vianello, independent retail badyst.
© 2018 Bloomberg L.P
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