Legal process is unfolding as former Tongaat Hulett execs face R1.5bn fraud charges

Things got a bit sweeter for sugar producer Tongaat Hulett yesterday after six former top executives, including former head honcho Peter Staude, along with a Deloitte audit partner appeared in the Durban Specialised Commercial Crimes Court yesterday on charges of R1.5 billion fraud.

The corruption was uncovered in 2019 after a PwC investigation. Reinstatements had to be made to financial statements in the years prior to 2019 of about R11bn, which the auditor, Deloitte, had failed to pick up year after year.

Gavin Kruger, 56, was the Deloitte audit partner on the Tongaat Hulett audit team, and the other co-accused were former Tongaat Hulett chief executive Staude, former chief financial officer Murray Munro, 55, former managing director of Tongaat Hulett developments Michael Deighton, 57, ex-Tongaat Hulett developments planning director Rory Wilkinson, 50, Kamasagrie Singh, 56, and Samantha Shukia, 50.

They were later granted R30 000 bail each. The seven co-accused are due to appear in court again on April 11.

According to a National Prosecuting Authority (NPA) statement, the accused were charged with backdating sale agreements between March, 2015 and September, 2018. Kruger was charged with contravention of the Auditing Profession’s act.

“It is alleged that the accused Tongaat Hulett directors between March, 2015 and September, 2018 acted in common purpose to misrepresent to Tongaat Hulett that the revenue derived from land sales was a correct value, correctly reflected in the final (agreements) when in fact, they had been backdated,” the NPA said.

The authority said this resulted in incorrect profits being declared, and the managers receiving huge bonuses.

Tongaat Hulett head of communications Virginia Horsley said: “Tongaat Hulett welcomes this development in the legal process, and it will continue to cooperate with law enforcement authorities whenever required to ensure that these cases are heard and justice is served.”

Horsley said while the company had also continued with the process on the R450 million civil claims, as per the company's announcement earlier this year, the criminal case had to be decided on by the NPA in terms of whether they would proceed with criminal action against those individuals.

“Today’s announcement was about the appearance in court and bail proceedings related to the NPA’s criminal case,” she said.

Horsley said civil proceedings brought by the company against four former executives were also under way, and Tongaat Hulett would update on developments in this regard when appropriate.

In January, the company announced that it had filed a R450 million civil claim against some of its former executives, and was also seeking an order declaring them delinquent directors.

In July last year, the JSE fined Tongaat R7.5m. The group had lost more than 90 percent of its market value, following its disclosures of accounting irregularities in 2019. Tongaat’s share price, which was trading at around R130 at the time was trading at around R4.21 yesterday.

Tongaat Hulett shareholders earlier this month voted to proceed with a contentious R4bn rights issue, which it said would help secure the future of the group and its stakeholders, and protect the livelihood of millions of people in Southern Africa.

Magister, a regional commodity trader and investor in agriculture, has underwritten the rights issue by R2bn.

Tongaat has reduced its debt from R11.35bn to R6.5bn since 2020 through asset sales, cutting costs and improving operations and restructuring.

dieketseng.maleke@inl.co.za

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