Global Courant 2023-04-19 16:34:00
Main image: IOL
The Johannesburg Stock Exchange (JSE) has fined and convicted Murray Munro, the former CFO of Tongaat Hulett, for his role in misrepresenting the company’s financial records between 2011 and 2018. Munro has also been barred from serving as director of a publicly traded company for the next ten years, according to the JSE. Munro has challenged the JSE’s decision and findings and has applied to the Financial Services Tribunal under the provisions of the Financial Sector Regulation Act (FSRA) to suspend the JSE’s decisions. The JSE opposed Munro’s requests for a stay and reconsideration, and retired Judge Louis Harms, the deputy chairman of the Financial Services Tribunal, rejected the request for a stay, with the exception of payment of the fine imposed by the JSE.
As a result, the JSE has the authority to publish this disapproval and ban Munro from serving as a director or officer of any publicly traded company for ten years. For enforcement of the fine, however, the JSE awaits the outcome of the request for reconsideration. Munro, who took early retirement after the accounting scandal came to light five years ago, is one of several former executives, including former CEO Peter Staude, charged with fraud related to accounting irregularities at Tongaat.
The JSE highlighted its July 2020 public disapproval and financial sanctions totaling R7.5 million against Tongaat in its Sens announcement, which related to the group’s “previously published financial information for the period 2011 to 2018” which “does not complied with IFRS and was incorrect, false and misleading in material respects.” The JSE has completed its investigation into Munro, then Tongaat’s CFO.
The JSE determined that Munro’s actions and failure to comply with key provisions of the listing requirements were one of the causes of the publication and distribution of Tongaat’s consolidated financial statements that were materially misstated from 2011 to 2018. Munro served as Tongaat’s CFO during the relevant periods, and he was the guardian and overseer of Tongaat’s financial health and infrastructure, with a key role and direct function in the analysis and preparation of Tongaat’s financial statements. Munro was also the senior executive responsible for managing Tongaat’s financial actions and held the top financial position in the company. Munro was in charge of the material prior to the errors. Munro’s actions directly led to and/or contributed to Tongaat’s violation of the listed requirements.
Meanwhile, the JSE continues its investigation into the behavior of other individuals in charge of Tongaat Hulett “during the relevant periods and who are bound by the listing requirements”. The accuracy and reliability of financial information published by companies is critical to ensuring a fair, efficient and transparent marketplace, and the investing public relies on published financial information by companies to make important investment decisions. Munro’s censure and fine demonstrate the importance of companies complying with listing requirements, as well as the need for directors and officers to perform their fiduciary duties with diligence and integrity.
