HARARE – Embattled sugar producer Tongaat Hulett’s Zimbabwe subsidiary Hippo Valley Estates has been suspended from that country’s bourse after accounting glitches at the parent company resulted in a delay of the release of its financial results.
The Zimbabwe Securities Exchange (ZSE) said yesterday that it had suspended trade in the shares of Hippo Valley after turning down a further extension for release of its March 2019 financials.
Hippo Valley missed the June 30 deadline for the release of its full-year financials and also missed the extended deadline of July 31.
On August 1, Hippo Valley said it had missed the extended deadline again and stated that it would release the financials on or about August 14, but it has also missed this deadline.
It is against this backdrop that the ZSE says it has recommended to the Zimbabwe Securities Exchange Commission that trade in Hippo Valley Estates shares be suspended.
Tongaat also controls non-listed Triangle Sugar Corporation.
“The Zimbabwe Stock Exchange advises members of the investing public that it has put a halt in the trading of Hippo Valley Estates Limited’s shares on the ZSE according to clause 4.13.2 of the ZSE trading rules and procedures,” ZSE chief executive Justice Bgoni said.
The suspension was in line with an application for voluntary suspension filed by Hippo Valley.
“This development has been necessitated by a formal request made by Hippo for the suspension of trading in its securities after it failed to publish its audited financial statements for the year ended March 31, 2019, as per the previous public notices,” he said.
Subsequent to this, the ZSE has now “formally requested the Securities and Exchange Commission of Zimbabwe (SECZim) to consider the application for the suspension” in line with Securities and Exchange Act.
“The investing public will be advised of the determination by SECZim as soon as it becomes available.”
In the year to the end of March 2018, Hippo Valley stated that operating profit amounted to $17 million, significantly up from the $13.4m recorded for the prior year.
The South African-based agro-processing group had to restate its previous financials to correct the misrepresentation of the company’s value after liabilities to investors.
A review of the previous financials had found that “certain past practices” did not reflect well on the firm’s financial position while total equity for the company had been overstated by as much as between R3.5 billion and R4.5bn.
Tongaat has also been suspended from the JSE.