“KPMG’s forensic auditing department has reached a sensitive stage in their investigation and the conclusions will be reported on in due course,” said Sentula in a statement.
An audit committee comprising deputy chairperson Dines Gihwala, the head of the audit committee Jonathan Best, and accounting firm KPMG, was investigating the circumstances that led to the restatement of the company’s 2007 financial results.
On June 2, Sentula said that it would have to restate its results for the financial year, after it identified accounting errors pertaining to an acquisition.
These included the "erroneous conclusion as to the accounting effective date of the acquisition, resulting in the incorrect measurement of the fair value of the consideration paid", as well as the "incorrect valuation of certain fixed assets on the date of acquisition".
Sentula said on Monday that that it believed that there would be no further material adverse financial impact on the company resulting from these irregularities, other than those disclosed in the restated 2007 financial results announced on June 25.
The company’s share price, which plunged after the restatement of the results, moved up some 50c a share after informing shareholders on the progress of the investigations, to R9,75 a share at 15:00.
Earlier this month, Sentula also informed shareholders that Barnard Jacobs Mellet Corporate Finance has resigned as sponsor to Sentula on the JSE, and that it had appointed Merchant Sponsors as its new sponsor.
Sentula had pursued a particularly rigorous acquisition strategy in 2007, and the company now consisted of Scharrighuisen Opencast Mining, Benicon Opencast Mining and Supplies, CCT Opencast Mining, Overburden Drilling & Blasting, JEF Drill and Blast, Equipment & Spares, Geosearch International, and Ritchie Crane Hire.
The company was in coal joint ventures with Nkomati Anthracite, Merafe Coal, Koornfontein Mine, Mabapa Mining, and Jonah Coal & Aquila Resources.