(Adds Moody's, details)
JOHANNESBURG, Dec 8 (Reuters) - Steinhoff's shares fell by another 40 percent on Friday 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 in a statement.
Steinhoff admitted to accounting problems earlier this week and its veteran chief executive Markus Jooste quit, wiping billions of dollars off its stock market value and raising questions about its liquidity and future.
The company's bonds have also been hit hard and on Thursday Moody's downgraded Steinhoff's debt to B1, or highly speculative, from Baa3, the lowest investment grade rating.
A lower credit rating means that the borrower usually has to pay more to borrow from investors and can reduce the value of its existing debt, forcing some holders to sell.
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 United States.
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 43 percent down at 5.61 rand and nearly 40 percent lower in Germany. Over the past three days, it has shed more than $12 billion in market value. ($1 = 13.7095 rand) (Reporting by Tiisetso Motsoeneng and Tanisha Heiberg; Editing by Greg Mahlich and Alexander Smith)