Tongaat Hulett former CFO Murray Munro
Sugar company Tongaat Hulett former CFO Murray Munro has been banned from being a director or officer of any listed company for ten years, with immediate effect.
The JSE found that he failed to fulfil his duties and responsibilities as CFO of the company with the necessary due care and skill between 2011 and 2018.
The JSE also imposed a R6-million fine on Munro, but this has been suspended pending the outcome of a reconsideration request put forward by the former CFO in February.
Ahead of the JSE announcing the outcome of its investigation into Munro on April 19, he approached the Financial Services Tribunal in February for an order suspending the decisions of the JSE and to reconsider the JSE’s decisions.
The JSE opposed Munro’s applications to the tribunal.
The tribunal’s deputy chairperson, retired judge Louis Harms, however, on April 18 dismissed the suspension application, other than agreeing to suspend the payment of the fine pending the outcome of the reconsideration application.
The JSE will await the outcome of Munro’s reconsideration application insofar as the enforcement of the fine is concerned.
The JSE imposed the punitive fine for Munro’s involvement in the issuance of incorrect, false and misleading financial information between 2011 and 2018.
The JSE in 2020 imposed a public censure and financial penalties of R7.5-million against Tongaat as its previously published financial information from 2011 to 2018 did not comply with International Financial Reporting Standards (IFRS).
This incorrect information was disseminated to shareholders, the JSE and the investing public.
“The accuracy and reliability of financial information published by companies are of critical importance in ensuring a fair, efficient and transparent market. In addition hereto, the investing public relies on a company’s published financial information to make important investment decisions,” the JSE said.
The JSE found that Munro’s actions and failure to comply with important provisions of the listings requirements were one of the causes of the publication and dissemination of material misstatements to Tongaat’s consolidated financial statements during the eight-year period.
As the company’s CFO during this time, Munro “was the guardian and overseer of Tongaat’s financial health and infrastructure”.
A key part his role and direct function was to analyse and prepare the company’s financial statements, the JSE said.
Since Munro was the senior executive responsible for managing the financial actions of Tongaat and occupied the highest financial position in the company, the material errors in question took place under his supervision.
He was obliged to ensure the company’s financial information was, in all aspects, correct and that it represented a fair and accurate exposition of the company’s financial information, the JSE noted.
In addition to the actions taken against Munro and Tongaat, the JSE is continuing with investigations into the conduct of other key individuals that presided at Tongaat between 2011 and 2018.
In June 2019, the company was forced to ask the JSE to suspend trading in its shares after certain accounting practices came to light.
Former CEO Peter Staude and Munro, along with other executives, are also facing criminal charges of racketeering in relation to an alleged R3.5-billion scheme to manipulate revenue from the sale of land by a Tongaat subsidiary.
The court case is being heard in the Durban High Court and the executives are due to appear again on June 30.