Its stock tumbled by as much as 29% in Johannesburg.
Steinhoff International, which has operations in 30 countries, said it was unable to release its latest financial accounts as had been planned this morning because it had called in PwC.
That report said Jooste is among employees being investigated by German prosecutors in a 2015 case linked to possible accounting fraud.
The dramatic sell-off was triggered by the announcement that chief executive Markus Jooste had resigned and "accounting irregularities requiring further investigation" had been uncovered.
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Steinhoff's chairman, retail tycoon Christo Wiese, alongside former Pepkor CEO Pieter Erasmus, will run Steinhoff until a new CEO is appointed, a statement issued at 10.45pm on Tuesday night said.
The Steinhoff holding company is based in Amsterdam for tax reasons and has its primary listing on the Frankfurt stock exchange.
Steinhoff nearly merged with Shoprite earlier this year which would have formed Africa's largest retailer but the plans were scrapped in February.
Steinhoff said Wiese would "embark on a detailed review of all aspects of the company's business with a view to maximising shareholder value", but its South African shares slumped 65 percent to an eight-year low of 15.87 by 1120 GMT.
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The JSE's director of issuer regulation John Burke told Reuters the bourse was in talks with Steinhoff to get answers on the investigation of possible accounting irregularities.
It is not now clear what "accounting irregularities" the company is referring to in its statement.
The chief executive of Steinhoff African Retail (STAR), part of Steinhoff which includes the control of Shoprite, also resigned on Wednesday.
"In light of these developments at Steinhoff, STAR's existing CEO, Ben la Grange has chose to step down as CEO of STAR", the company said.
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