The market does not seem too concerned about the record-breaking R30m fine recently levied on Harmony Gold by the regulators. In the 10 days or so since it was announced the share price has, for the most part, moved steadily upwards. It may be that shareholders believe the events that prompted an investigation by the Financial Sector Conduct Authority (FSCA) occurred so long ago they no longer have a bearing on the mining company’s operations. The fine related to “misleading financial statements” that Harmony released in April 2007. The financial statements under scrutiny were for the quarter ending March 2007. Management failed to pick up R250m of costs, which was equivalent to around 5% of the total costs at the time, and so significantly overstated the profits. Once the R250m was discovered and included, Harmony’s first profit in years became a loss. And its high-profile CEO, Bernard Swanepoel, resigned. There was little fuss about the “misleading statements” both in 2007 and in ...

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