Tongaat unit suspended from Zimbabwe stock exchange

Tongaat unit suspended from Zimbabwe stock exchange
HARARE -  The Zimbabwe Stock Exchange says it has suspended trade in the shares of Tongaat Hulett's Zimbabwe listed unit, Hippo Valley after turning down a further extension to the date for release of its March 2019 financials.

Hippo Valley initially missed the June 30 deadline for release of its March 30 2019 full year financials and also missed the extended deadline of July 31 2019. On August 1, Hippo Valley said it had missed the extended deadline again and stated that it would release the financials on or about August 14 but has also since missed this deadline.

It is against this backdrop that the ZSE says it has now recommended to the Zimbabwe Securities Exchange Commission for the suspension of trade in Hippo Valley Estates shares. Tongaat also controls non listed Triangle Sugar Corporation.

“The Zimbabwe Stock Exchange (“ZSE”) advises members of the investing public that it has put a halt in the trading of Hippo Valley Estates Limited’s (“Hippo”) shares on the ZSE according to Clause 4.13.2 of the ZSE Trading Rules and Procedures,” ZSE chief executive officer, Justice Bgoni.

The suspension was in line with an application for voluntary suspension filed by Hippo Valley. .

“This development has been necessitated by a formal request made by Hippo for the suspension of trading in its securities after it failed to publish its audited financial statements for the year ended 31 March 2019 as per the previous public notices,” he said.

Subsequent to this, the ZSE has now “formally requested the Securities and Exchange Commission of Zimbabwe (SECZIM) to consider the application for the suspension” in line with Securities and Exchange Act. “The investing public will be advised of the determination by SECZim as soon as it becomes available.”

In the year to end March 31 2018, Hippo Valley stated that operating profit amounted to $17 million, significantly up from the $13.4 million recorded for the prior year.

But in June, Bigboy Shava, who is company secretary for Hippo Valley, said: “The review of the company’s financials has resulted in a delay in the release of the company’s financial results for the year ended 31 March 2019… which will now be published on or before July 31 2019 following the granting of an extension by the ZSE.”

The delays to Hippo Valley’s financials have been occasioned by accounting glitches rocking its parent company, Tongaat Hulett. 

The accounting and auditing scams stem from revelations that the SA agro-processing needed to restate its previous financials to correct misrepresentation of the company’s value after liabilities to investors.

A review of the previous financials had found that “certain past practices” did not reflect well on the firm’s financial position while total equity for the company had been overstated by as much as between R3.5 billion and R4.5 billion. 

Tongaat has also since been suspended from the JSE.