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Johannesburg exchange fines Tongaat over non-compliance

JOHANNESBURG (Reuters) – Johannesburg Stock Exchange (JSE) on Wednesday issued a public censure and a maximum fine of 7.5 million rand ($435,000) on sugar producer Tongaat Hulett Ltd due to non-compliance with its listing requirements.

The South African exchange operator said due to the company’s full co-operation and remedial actions after its internal review uncovered irregular accounting, it would suspend 2.5 million rand of the fine for five years on condition that Tongaat does not breach the listings requirements during the period.

The company posted interim revenue of 8.085 billion rand in January.

The JSE said the company’s financial information published for the period 2011 to 2018 did not comply with international financial reporting standards and was incorrect, false and misleading.

“The accuracy and reliability of financial information published by companies are of critical importance in ensuring a fair, efficient and transparent market,” the JSE said in a statement.

PwC in November found that certain Tongaat senior executives overstated profits and certain assets by using “undesirable accounting practices”, prompting the agriculture and agri-processing company to restate its 2018 financials.

The exchange operator said restatements of the financials for the 2018 financial year were material and included a drop in total assets of around 10 billion rand.

Its restated headline earnings per share (HEPS) showed a loss of 861 cents per share versus a previously stated profit of 534.8 cents per share.

HEPS is the main profit measure used in South Africa.

Tongaat, which produces a range of sugarcane and maize-based products, said it noted and accepted the JSE findings.

“The Tongaat Hulett Board and management remain committed to good corporate governance and have undertaken to prevent a recurrence of a transgression of the Listings Requirements,” Tongaat said in a statement.

($1 = 17.2349 rand)

(Reporting by Tanisha Heiberg; editing by Louise Heavens and Jason Neely)

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