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Tongaat shares suspended to ‘protect investors’

Hippo Valley and Triangle Estates’ JSE listed parent Tongaat Hulett has requested the suspension of its listing on the Johannesburg Stock Exchange amid an investigation.

Tongaat Hulett
Tongaat Hulett

According to a shareholder notice issued on Monday afternoon, the company’s listing on both the JSE and the London Stock Exchange has been suspended.

This decision by the board comes following a delay in the publication of the company’s financial results. Shareholders were advised on May 31, 2019, that the financial results for March 31, 2018, cannot be relied upon and will be restated. This has had implications for the reliance of the interim results for the period ended September 30, 2018, and the full 12 months ended March 31, 2019.

Tongaat, which has operations in South Africa, Mozambique and Zimbabwe, said last month that its 2018 results could face a potential hit of up to R4,5 billion ($306 million) following a review of its accounting practices.

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“Owing to the board’s concern that there is insufficient information in the market to enable investors to make informed decisions, the board has voluntarily approached the JSE with a request for a suspension of the listing of the company’s securities.

“The JSE has granted this request, and accordingly the listing of the Company’s securities on the JSE has been suspended. The listing of the securities on the London Stock Exchange, on which the company has a secondary listing, has also been suspended,” the notice read.

It reiterated that it aimed to publish its financial results for the year ended March 2019 by the end of October and said its shares would resume trade then, or earlier if sufficiently reliable information can be released.

The board intends to publish audited financial statements for the year ended March 31, 2019, by the end of October 2019, the notice read. The board will reinstate the listings at a appoint in time, or earlier, when “sufficiently reliable information” can be released.

Hulett’s board has said the move is intended to “protect investors” as there is “insufficient reliable financial information” in the market for informed decisions to be made. This is a risk of speculative trading.

The suspension will also allow management more time to complete the restatements and for the completion of a forensic investigation, the notice read. Thee company is also embarking on a strategic review for a turnaround strategy.

“This decision has not been taken lightly. Whilst the board is conscious that some shareholders or potential investors would prefer to retain the ability to buy and sell shares, the board believes that the temporary suspension is in the best interests of shareholders as a whole,” the board stated. – Fin24.