CEO Robin Berry told Mining Weekly Online that the company planned on publishing the findings of the internal investigation into the errors “within the next couple of weeks”.
Berry said that the investigation was at a “sensitive stage”, and was reluctant to comment further on it, but he did indicate that the errors were not genuine accounting mistakes.
“It’s like most things, if you start looking at circumstances that lead to accounting errors, they’re either genuine errors, or there’s some kind of intent behind those errors,” he stated in a telephone interview.
“I think that’s where we’ve got to – some intent is behind those errors, and that’s what we’re investigating further.”
Meanwhile, Financial Services Board (FSB) market abuse executive director Gerhard van Deventer said that the JSE had reported Sentula’s latest announcement to the watchdog. He said that the FSB would be looking into the possibility of these “irregular activities associated with the accounting errors” resulting in Sentula making false or misleading statements on the future or the past performance of the company, or the listed security itself.
Berry was tight-lipped over whether anyone had stood to gain personally from the errors. Soon after Sentula first sprung it on the market that it would have to restate its 2007 results, two senior management officials announced their resignations.
“It’s like anything, you can have somebody who makes a genuine mistake, or they make an error that looks like a mistake, but it’s actually for gain of some form,” he commented. “We’re looking at the intent behind those errors, as opposed to just that this was actually just a wrong interpretation of an accounting practice.”
“We’ve picked up irregular activities, now it’s about how you deal with them. We are now looking at our options of how to deal with them,” Berry said.
Neither would he confirm whether Sentula had engaged the authorities on the issue. “I’d really not like to comment on who exactly we’ve involved,” said Berry, when questioned on this.
If the internal audit had uncovered any illegal activity, Sentula would have to report this to the commercial crimes branch of the South African Police Services, which would investigate this and possibly pass the case on to the National Prosecuting Authority (NPA).
NPA spokesperson Tlali Tlali said that it was not the prosecutor’s policy to comment on investigations.
Asked whether the investigation, which was being carried out by KPMG, was fingering any specific persons, Berry said this was not the case.
“The magnitude of these areas [the accounting errors] is fairly large; it’s past management in general, at this point,” he stated.
Berry went on to say that the company wanted to “wrap the investigation up fairly smartly”, with the intention of putting the findings to the market in the next couple of weeks.
“It’s not something that you can allow to grind on for too long,” he commented. “It’s really a case of watch this space.”
Berry noted that the findings of the investigation so far indicated Sentula’s firm intentions to clean its house.
“When we committed to putting a subcommittee onto this and involving KPMG, we were serious about it,” he said.
Two fairly material accounting errors resulted in the restatement of Sentula’s results, which had to do with two acquisitions, where there were errors regarding impairment and opportunity loss.
Sentula, formerly called Scharrig Mining, already had to cough up a R750 000 penalty for an unintentional error in a trading update in 2005.
Last week, the company announced that former sponsors to its JSE listing, BJM, had resigned.