EMBATTLED sugar company, Tongaat Hulett’s listing on the Johannesburg Stock Exchange (JSE) has been “temporarily” suspended.
Given that it could not be sure of the underlying value of its assets, the company said on Monday that it was seeking to avoid speculative trading until it restated its past financial results.
Amid a widening accounting scandal, Tongaat requested and received permission to suspend its shares — something that would avoid speculative trading in the stock and allow management to focus upon a forensic investigation into affairs at the company.
No time frame was given for the company’s relisting, but Tongaat said on Monday it expected this to take place no sooner than October 2019, when its audited results for the year to end-March 2019 are expected to be released.
In May, Tongaat confirmed that past practices “appear to have resulted in financial statements that did not reflect Tongaat Hulett’s underlying business performance accurately”. This required the restatement of its results to end-March 2018.
The company is currently in the throes of a strategic and financial review. Tongaat said on Monday the board viewed the JSE suspension as a temporary measure. Its secondary listing on the London Stock Exchange has also been suspended.
“Among the board’s primary objectives of the suspension is to “protect investors in circumstances where there is insufficient reliable financial information in the market on which informed decisions can be made, and accordingly a risk of speculative trading”, the company said.
Tongaat’s share price has been pummelled by the accounting scandal, losing 20.9 percent so far in June and having fallen 76.32 percent so far in 2019. On Monday, when the company’s share price was suspended, it was trading at R13.21, 92.4 percent down from its record high reached in September 2014.