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Probe into Tongaat Hulett reveals dodgy accounting practices

A PwC report identified major historical shortfalls in governance practices, delegation of authority, decision-making, oversight, financial discipline, record keeping, systems usage and financial reporting.

A sugarcane field belonging to the Tongaat Hulett group. Picture: tongaat.com

JOHANNESBURG - An investigation into agriculture and agri-processing company Tongaat Hulett has revealed that its senior executives initiated undesirable accounting practices, which includes overstating profits for years.

The report released by the company was authored by PricewaterhouseCoopers (PwC) following a six-month investigation.

The company says disciplinary action is being taken against some of the senior executives involved in the dodgy deals – while its board is considering instituting civil suits to recover the funds.

Criminal action is also being pursued.

The PwC report - which reads like the makings of the Steinhoff scandal that shook the markets - is scathing against current and former executives at Tongaat Hulett.

It identified major historical shortfalls in governance practices, delegation of authority, decision-making, oversight, financial discipline, record keeping, systems usage and financial reporting.

Among the executives mentioned in the report by name is CFO Murray Munro and former CEO Peter Staude.

The company says the investigation’s findings point to personal financial enrichment of some senior employees in the form of financial incentives paid to them over the years – such as bonuses and other benefits.

The civil suits consideration is meant to recoup these funds.

The board says it will provide relevant information and necessary support to the police and the national prosecuting authority to help them pursue individuals who will be facing prosecution.