Former Tongaat Hullets CFO,Murray Munro was censured and fined for R6 million by Johannesburg Stock Exchange(JSE) for his role on misrepresenting the financial statements of Tongaat that were not complying with IFRS between 2011 to 2018.
The South African bourse did its own investigation to find the culprits that were involved on furnishing an incorrect, false and misleading information to shareholders, the JSE and the investing public-and the bourse's investigation found Munro guilty as he was Chief Financial Officer of Tongaat at the time.
JSE puts all the blame to Munro because he was the only person who responsible for the financials of the company at the time and he was supposed to lead by example and stop any irregularities relates to the financial statements of the organisation.
JSE said as Tongaat's Chief Financial Officer during the periods in question, Mr Munro was the guardian and overseer of Tongaat's financial health and infrastructure and key to his role and direct function was analysing and preparing Tongaat's financial statements. Mr Munro was also the senior executive responsible for managing the financial actions of Tongaat and occupied the highest financial position in the Company. The material prior period errors took place under the supervision of Mr Munro and as the Chief Financial Officer at the time, Mr Munro was obliged to take the necessary actions to ensure that Tongaat's financial information was,in all aspects, correct and that it represents a fair and accurate exposition of the Company's financial information. Tongaat's previously published financial information failed to comply with IFRS and was incorrect, false, and misleading in material respects. Mr Munro's actions directly resulted and/or contributed to Tongaat breaching the Listing Requirements. As Tongaat's CFO at the time, he was responsible for this, and in terms of the Listings Requirements cannot delegate this responsibility.
So Munro's failures to comply with the Listings Requirements has forced the JSE to imposed penalties, the bourse has announced a public censure and a fine of R6 million-and also disqualified him to hold the office of a director or officer of a listed company for a period of ten years for failing to fulfil his duties and responsibilities.
According to statement Mr Munro informed the JSE that he does not agree with the JSE's decision and findings and that he intended exercising his rights to challenge the JSE's decision in terms of the provisions of the Financial Sector Regulation Act("FSRA").
The statement said on 24 February 2023,Mr Munro applied to the Financial Services Tribunal in terms of section 231 of the FSRA for an order suspending the decisions of the JSE Ltd. On the same day, Mr Munro also applied for the reconsideration of the decisions of the JSE in terms of section 230(1) of the FSRA. The JSE opposed Mr Munro's suspension and reconsideration application.
The statement added that on 18 April 2023,the Deputy Chairperson of the Financial Services Tribunal, Retired Judge Harms, dismissed the suspension application, other than agreeing to suspend the payment of the fine that the JSE has imposed on Mr Munro. In the circumstances, the JSE is entitled to publish this censure, and to disqualify Mr Munro from holding the office of a director or officer of a listed company for a period of 10 years.
The bourse has promised to await the outcome of the reconsideration application in so far as the enforcement of the fine is concerned.
Three years ago, the JSE imposed a public censure and financial penalties amounting to R7.5 million against Tongaat for intentionally publishing financial statements that were not complying with IFRS for the period 2011 to 2018.