A Tongaat Hulett sugar cane field. Picture: BLOOMBER/WALDO SWIEGERS
A Tongaat Hulett sugar cane field. Picture: BLOOMBER/WALDO SWIEGERS

Tongaat Hulett said SA police are investigating an unnamed former executive for his role in an accounting scandal that has forced the sugar maker to restate financials and ask for its shares to be suspended.

A criminal case has been opened against the individual, Tongaat said, without identifying the person.

“Given that this is now a matter being investigated by the SA Police Service [SAPS], we are not able to provide any further information,” the Durban-based company said in an e-mailed response to questions.

Further measures initiated by the group to hasten a recovery from the crisis include a review of assets, “some of which may be sold and others restructured or retained”, it said.

“We are also reviewing, and possibly reducing, our headcount as part of the broader restructuring of the business to ensure the company has the right skills and experience to implement our new operating approach.”

Tongaat has started a forensic investigation into its financials, and found that the company booked profit on certain transactions before they were finalised, according to two people with knowledge of the matter, who asked not to be identified as the probe has not been completed.

Tongaat’s shares were suspended earlier in June after a series of disclosures on financial mismanagement wiped more than 75% off the market value.

The 2018 statements would need to be altered by as much as R4.5bn in noncash adjustments, the Durban-based company said in late May, while annual earnings for the most recent fiscal year would not be published until the end of October.

The crisis at the sugar maker follows an accounting scandal at retailer Steinhoff International, which lost 97% of its value after reporting financial wrongdoing in late 2017.

The Independent Regulatory Board for Auditors (IRBA) is considering measures to strengthen testing for corporate fraud as a result, board head Bernard Agulhas said in June.

Tongaat is also considering whether to claim back bonuses given to executives who oversaw the mismanagement, said the people.

The company was formed through the merger of two sugar companies that are each almost 130 years old. A number of senior executives have resigned or retired from the company over the past few months.

Bloomberg