Africa-Press – Namibia. TRUSTCO Group Limited late last week said its scuffle with the Johannesburg Stock Exchange (JSE) is not because it committed any fraud, misconduct or wrongdoing, but because of an accounting standards interpretation and application issue.
The company also said it has not received a bad audit report for the last 29 years. BDO Namibia has been giving Trustco clean audit reports for over 20 years.
BDO resigned as auditors at the end of 2020.
According to Trustco, all its financial statements, as published, contained correct financial records that are reasonably presented in line with international financial reporting standards (IFRS).
In a press statement released last week, Trustco revealed that it has taken the JSE to the South African High Court to challenge certain instructions by the bourse administrator.
“It is important to note that Trustco and the JSE are deadlocked regarding a difference of opinion on the interpretation and application of IFRS,” said the company.
JSE reviewed Trustco’s financial statements for the financial year ending 31 March 2019 and interim results for the six months ending 30 September 2019, where it found that the profits rose erroneously by N$2,1 billion.
Trustco now says the items in dispute are only two.
“The two remaining matters in the dispute between Trustco and the JSE relate to classification of the gain recognised in profit and loss by Trustco following two separate loan waivers by the majority shareholder in the amounts of N$546 million N$1 billion, respectively, and the re-classification of a portion of a property development from inventory to investment property,” reads the company’s statement.
JSE believes Trustco has failed to comply with the JSE’s listings requirements and the relevant IFRS accounting standards, and has informed Trustco to restate its financial statements, but Trustco has maintained that its books are in order.
The company even alleges that the JSE has not indicated the breached accounting standards.
“It is notable that JSE (and the Financial Reporting Investigation Panel) did not, as per their mandate and in accordance with the listings requirements, refer the matter to the South African Institute of Chartered Accountants, Independent Regulatory Board for Auditors or any relevant professional body for a further independent opinion, should an issuer fail to comply with IFRS,” said Quinton van Rooyen, the company’s managing director.
Van Rooyen added that JSE’s decision was made by a person not authorised to take such a decision and imposed a sanction that the JSE was not empowered to make – a sanction that is absent and not provided for in the JSE listings requirements.
Earlier this year, the JSE conditionally suspended Trustco from the bourse, but Trsutco approached the courts to stop the suspension.
The two remain at each other’s throats, and have indicated that the market will be kept updated on the matter.
Trustco’s shares closed last week at N $0,51 and no one traded in these shares for the whole week.
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