Maria Amakali
Trustco Group Holdings will be correcting and adjusting its financial records after the Johannesburg Stock Exchange (JSE) suspended the trading of its shares with immediate effect yesterday.
“After a protracted legal battle with the Johannesburg Stock Exchange and the Financial Services Tribunal over a period of more than two years, Trustco now has actionable evidence that its financials will need to be restated…,” said the company in a statement. Trustco’s suspension is a result of yesterday’s dismissal of an appeal before South Africa’s High Court.
Judge Sulet Potterill dismissed Trustco’s review application with costs. The company’s shares had fallen by 16% to 41c in early-morning trade before the notice was issued, valuing it at N$791 million.
Trustco appealed JSE’s November 2020 decision to suspend it for not complying with listings requirements. In 2021, South Africa’s Financial Services Tribunal was in agreement with JSE that Trustco has been using some questionable accounting methods to make its financial results look more attractive.
Trustco was initially instructed by the JSE to correct financial statements and remove what the South African bourse termed “errors”, which they said increased Trustco’s profit indicators by N$2.1 billion. The company said, as it remains listed on the JSE, it will now comply with the November 2020 orders of restating their financial records in the hope of having the suspension lifted.
Furthermore, it is engaging with auditors and external advisors to comply with the directive. “It is an unfortunate but necessary step that a court order is required to override the bona fide actions and representations of our independent board and auditors. With this court order, we will comply to restate our financials as directed by the JSE,” said Trustco’s Group MD, Quinton van Rooyen.
In a separate matter, Trustco is in a legal battle as its subsidiary Trustco Bank Namibia (TBN) fights not to be liquidated. The request for an order of liquidation was filed last week by the Bank of Namibia, which claims that the bank is insolvent and has failed with the order to re-capitalise the institution and improve its precarious financial position.
In court documents, central bank governor Johannes !Gawaxab said TBN has failed to comply with seven of 25 of its directives of December 2020, including to re-capitalise the institution, and improve its precarious financial position and poor liquidity risk management.
The main directive that TBN failed to comply with is the N$100 million cash injection to re-capitalise the bank. It is BoN’s stance that TBN is factually and commercially insolvent and thus unable to pay its debts.TBN had not yet noted their intention to oppose the application.
- mamakali@nepc.com.na