* Prosecutor says investigating former and current execs
* Says suspects revenues were inflated in Steinhoff’s books
* Manager Magazin says CEO among those being probed
* Steinhoff says rejects allegations made by magazine
* Steinhoff shares, bonds plummet (Adds prosecutor statement and company denial)
By Jan Schwartz and Maria Sheahan
HAMBURG, Aug 24 (Reuters) - German prosecutors said they were investigating four current and former executives of South Africa’s Steinhoff for suspected accounting fraud, allegations which sent the furniture retailer’s shares plummeting on Thursday.
Steinhoff denied any wrongdoing in response to allegations published in German monthly Manager Magazin which said that the investigation involved Steinhoff Chief Executive Markus Jooste and other senior managers.
The prosecutor’s office in the northern German city of Oldenburg, near where Steinhoff’s European business is based, said on Thursday that it suspected that revenue figures had been inflated by the sale of assets to purportedly external parties, which were actually associated with Steinhoff.
It said, without naming any individuals or identifying any business unit, that it was investigating an unspecified number of transactions, each of which was in the hundreds of millions of euros.
Steinhoff, Europe’s second-largest furniture retailer after IKEA, said substantial facts and allegations in Manager Magazin’s report were wrong or misleading.
“In the information published (by the magazine) we note that the source of some of the allegations is the former joint venture partner with whom the group’s subsidiaries are embroiled in litigation,” it said in a statement.
It said it had appointed legal and external audit firms to launch an internal investigation after tax investigators searched the German offices of its European business late in 2015.
“They have concluded that no evidence exists that any of the transactions raised by the investigation... can give rise to any contravention of any provision of German commercial law and were reflected correctly in the statement of financial position of the company,” it said.
It said it had engaged constructively with the authorities.
Steinhoff’s German-listed shares dropped to a record low, trading down 13.6 percent at 3.66 euros at 1410 GMT. Its Johannesburg-listed stock was down 15 percent at its lowest in almost three years.
The company’s bonds followed suit, with its 2025 800-million-euro notes slipping below face value, dropping 7 points in cash price terms to 93 cents to the euro, according to Tradeweb.
The prosecutor’s office said it had seized extensive data and documents as part of its investigation, which it said would likely take several months to evaluate. (Additional reporting by Tiisetso Motsoeneng; Editing by Mark Potter and Elaine Hardcastle)