Tongaat Hulett’s collapse began in the boardroom

As the fate of Tongaat Hulett, SA’s sugar producing giant founded over a century ago in KwaZulu-Natal, hangs in the balance, the ripple effects are unimaginable. This month, the group’s business rescue practitioners (BRPs) approached the KwaZulu-Natal High Court in Pietermaritzburg seeking an order to place the embattled company into provisional liquidation. In court papers, the BRPs state they have “exhausted all reasonable prospects” of implementing the approved rescue plan, marking a dramatic turn for a company once regarded as an agri-industrial powerhouse.

But the collapse did not begin in the courtroom. It began in the boardroom. Public records, including findings from a forensic investigation commissioned by the company and conducted by PricewaterhouseCoopers (PwC), detail how senior executives manipulated financial statements over years, overstating profits and asset values.

Among those implicated were former CEO Peter Staude and former chief financial officer Murray Munro. PwC’s 2019 report found revenue had been prematurely recognised, land sale profits improperly booked and costs deferred in ways that artificially inflated earnings. The inflated figures were allegedly used to justify executive bonuses and bolster market confidence.

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When the misstatements were uncovered, Tongaat was forced to restate its financial results, wiping approximately R12 billion off its value and exposing a debt burden exceeding R6.6 billion. The fallout was swift, with shareholders launching civil claims. Criminal complaints were laid with the SA Police Service’s elite unit Directorate for Priority Crime Investigation, known as the Hawks.

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