Tongaat to Claw Back Half a Billion Rand From Ex-Managers
Tongaat to Claw Back Half a Billion Rand From Ex-Managers
Tongaat Hulett Ltd., a South African sugar producer, is seeking to claw back 450 million rand ($28.9 million) from past directors and executives for allegedly inflating profits and the value of certain assets.
Civil trials against the former managers are expected to start in 2023, four years after a whistle-blower called a hotline to report financial misstatements.
“While the process has been significantly delayed through the filing of a number of interlocutory objections on highly technical arguments by the defendants, Tongaat Hulett is determined to pursue this matter,” company secretary Johann van Rooyen said in an emailed statement on Tuesday.
Since the whistle-blower made the call and Tongaat Hulett first warned investors about financial misinformation, the share price has slumped more than 80%. The sugar maker has also suffered a stock-market suspension, renegotiated debt facilities, sold assets, pursued legal action, cut jobs, been fined by Johannesburg’s stock exchange and proposed a 4-billion rand rights offer.
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Former officials including Chief Executive Officer Peter Staude, Chief Financial Officer Murray Munro and finance executive Sean Slabbert have faced civil proceedings since 2020 after a PwC forensic investigation found unjustified enrichment, damages due to the breach of their fiduciary duties and misrepresentation. In separate proceedings, Tongaat Hulett Developments started a case against ex-Managing Director Michael Deighton.
Staude, who headed the company for 16 years, was among a group of at least 10 senior executives identified in the PwC report in 2019. He declined to comment on Tuesday. Lawyers for Slabbert and Deighton didn’t immediately respond to emails and voice mails left on their phones.
Defending Claims
“Munro denies any wrongdoing in the matter, as alleged or otherwise, and has resolved to defend the claim through to its conclusion,” the former CFO’s lawyer said in an emailed statement late on Tuesday.
Deighton told Moneyweb that he had “defended the matter,” and the company’s claims “for various reasons, do not sustain a cause of action against me.”
Tongaat Hulett is withholding Staude and Deightons’ pensions, Van Rooyen said. The others “had unfortunately already left the business and withdrawn their pensions by the time the action was instituted.”
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