Tongaat pursues claims against executives

Sugar producer Tongaat Hulett said on Friday it was engaging with authorities and would be pursuing claims against 10 executives, after a PwC probe identified a number of undesirable accounting practices.

The PwC investigation identified practices that led to revenue being recognised in earlier reporting periods than it should have been, and expenses being inappropriately capitalised to assets.

This had led to overstatement of profits, while there was a “culture of deference” that resulted in employees not questioning accounting practices, the company said in a statement of key findings of the probe.

In June, Tongaat asked for its shares to be suspended after it was found that its financial results for the year to March 2018 could not be relied on.

Earlier in 2019, law firm Bowmans roped in PwC to conduct the forensic review to uncover whether the misleading financial information was deliberate.

At the time, Tongaat said the 2018 financial statements might be inflated by between R3.5bn and R4.5bn.

The company had identified 10 executives, and would be taking civil action to recover bonus and benefits, as well as make applications for various people to be declared delinquent directors, the company said.

Tongaat was also engaging with the SA Police Service and National Prosecuting Authority to provide relevant information, it said. — Business Day