White collar crimes, not B-BBEE, sank Tongaat Hulett
· Citizen
There is a double tragedy about the possible impending collapse of SA’s sugar-producing giant, Tongaat Hulett.
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First, more than 2 000 employees could lose their jobs as could up to 25 000 people in associated industries.
But the second tragedy is that people are trying to score cheap political points.
Because government-connected entities like the Public Investment Corporation have taken stakes in the group over the years, there have been those making the accusation that the dire situation at Tongaat Hulett is down to failed broad-based black economic empowerment, failed affirmative action or failed cadre deployment by the ANC.
None of these assessments could be further from the truth.
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The reality is that senior, white, long-serving executives – former CEO Peter Staude and former chief financial officer Murray Munro – have been implicated by forensic investigations and face charges for illegal behaviour which badly damaged the company.
An investigation by PricewaterhouseCoopers detailed how senior executives manipulated financial statements over years, overstating profits and asset values.
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.
Tongaat was forced to restate its financial results, wiping approximately R12 billion off its value and exposing a debt burden exceeding R6.6 billion.
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And that was where the slow implosion began. It has reached a point that business rescue practitioners brought in to save it have reached the end of the road and plan to launch an action to liquidate it.
Does this remind you of the shenanigans at Steinhoff, where billions also went up in a puff of smoke?
Crime knows no colour. Crime knows no ideology.