Source: Tongaat probe riles Hippo Valley director | The Herald December 4, 2019
Golden Sibanda Senior Business Reporter
HIPPO Valley Estates finance director Mr John Chibwe, who is being accused of financial misconduct, has expressed disquiet over major shareholder, Tongaat Hulett, accusing the firm of publishing without verification, the findings of an audit into alleged wrongful conduct.
Last Friday, Tongaat published findings of the forensic audit by Price Waterhouse Coopers (PwC) into its operations and those of its subsidiaries.
Tongaat said the suspected financial impropriety at Hippo Valley had potential impact on the financial statements of the group and its units for 2018 and 2019.
Hippo Valley is a Zimbabwean firm involved in growing and milling of sugar cane in Chiredzi and Triangle and Tongaat is its biggest shareholder with a 50,3 percent stake.
Following the appointment of Mr Gavin Hudson as chief executive of Tongaat Hulett (THL) in February 2019, the board mandated him to immediately conduct a comprehensive strategic and financial review to stabilise the business.
Mr Chibwe, who has already gone through a disciplinary hearing conducted by a five-member panel of lawyers and THL executives, yesterday maintained his innocence.
He would not be drawn into divulging finer details of the hearing, but said he did not understand why a company of THL’s stature would “disrespect processes it has initiated”.
The Hippo Valley executive, whose company is listed on the Zimbabwe Stock Exchange (ZSE), but currently not trading its shares after it was suspended for delaying publication of its financials, said all details on the issue would “come in the wash” once all due processes were completed.
Mr Chibwe feels the audit and hearing were part of a witch-hunt, given he is the only one thus far charged out of several implicated senior executives from the parent company, including the South African sugar company’s former group CEO.
Mr Chibwe said he had presented his facts during the hearing, while Hippo Valley and THL officials who presided over the process tabled theirs.
He would not share details of the discussion.
“What I am aware of is that I am the only one going through a hearing,” he said.
“The other colleagues, for all I know, have not been charged up to now and my concern really is that Tongaat went on to disrespect a process they initiated.
“I have indicated to the company officials my position as regards the financials, where I have indicated that I object to the allegations as I am of the view that there are certain manipulations which may not be reflective of the substantive issues.”
Mr Chibwe expressed reservations that the audit and hearing where both at the instigation of THL as a shareholder and not the board of Hippo Valley.
PwC’s investigation identified that certain senior executives initiated or participated in undesirable accounting procedures that resulted in revenue being recognised in earlier reporting periods.
According to findings of the PwC probe, which cut across the group operations, expenses were inappropriately capitalised to assets.
This resulted in profits in the respective years being overstated, and the overstatement of certain assets in THL‘s financial statements.