Tongaat’s disclosures raise serious questions about auditors
The details make it difficult to imagine how the company's external auditors will emerge unscathed
Tongaat's share price was down almost 10% in morning trade on Thursday following the reminder of the grim news that is likely to be facing shareholders in the not-too-distant future. Wednesday’s SENS announcement must have sent chills down the spines of many key players in the SA business community. The value destruction will be felt not just by the Tongaat shareholders. The company has provided some detail about the scope of the strategic and financial review that was launched in March. The detail, which makes it difficult to imagine how the company's external auditors will emerge unscathed, include the timing and recognition of land sales and the allocation of related costs, the fair value of biological assets and the assessment of various assets for impairment.If the results of the review, which is being done by PwC , require the restatement of prior financial information — as is expected — then the company's external auditors will have some explaining to do. No doubt shareholder...