Tongaat Hulett suspends trading of shares on JSE

Tongaat Hulett suspends trading of shares on JSE

Photo: iStock

The company’s descent into corporate scandal was hastened last week with confirmation that they had overstated last year’s figures.

In a SENS announcement on Monday, agriculture and agri-processing business Tongaat Hulett said that due to its announced delay in the publishing of the company’s financial statements, and the continuing review into past financial practices, the board had asked the JSE to suspend the listing of the company’s securities with immediate effect.

The secondary listing in London was also suspended.

The board said it was now aiming to publish the audited consolidated financial statements for the year ended 31 March by the end of October and reinstate the listings then, or possibly earlier.

“At the same time, the company is continuing to formulate its ongoing strategic review and comprehensive turnaround strategy entailing, inter alia, cost reductions, possible sales of certain assets, restructuring of operations and improvements in operating performance.”

Last week, Tongaat Hulett announced that it had overstated its 2018 figures and would have to adjust them downwards.

Alarm bells started ringing in February when Tongaat’s share price slumped nearly two thirds to 1650c over a period of days.

In their Monday statement, the board said they had now reached the conclusion that the need to restate the March 2018 financial statements meant they no longer had the necessary degree of certainty to update the financial information in the September 2018 interim results or the February 2019 trading statement with confidence.

The board’s primary objectives in requesting the suspension were:

  •  to protect investors in circumstances where there was insufficient reliable financial information in the market on which informed decisions can be made, and accordingly a risk of speculative trading;
  • to allow management more time to support the completion of the forensic investigation and the restatements, and to seek the reinstatement of the listings as soon as reasonably possible;
  • to address any possibility of there being two levels of information in the market arising from the various processes necessary to be undertaken to restructure and reduce the company’s debt;
  • and to allow the company to complete the strategic review, implement remedial actions and accelerate the turnaround strategy.

(Edited by Charles Cilliers)

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