Sugar-producer Tongaat Hulett says it needs to restate its financial statements for the year to March 2018 after identifying “past practices, which are of significant concern”.
“These past practices appear to have resulted in financial statements that did not reflect Tongaat Hulett’s underlying business performance accurately,” the company said.
The ongoing review incorporated an independent forensic investigation to see if these past practices were deliberate.
The group said it will probably have to reduce the equity on its 2018 balance sheet by between R3.5bn and R4.5bn. Tongaat also said its results for the year to end-March 2019 will probably only be released by October.
At the end of May 2018 — exactly a year ago — Investec wrote in a report that Tongaat’s CEO at the time, Peter Staude, should step down after the sugar producer’s “appalling” annual results.
Tongaat management said in November 2017, halfway through its 2018 financial year, that the group held a “positive outlook” for the full year to March.
“Apart from the interim guidance, which was inaccurate, the most frustrating aspect of the 2018 financial results is the painfully slow pace of unlocking value from Tongaat’s land portfolio,” Investec said in its report, authored by Anthony Geard.
Investec Group, which has other commercial ties to Tongaat, later distanced itself from the report and apologised to Staude for embarrassing him.
Meanwhile, Tongaat, which is under new management, said in its statement on Friday that it was “encouraged by the good progress being made with its comprehensive turnaround strategy”.
Tongaat’s shares were 6.6% down at R16.90 on Friday afternoon — close to their all-time low of R16.