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Oceana looking forward after dealing with problems at its executive level

CORPORATE governance issues at fishing group Oceana, which recently saw its auditor PwC walk out due to a strained relationship, had been limited to three executives at head office.

CORPORATE governance issues at fishing group Oceana, which recently saw its auditor PwC walk out due to a strained relationship, had been limited to three executives at head office.

Published Jun 14, 2022

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Corporate governance issues at fishing group Oceana had been limited to three executives at head office, with a stronger operational second half anticipated.

This is according to the head of its audit committee, Zariane Bassa, and lead non-executive director Peter de Beyer, who were interviewed yesterday.

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The group recently saw its auditor, PwC, walk out due to a strained relationship.

The group this month reported a difficult first half to March 31, with revenue falling 11 percent to R3.1bn, due mainly to lower stocks from Covid-19 supply chain disruption and civil unrest in KwaZulu-Natal, as well as Hurricane Ida in Louisiana, which affected fishmeal and fish oil production at the Daybrook operations in the United States. Headline earnings fell 51 percent to 126.4 cents per share.

Bassa said the group has also in the past two years had to deal with corporate governance issues, following an ENS forensic investigation dealing with claims by a whistleblower, other issues related to three senior executives that were identified during the investigation, and technical differences between accountants on one accounting issue, which had to be dealt with after the investigation, as well as the late publication of last year’s annual results.

Bassa said it was “okay” for auditors to sometimes disagree on technical issues, and the group had done all it could in asking relevant accounting authorities to deal with the matter.

The executives, the chief executive, chief financial officer and company secretary have since left the group, with the former chief financial officer dismissed.

De Beyer said there were few companies on the JSE that had been as thoroughly checked as Oceana during the investigation, and the group, in line with good corporate governance, had held governance road-shows and had made as much of the relevant documentation as possible publicly available.

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He said their interactions with shareholders had shown that shareholders had been frustrated by the group’s inability to communicate with them during the investigation, but they had indicated they were pleased with subsequent disclosures, actions and fully reported irregularities once the investigation was completed.

He said “not a penny” had been unaccounted for during the period.

The issues had also not affected the operational management of each of the fish species that the group fishes.

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He said these teams and staff of about 5 000 had done well to keep the group fishing through Covid-19 as an essential service, and in dealing with a host of other problems since then, such as supply chain bottlenecks and violence in KwaZulu-Natal that had cost about R100 million in Lucky Star product stock.

He said they traditionally report weaker first half results due to seasonal factors – for instance, Daybrook only starts its fishing season in April – and the group was looking forward to a better second half.

He said the executive team had been stabilised following the appointments of chief executive Neville Brink to December 2024, and of interim chief financial officer Ralph Buddle, who is also interim company secretary. Processes were underway to appoint a permanent chief financial officer and a new firm of auditors.

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