HARARE- The local unit of JSE listed Tongaat Hulett, Hippo Valley Estates whose shares are traded on the ZSE, on Tuesday announced through a cautionary statement that it is critically reassessing its financials for the full year to March 2019, a development which will result in the results’ delayed release.
These developments in Zimbabwe comes as further pressure mounts at the parent’s stable in SA where another senior executive was reported to have stepped down Tuesday.
“As a result, the Board is performing its own internal review of the Company’s financial statements to critically assess the Company’s accounting policies (compared to requirements of International Financial Reporting Standards) in the context of dynamics in the local environment” reads part of the issued cautionary by Hippo released through the ZSE.
Hippo was alluding to the fact that review of its own financials were necessitated by Tongaat’s own financial review which had revealed certain past practices that would result in the restatement of Tongaat consolidated financial statements for the 2018 financial year.
Tongaat which has since been suspended from trading on the JSE, concluded from the review that reliance on the 2018 Financial Statements is no longer appropriate and that the ¬financial information therein should not be relied upon.
The statement further stressed that to conclude the ¬financial review and the associated forensic investigation, Tongaat has delayed the publishing of its ¬financial statements until October 2019 and has secured a voluntary suspension of the listing of its shares on the Johannesburg and London Stock Exchanges, while these reviews are completed.
Hippo however denied being involved in deliberate fraudulent errors, misstatements or financial malpractices on previously released financial information, that might have been aimed at misleading the investing public.
Despite the forgone Hippo’s adoption of Tongaat’s accounting policies makes it susceptible to any changes to the Group accounting policies that may result from the THL review of its financials.
Due to this unforeseen assessment, Hippo will delay the release of its own financials.
As a major subsidiary it would however been prudent and in the best interest of shareholders had Hippo taken Tongaat’s route of seeking voluntary suspension as establishment of misinformation may grossly prejudice shareholders.
Infact it is highly likely that any wrongdoing unearthed would affect Hippo Valley’s own financials given that up until March 2018, Zimbabwe was the major profitability driver accounting for 67% for operating income.
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