Murray Munro, the former CFO of accounting-scandal-hit sugar and property group Tongaat Hulett, has been censured by the JSE and faces a R6 million fine for his role in misrepresenting company’s financials between 2011 and 2018.
The JSE has also prohibited Munro from being a director of a listed company for a period of 10 years, according to a Sens announcement released after the market closed on Tuesday.
Read: Auditing giant Deloitte’s R260m Tongaat Hulett settlement ‘pathetic’ – Logan
The bourse however noted that Munro has informed the JSE that he does not agree with its decision and findings and has challenged the JSE’s decision in terms of the provisions in the Financial Sector Regulation Act (FSRA).
Murray Munro, Tongaat Hulett’s former CFO. Image: www.tongaat.com
“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 Sens said.
“The JSE opposed Mr Munro’s suspension and reconsideration application.
“On 18 April 2023, the deputy chair of the Financial Services Tribunal, retired Judge [Louis] Harms, dismissed the suspension application, other than agreeing to suspend the payment of the fine that the JSE has imposed on Mr Munro,” it pointed out.
Disqualification
“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 JSE will await the outcome of the reconsideration application in so far as the enforcement of the fine is concerned. The JSE will continue to oppose the reconsideration application,” it added.
Munro, who went into early retirement after the accounting scandal came to light five years ago, is one of several former executives – including erstwhile CEO Peter Staude – who are facing fraud charges linked to accounting irregularities at Tongaat.
In the Sens issued on Tuesday, the JSE highlighted its July 2020 public censure and financial penalties amounting to R7.5 million against Tongaat. This was related to the group’s “previously published financial information for the periods 2011 to 2018” that “did not comply with IFRS and was incorrect, false and misleading in material aspects”.
Read:
Tongaat Hulett confirms civil claims totalling R450m against implicated former executives [Jan 2022]
JSE fines sugar firm Tongaat [July 2020]
Damning Tongaat Hulett forensic report fingers ex-executives, including Peter Staude [Nov 2019]
“Pursuant to the JSE’s investigation into the conduct of certain individuals that presided at the Company during the periods in question, the JSE has concluded its investigation against Mr Munro in his capacity as the CFO of Tongaat at the time,” it noted.
“The accuracy and reliability of financial information published by companies are of critical importance in ensuring a fair, efficient and transparent market. In addition… the investing public relies on a company’s published financial information to make important investment decisions.”
Material misstatements
“The JSE found that Mr Munro’s actions and failure to comply with important provisions of the Listings Requirements were one of the causes of the publication and dissemination of material misstatements to Tongaat’s consolidated financial statements for the periods 2011 to 2018,” the bourse added.
“As Tongaat’s CFO 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 JSE noted.
“The material prior period errors took place under the supervision of Mr Munro … Mr Munro’s actions directly resulted and/or contributed to Tongaat breaching the Listings Requirements,” it said.
Meanwhile, the JSE said on Tuesday that its investigation into the conduct of other individuals that presided at Tongaat Hulett “during the periods in question and who are bound by the Listings Requirements is ongoing”.
Read:
Departing Tongaat Hulett CEO was handed a ‘poisoned chalice’
Tongaat Hulett appoints Dan Marokane as acting CEO
FSCA fines Tongaat Hulett R20m
