CAPE TOWN – The Financial Sector Conduct Authority (FSCA) has fined Tongaat Hulett R20 million after the discovery of significant accounting irregularities at the property and sugar group, the FSCA said in a statement on Monday.
But headline fine was R118.34m, the group will only pay R20m after the FSCA remitted the large portion of the fine because of the difficult financial position of the group, the need to avoid penalising innocent shareholders further, and to maintain Tongaat’s commitment to continue to co-operate with the FSCA in all future actions taken against any persons allegedly responsible for the wrongdoing.
This followed the FSCA’s investigation into alleged contraventions of the Financial Markets Act by Tongaat, after the group had to make multiple, significant restatements of its 31 March 31, 2017 and March 31, 2018 financial results.
The prior period errors extend back over the past six years and the cumulative correction has been reflected in the March 31, 2017 financial statements.
“The FSCA has therefore found that Tongaat made false, misleading or deceptive statements, promises or forecasts in its public statements to the markets in the prior period,” the FSCA said.
Tongaat reported a R285m headline loss in the year to March 31, 2020, which was an improvement on the R1.4bn headline loss reported the previous year.
Earlier this month Tongaat management said they would hear from the National Prosecuting Authority within six months, on whether the group’s former executives implicated in alleged accounting fraud and the wiping off billions of rands off the groups market capitalization last year, would be prosecuted. The group is also pursuing civil action.
Several previous directors, former CEO Peter Staude and CFO Murray Monroe and former executives in its Zimbabwean operations were implicated.