Former KPMG Partner Richard Heis appointed to helm Steinhoff restructuring

A former Head of Restructuring at KPMG has been appointed Chief Restructuring Officer of Steinhoff International. Richard Heis, who retired from the professional services firm in 2017, will use his 25 years of experience in restructuring to help the beleaguered retailer, as investigations into Steinhoff’s “accounting irregularities” continue.

Steinhoff International is an international retail holding company that deals mainly in furniture and household goods, and operates in Europe, Africa, Asia, the United States, Australia and New Zealand. The South African-based, Frankfurt-listed owner of familiar UK high-street discounter Poundland is currently embroiled in South Africa's biggest ever accounting scandal, and recently admitted that it had identified potential “additional material impairments” beyond the €6 billion in assets that it has already flagged as suspect.

Steinhoff International Holdings said a review by auditors at PwC into its accounts is focused on certain off-balance sheet structures and deals with related parties and is likely to find that some assets, revenue and profit figures have been overstated. PwC is just one of a number of professional services firms which have been involved in attempts to salvage the firm.

The retailer also appointed two advisory firms in December, as it attempted to deal with major financial difficulties. The group’s share price had already experienced a nose-dive of 85%, wiping more than $10 billion off its market value, following the disclosure of the company’s accounting problems, with Moelis and AlixPartners advisors being drafted in “to assist on liquidity management and operational measures.”

In January, Steinhoff said it has “largely addressed” its short-term liquidity requirements, after securing funding from subsidiary companies, while its Asia Pacific businesses continued “discussions with their banks to secure additional funding by mid-February.” Now, as the troubled group continues efforts to turn around its fortunes, Steinhoff has appointed restructuring expert Richard Heis as Chief Restructuring Officer (CRO).

Heis previously worked as global head of restructuring at KPMG, having racked up 25 years of experience during his time with the company. Having joined the Big Four firm in 1983, he became a Partner in 1997, specialising in financial sector insolvencies, complex cross border assignments, and all forms of restructuring and insolvency. Upon becoming Global Head of Insolvency, Heis was also named a Non-Executive member of KPMG’s UK Board, before retiring from his role last year. The London-based former restructuring professional was succeeded by Blair Nimmo – one of KPMG’s joint administrators for ailing airline Monarch – in November last year.  

As the new CRO of Steinhoff, Heis – who is also still a Director of Insol the worldwide insolvency body – has his work cut out for him. While his appointment was aimed at helping to create a window of stability for the embattled corporation, revenues have continued to slide by 5% during the first quarter of 2018.

Commenting on luring Heis out of his retirement, Heather Sonn, acting chairperson of Steinhoff, said, “We are delighted that Richard has agreed to join the group at this critical time and we are sure that his expertise and experience will bring significant benefit to the group as Steinhoff develops a plan to address the group’s financial indebtedness.”