Steinhoff's shares fell by another 40% today after Moody's cut its credit rating and raised concerns about the company's governance, deepening the South African retailer's problems and investor losses.
"Given that allegations of accounting irregularities were raised and rebutted in August 2017 and again in November 2017 it calls into question the quality of oversight and governance at Steinhoff," Moody's said.
Steinhoff admitted to accounting problems earlier this week and its veteran chief executive Markus Jooste quit.
This wiped billions of dollars off its stock market value and raising questions about its liquidity and future.
Steinhoff used debt to fund an acquisition strategy that turned it from a South African furniture group to an international retail empire including brands such as Poundland in Britain and Mattress Firm in the US.
The company, whose primary listing is in Frankfurt, has been under investigation for suspected accounting irregularities by the state prosecutor in Oldenburg, Germany since 2015.
Four current and former Steinhoff managers are under suspicion of having overstated revenue at subsidiaries, German prosecutors said this week.
Steinhoff has denied any wrongdoing in relation to the German allegations and said that they related to whether revenue was booked properly and taxable profit correctly declared.
It has not given any details about the "irregularities" it identified this week and has sought to reassure investors about its liquidity as its stock has tanked.
Shares in the company were down 43% in South Africa and nearly 40% lower in Germany. Over the past three days, it has shed more than $12 billion in market value.
The collapse has left South African tycoon Christo Wiese, Steinhoff biggest shareholder and chairman, seriously out of pocket, eroding more about $2.8 billion of his net worth.
The Steinhoff developments have prompted an urgent call by South Africa's Finance Minister Malusi Gigaba for pension fund managers to report back on their exposures to the sudden sell-off, saying that the accounting issue was a "grave concern".
South African Deputy President Cyril Ramaphosa said the Steinhoff scandal was "catastrophic".
South Africa's Public Investment Corporation (PIC), the retailer's second-largest shareholder, said the allegations against Steinhoff were "serious concerns".
The PIC, which manages civil servants' pension funds, said in a statement it holds around 10% of Steinhoff's stock.
Steinhoff has responded by putting 76-year-old Wiese, one of the most respected business leaders in South Africa, in charge for now and calling in PwC to investigate the accounting problems.
It is also seeking to reassure investors by saying it has enough liquidity to fund its existing operations.
Wiese, who describes himself as a "realist, pragmatist", started his budget clothing retailer Pepkor in the 1960s, in Upington on the southern edges of the Kalahari desert.
He is best known for transforming budget grocer Shoprite from just six shops in the 1970s to hundreds of stores across Africa.
