Hippo Valley FD alleges Tongaat smear campaign

06 Dec, 2019 - 00:12 0 Views
Hippo Valley FD alleges Tongaat smear campaign Hippo-Valley-Estates

eBusiness Weekly

Golden Sibanda

Hippo Valley Estates finance director John Chibwe,who is in the eye of a storm over alleged financial misconduct, claims major shareholder Tongaat Hullet Limited (THL), is trying to smear his name to influence outcome of a disciplinary hearing, after the firm published results of an audit into the alleged misconduct.

Chibwe, who has already gone through a disciplinary hearing over the allegations and presented his evidence before a five-member panel of lawyers and THL executives, has pleaded his innocence to the charges levelled against him although he would not be drawn, in an earlier interview, into divulging the details.

And through his lawyers Gill, Gerrants and Godlonton, Chibwe took exception in the decision by THL to reveal findings of an audit into its operations; which implicated him, before due process has been completed.

He also expressed disquiet over certain contents of the publication, which he said have already convicted him long before a determination has been made following the hearing on his alleged transgressions.

Chibwe said the publication of certain findings of the audit into the suspected irregular dealings by him and other senior executives of Tongaat and its subsidiaries smacked of a smear campaign aimed at influencing the results of the disciplinary hearing into the charges levelled against him by the sugar company.

The wrangle has all the potential makings of a similar spectacular fall out between another JSE listed firm’s executive, Peter Moyo and his company Old Mutual, whose bruising corporate governance and financial misconduct wrangle spilled into the courts of law after the financial group decided to fire its chief executive.

Chibwe’s unhappiness with THL’s conduct started last week after the South African company, which controls Hippo Valley, “prematurely” published key findings of a forensic audit into the affairs of the group as well as other operations in South Africa, Zimbabwe and Mozambique, amid fears suspected irregularities may have overstated the true financial position of the Johannesburg Stock Exchange (JSE) listed sugar company.

Hippo 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. THL also has a 50 percent stake in Zimbabwe Sugar Sales, which acts as a broker to the sugar millers who produce in the lowveld of Chiredzi and Triangle.

Following the appointment of Gavin Hudson as chief executive of THL in February 2019, the board gave him the mandate to immediately conduct a comprehensive strategic and financial review with the objective of stabilising the business.

Among other challenges, THL said mandated the sugar company’s new chief executive to address high debt levels and crafting of a strategy to the troubled firm on the path to sustainable profitability and growth.

After the audit, THL said it will pursue possible civil and criminal action against current and former directors who have been implicated in acts of alleged financial misconduct in South Africa, Zimbabwe and Mozambique.

The probe implicated several senior executives at THL and across its subsidiaries including Michael Deighton (former MD Tongaat Hullet Development), Steve Frampton (former Zimbabwe Sugar Sales general manager), Shelton Nhari (Triangle Finance Director), Sydney Mtsambiwa (former managing director of THL’s Zimbabwean operations) and Les Munro (former finance executive of Tongaat Hulett SA Sugar).

Murray Munro (former Chief Financial Officer of THL), Raphael Pfunye (Zimbabwe Sugar Sales finance executive), Sean Slabbert (former finance executive of THL) and Peter Staude (former chief executive of THL) were also caught up in the dragnet. Chibwe’s lawyers said THL preempted certain due processes following the hearing.

“You surely appreciate that there are pending disciplinary proceedings before Honourable A.K Maguchu. We need your strong assurances that the conviction of our client by Tongaat Hullet in the said publication is not calculated to influence the outcome of the matter.

“Further, we question the wisdom or lack thereof, of such publication when the parties involved are awaiting determination of the matter. We question the sincerity of your client (Tongaat Hullet) in bringing up proceedings in the first place when in its own correspondence, our client was guilty already,” Chibwe’s lawyers argued.

The Hippo Valley finance director said it was Tongaat that elected to institute a disciplinary hearing against him and should therefore wait for the outcome of its findings, warning any attempts to divert from such direction would result in him walking away from the proceedings and see him seeking justice elsewhere.

He also had issues with THL over the fact that Tongaat, apart from laying charges only against him out of several senior current and former executives of the group, completely left out in its summery of findings, another senior executive, Aiden Mhere, despite the fact he was also implicated in the forensic audit report by PwC.

“Why does the audit report of PwC implicate him among other executives and then the publication of your client, Tongaat Hulett, omits his name on those executives, which it says are guilty of wrongdoings?”

Chibwe said while the questioning of Mhere’s omission did not imply that the named directors were guilty of any wrong doing, but that his absence from the summery of key findings was striking as a pikestaff given the publication by THL was based on the PwC report.

“Are the allegations facing our client emanating from the same audit report whose findings your client published but then exonerated others? Is your client degenerating into a colonial era divide and rule antic,” the lawyers queried?

Share This:

Sponsored Links