Tongaat Hullet’s Zimbabwe subsidiary, Hippo Valley Estates has warned its shareholders over dealings with the company’s securities.
This comes as the parent firm has is being dogged by an accounting scandal, which saw suspension of its securities on the Johannesburg Stock Exchange (JSE) last week.
Tongaat Hulett’s share was suspended last Monday after the JSE Sens announcement on May 31 that it would have to restate its equity by between R3.5 billion and R4.5 billion for its 2018 year.
The group has also delayed the announcement of its 2019 financial results to October, by which time it hopes to resume trading on the JSE.
Tongaat Hullet said at the time that the adjustments relate to the “reassessment of land sales against the revenue recognition criteria defined by International Financial Reporting Standards and the associated profit margins”, a revision to growing cane valuations and a reversal of capitalisation costs related to cane roots, projects, maintenance and inventory.
The Zimbabwean subsidiary says it will likely be impacted by investigations going on in South Africa, and is carrying out its own internal ‘reviews’.
“Shareholders are advised that Hippo Valley Estates’ ultimate parent company, Tongaat Hulett Limited (THL), has been conducting a strategic and financial review since February 2019. On 31 May 2019, THL announced that the financial review had revealed certain past practices that would result in the restatement of THL’s audited consolidated financial statements for the year ended 31 March 2018 (“2018 Financial Statements”). The Board of THL concluded that reliance on the 2018 Financial Statements is no longer appropriate and that the financial information therein should not be relied upon.
“To conclude the financial review and the associated forensic investigation, THL has delayed the publishing of its financial statements until October 2019 and has secured a voluntary suspension of the listing of its shares on the Johannesburg and London Stock Exchanges, while these reviews are completed.
“In light of the above, the Board of Hippo Valley Estates would like to advise members that it is not aware of any deliberate or fraudulent errors, misstatements or financial malpractices by the Company in the financial information previously released, that might have been aimed at misleading the investing public,” said Hippo Valley in a statement to the Zimbabwe Stock Exchange.
“Hippo Valley Estates adopted the THL accounting policies and as such, any changes to the Group accounting policies that may result from the THL review of its financials are likely to impact the Company’s financials. As a result, the Board is performing its own internal review of the Company’s financial statements to critically assess the Company’s accounting policies (compared to requirements of International Financial Reporting Standards) in the context of dynamics in the local environment.”
Hippo Valley said the review of the company’s financials has resulted in a delay in the release of the company’s financial results for the year ended 31 March 2019 due by 30 June 2019, which will now be published on or before 31 July 2019, following the granting of an extension by the ZSE for the publication of the abridged audited financial results.