As recently as November 3, Wiese bought 2 million Steinhoff shares at more than three times the price at which they were trading in Johannesburg on Wednesday.
Chairperson of Steinhoff Holdings International, Christo Wiese will step in as interim CEO after Jooste's resignation. The board has also approached auditor PWC to investigate allegations of irregular accounting practices. Steinhoff's Markus Jooste has stood down after nearly 20 years in the job.
The company said its Supervisory Board, akin to a board of directors for USA -based companies, has hired the accounting firm PWC to conduct an independent investigation of its finances.
The company announced that new information had emerged which required investigation into accounting irregularities, and said it was unable to publish its financial results as a result.
Steinhoff International debt also plunged, with €800m of senior unsecured bonds due in 2025 falling as much as 41 cents on the euro, to 42 cents, according to data compiled by Bloomberg. Steinhoff said it plans to issue audited 2017 consolidated financial statements "when it is in a position to do so" and will determine whether it needs to restate financial statements from past years. Steinhoff has been aggressively expanding in developed markets since moving its primary share listing from Johannesburg to Frankfurt in 2015, snapping up Britain's Poundland, US-based Mattress Firm and Australia's Fantastic.
Kepler Cheuvreux said the pending tax and accounting investigations "could show severe irregularities".
The investigation could result in prior years' financial statements needing to be adjusted.
Omri Thomas of Abax Investments, the 15th largest investor in Steinhoff, said because there was no immediate prospect of any clarity on its results, it was hard to put a value on Steinhoff and this had prompted the severe share reaction.
Steinhoff spun off its Africa business earlier this year, but retains a majority stake in the firm. Theodore de Klerk was appointed as his replacement, PSG said on Wednesday.