Tongaat Hulett Scandal explained: All about Tongaat Hulett financial Scandal: On Tuesday, 18th January 2022. Sugar giant Tongaat Hulett asserted that it has asked a legal team to continue recourse from auditing company Deloitte. Deloitte which has been the auditor of the company for several decades, signed off on irregularities in its financial statements from the year 2011 to 2018. The misstatements augmented the financial position of Tongaat by almost R12 billion. Trading in the shares of the company was suspended in the year 2018 after news of the irregularities sent its share into free fall. Last week, Tongaat Hulett asserted that it is filling an R450 million civil claim against some of its ex-executives-including ex-CEO Peter Staude and ex-CFO Murray Munro-for the blown up of profits. Follow More Update On CmaTrends.com
Tongaat Hulett Scandal explained
On Tuesday, at a general meeting, Tongaat Hulett chair Louis van Zeuner stated that the company was also planning to take action against Deloitte. At the general meeting, a majority of shareholders approved vast rights problems. The rights problems will watch the firm issue new shares worth up to R4 billion. The total market of the company capitalization presently is only R703 million. Some R2 billion of the rights problem is underwritten by a Mauritius-based company called Magister Investments.
The group is supervised by the family of Rudland, who owns a range of Zimbabwean businesses, including the cigarette group “Gold Leaf Tobacco Corporation.” The family already possesses around 10% of Tongaat, as per an amaBhungane report. The rights problem will most likely give it control of the firm. The share price of Tongaat fell 3.5% to 529c.
Tongaat Hulett financial Scandal
Virginia Horsley, the spokesperson of Tongaat Hulett informed the news website that a legal team has been assembled to involve Deloitte in this case. Horsley stated the timelines of the work of the legal team will be determined by the legal process and Tongaat Hulett was not able to provide particular timelines at this point.
Horsley said, “It is, though worth noting that recent example of similar lawsuit matters in the SA context suggests that it can be a slow process, usually dragging on for a number of years.” She stated Tongaat Hulett could only proceed in involved with Deloitte over its role in the historic mismanagement of the firm after Deloitte finished its audit for the 2021 financial year of the group, in order to preserve the independence of the audit.
After Deloitte audited Tongaat for 82 years, EY was delegated as its new auditors.