Steinhoff's biggest shareholder and chairman, the billionaire Christo Wiese, has taken over as executive chairman temporarily.
The news prompted its shares to plunge to an eight-year low of 15.87 rand (87p) on the Johannesburg securities exchange, wiping 60 per cent of the company's value. That deal alone has cost the chairperson R87.7m ($6.4m). Steinhoff SNHJ.J SNHG.DE said chief executive Markus Jooste, who oversaw its expansion to one of the world's largest household goods retailers over almost 20 years, had resigned and PwC would undertake an "independent investigation".
Steinhoff shares had previously slumped 18% on Monday and Tuesday.
Jooste also resigned as a nonexecutive director of PSG Financial Services with immediate effect.
Wiese is South Africa's fourth-richest person with a net worth of $4.3 billion, according to the Bloomberg Billionaires Index.
Reuters reported last month that Steinhoff International did not tell investors about nearly $1 billion in transactions with a related company despite laws that some experts believe require it to do so.
Jooste, who had been with Steinhoff since 1988 and was CEO of Steinhoff International since 2000, was credited with growing the South African furniture manufacturer and retailer into Europe's second-largest player, behind Ikea, via a string of acquisitions including France's Conforama chain.
KAP Industrial Holdings, in which Steinhoff is a major shareholder, fell the most in six months even as the firm said in a statement it is independently managed. Steinhoff said at the time it was "fully committed" to support the probe.
The retailer has indefinitely delayed the release of financial results, which had been scheduled for Wednesday, citing a criminal and tax investigation in Germany.
Prosecutors have said they're looking into contracts valued in triple-digit millions of euros that appeared to have been conducted with third parties, but may have actually involved different units within the company.
Steinhoff had denied the allegations when they surfaced again in August. Steinhoff stock closed down 63 percent in Frankfurt, while its bonds also sold off sharply.