Why Huge must restate its financial results
The court outcome is part of a long-standing dispute between Huge Group and the JSE
Huge Group has been forced to restate its financial results after failing in a court application against the JSE.
In 2014, the JSE instructed Huge to restate its annual financial statements from 2010 to 2012. Huge went to the High Court in Johannesburg to have this decision set aside, but its application was dismissed.
The court case was part of a long-standing dispute between the two entities over the 2008 single-stock futures (SSF) contracts into which certain Huge executive directors entered with the company. The transactions were found to have breached the JSE’s listing rules and the exchange imposed hefty fines on the directors.
Huge said the restated results were expected to be included in the financial statements for the year to February 2018.
The company said the restatement was related to the accounting treatment in Huge’s reporting for 2010 and, by implication, the results for the corresponding 2009, 2011 and 2012 financial statements of 80,455 SSF contracts that Huge acquired in October 2008.
Huge CEO James Herbst said the restatement would have no effect on assets, liabilities or equity. All matters relating to the dispute with the JSE would be settled once the group published the restated financial results.
The JSE’s GM of issuer regulation Andre Visser said Huge had now complied with the JSE’s decision "so the matter is now closed".
He said the exchange had in recent years not seen many listed companies trading in SSFs in their own listed shares.
Huge’s principal service is substituting fixed-line voice infrastructure, such as that provided by a public, switched telephone network, such as Telkom, with a wireless global system for mobile communications.