Trustco ordered to restate financials
Suspension unfortunate, Van Rooyen says
The financial results of a company need to reflect its true financial health, South African Supreme Court of Appeal judge Sulet Potterill said.
Johannesburg Stock Exchange-listed Trustco Group Holdings has been ordered to restate its financial results while the trading of its shares has been suspended.
South African Supreme Court of Appeal judge Sulet Potterill ordered that the company restate its financial statements, saying the financial results of a company need to reflect its true financial health.
The suspension of the shares had been brought on following a ruling in favour of the Johannesburg Stock Exchange (JSE) and the Financial Services Tribunal (FST) yesterday.
Must tell full story
“The financial statements of a listed company communicate with the public and it must tell a full story. The JSE and the FST found that the ‘accounting’ was not telling the whole story and did not comply with International Financial Reporting Standards. Trustco must adhere to these decisions and restate accordingly,” Potterill said in her ruling.
In her judgment, she dismissed – with costs - a review application brought by Trustco.
The issue between the JSE and Trustco revolves around the waiver of two loans by the Namibian-based group’s majority shareholder, Quinton van Rooyen – one for N$545.6 million and the other N$1 billion – as well as some of Trustco’s Elisenheim properties.
Unfortunate
Van Rooyen described the suspension as unfortunate, saying Trustco acted genuinely in its business dealings.
“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.”
Meanwhile, the Bank of Namibia (BoN) is seeking the liquidation of Trustco Group subsidiary, Trustco Bank, in an application brought before the Windhoek High Court.
Among the concerns listed by the apex bank is the bank’s inability to operate as a going concern over fears that it failed to generate loans to third parties, Trustco Group’s failure to recapitalise the bank to the tune of N$100 million and the bank’s inability to honour its existing loan obligations.
“Trustco Group was directed to recapitalise Trustco Bank in an amount of N$100 million, in the form of cash in three equal tranches over a three-year period. This was to ensure ample liquidity to meet funding obligations as they fell due and capital adequacy required to continue as a going concern,” BoN governor Johannes !Gawaxab said.
While an initial transfer had been made, this money was redirected back to the Trustco Group, defeating the objectives of the recapitalisation, he added.
South African Supreme Court of Appeal judge Sulet Potterill ordered that the company restate its financial statements, saying the financial results of a company need to reflect its true financial health.
The suspension of the shares had been brought on following a ruling in favour of the Johannesburg Stock Exchange (JSE) and the Financial Services Tribunal (FST) yesterday.
Must tell full story
“The financial statements of a listed company communicate with the public and it must tell a full story. The JSE and the FST found that the ‘accounting’ was not telling the whole story and did not comply with International Financial Reporting Standards. Trustco must adhere to these decisions and restate accordingly,” Potterill said in her ruling.
In her judgment, she dismissed – with costs - a review application brought by Trustco.
The issue between the JSE and Trustco revolves around the waiver of two loans by the Namibian-based group’s majority shareholder, Quinton van Rooyen – one for N$545.6 million and the other N$1 billion – as well as some of Trustco’s Elisenheim properties.
Unfortunate
Van Rooyen described the suspension as unfortunate, saying Trustco acted genuinely in its business dealings.
“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.”
Meanwhile, the Bank of Namibia (BoN) is seeking the liquidation of Trustco Group subsidiary, Trustco Bank, in an application brought before the Windhoek High Court.
Among the concerns listed by the apex bank is the bank’s inability to operate as a going concern over fears that it failed to generate loans to third parties, Trustco Group’s failure to recapitalise the bank to the tune of N$100 million and the bank’s inability to honour its existing loan obligations.
“Trustco Group was directed to recapitalise Trustco Bank in an amount of N$100 million, in the form of cash in three equal tranches over a three-year period. This was to ensure ample liquidity to meet funding obligations as they fell due and capital adequacy required to continue as a going concern,” BoN governor Johannes !Gawaxab said.
While an initial transfer had been made, this money was redirected back to the Trustco Group, defeating the objectives of the recapitalisation, he added.
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