Tongaat corporate governance director leaves beleaguered group
The troubled firm cites work commitments for Jenitha John's departure
Tongaat Hulett, the former JSE blue chip that is in the midst of a scandal that may see it restate previously released financial information, said the director responsible for overseeing its corporate governance has left the board.
Jenitha John, who has been a member of the sugar producer’s board since 2007, chaired the audit and compliance committee. The resignation comes while the company is in the middle of a strategic and financial review.
In its statement on Monday, Tongaat Hulett said the director had resigned due to work commitments and the fact that "current challenges" faced by the company increased demands on her time.
John, a chartered accountant, departs as question marks abound over the credibility of the agriculture and agriprocessing company’s past financial information, most related to property sales conducted in the latter years of former CEO Peter Staude’s leadership.
The KwaZulu-Natal-based group has had a spectacular downfall with a cascade of bad news after Staude, who had been CEO since 2002, departed in October, having overseen a decline in the company’s fortunes.
Last week Tongaat Hulett, which was winning awards from the Investment Analysts Society as recently as last June, told investors that it had reached an agreement with bankers to ensure its long-term sustainability.
Its share price slid about 28% on March 8, when it said an ongoing strategic and financial review had revealed practices that "if verified, might require remedial actions, including, in some instances, assessing the impact on previously reported financial information".
That assessment, coming less than a month after it had warned that it would post a full-year loss, triggered comparisons with Steinhoff International, whose share collapsed in December 2017 amid the country’s biggest corporate fraud scandal yet.
Tongaat Hulett did not provide further details on
Its share price was down 4.2% to R18.46 on Monday, pushing the decline in 2019 so far to almost 67%.
That has left the company with a market value of R2.5bn, from about R24bn less than five years ago.
Tongaat Hulett told investors earlier in May that its bankers had agreed to waive their rights arising from any breach of financial covenants evident in its 2019 results.
The company is due to release full-year results on Tuesday. In its February statement it said headline earnings for the year to March could decrease 250%.
Gavin Hudson took over from Staude in February and immediately initiated a wide-ranging strategic and financial review. In April the company, which had been audited by Deloitte for 80 years, confirmed that it was likely to have to restate previously released information and said it had asked PwC to assist with a "comprehensive review".