{"id":6003,"date":"2021-11-24T16:04:31","date_gmt":"2021-11-24T16:04:31","guid":{"rendered":"https:\/\/www.africa-press.net\/namibia\/all-news\/trustcos-jse-challenge-dismissed-company-accused-of-cooking-books"},"modified":"2021-11-24T16:04:31","modified_gmt":"2021-11-24T16:04:31","slug":"trustcos-jse-challenge-dismissed-company-accused-of-cooking-books","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/namibia\/all-news\/trustcos-jse-challenge-dismissed-company-accused-of-cooking-books","title":{"rendered":"Trustco\u2019s JSE challenge dismissed \u2026company accused of cooking books"},"content":{"rendered":"

Africa-Press – Namibia. <\/strong><\/span>South Africa\u2019s Financial Services Tribunal has effectively agreed with the Johannesburg Stock Exchange that Trustco has been using some questionable accounting methods to make its financial results more attractive.<\/p>\n

However, Trustco, a player in the financial services and resources sectors, disagrees with this judgement.<\/p>\n

Initially, Trutsco was instructed by the JSE to correct financial statements and remove what the South African bourse termed \u201cerrors\u201d they said increased Trustco\u2019s profit indicators by N$2.1 billion.<\/p>\n

In response, Trustco released a Stock Exchange News Service (SENS) announcement on 13 November 2020, indicating that it would exercise its right to appeal to the Financial Services Tribunal to reconsider the JSE\u2019s decisions regarding its compliance to the Financial Sector Regulation Act. The hearing before the Tribunal was held on 2 November 2021 and the official decision was made on 22 November 2021, noting that Trustco\u2019s application for reconsideration was dismissed.<\/p>\n

The Tribunal, an independent entity in South Africa, also decided that \u201cTrustco\u2019s repeated failure to take the Financial Reporting Investigation Panel (FRIP), the JSE and the Tribunal into its confidence\u201d by explaining Trustco\u2019s waivers on the loan amounts to exceptional circumstances<\/p>\n

and warrants an order that Trustco pays 50% of the JSE\u2019s costs to the Tribunal.<\/p>\n

\u201cWe refer to the JSE\u2019s SENS announcement of 11 November 2020, which informed stakeholders of the process followed and the decisions made by the JSE in respect of the company as it relates to their annual financial statements for the year ended 31 March 2019 and interim results for the six months ended 30 September 2019, and the JSE\u2019s views and decision that Trustco\u2019s financial information does not comply with the JSE\u2019s listings requirements,\u201d reads the JSE statement.<\/p>\n

The JSE noted that Trustco had not complied with International Financial Reporting Standards (IFRS) in respect of three matters, which were confirmed by the Tribunal.<\/p>\n

The first matter deals with the classification of a \u2018gain\u2019 recognised in Trustco\u2019s profit and loss, following two separate loan waivers by the majority shareholder of the company, Quinton van Rooyen. The Tribunal noted that Trustco incorrectly accounted for N$546 million in the March 2019 annual financial statements, a N$1 billion gain in the interim results for the six months ended September 2019, as well as the subsequent interim results for the 12 months ended March 2019. The Tribunal also took issue with the appropriateness under IFRS of reclassifying Trustco\u2019s unsold erven in property development from an inventory classification to investment property.<\/p>\n

According to the Tribunal, this reclassification triggered a N$693 million gain, which was presented as revenue of N$984 million and cost of sales of N$291 million in the company\u2019s 2019 annual financial statements.<\/p>\n

The crux of the matter is that the Tribunal now requires Trustco to take corrective action by restating its annual financial statements for the year ended 31 March 2019 to account for errors in the period under review. This requires reversing the N$546 million gain previously recognised in profit and loss, and recognising this \u2018credit amount\u2019 to reduce the common control reserve initially recognised in equity as a result of an acquisition. The decision also required Trustco to reverse the reclassification of the Elisenheim properties (incorrectly reclassified to investment properties) and consequently reversing the N$693 million gain from profit and loss.<\/p>\n

As a result, Trustco will also have to restate its interim results for the six months ended 31 September 2019 to account for errors. This would further include reversing the N$1 billion gain previously recognised in profit and loss, and accounting for this as a transaction with an equity participant, such as recognising the credit directly in equity.<\/p>\n

Trustco\u2019s Response<\/b><\/p>\n

In a statement yesterday, Trustco Group Holdings Ltd said it is disappointed to note that its application for reconsideration has been dismissed.<\/p>\n

\u201cTrustco does not agree with the judgement. Trustco refers to its SENS announcement published on 13 November 2020 and reiterates that the directors, having consulted with its external JSE-accredited IFRS experts, and having concluded multiple unmodified audits by two JSE-accredited auditor firms, maintain their view that the transactions referenced in the proactive monitoring were correctly accounted for and disclosed\u201d, read the statement from Trustco spokesperson, Neville Basson.<\/p>\n

He further observed that Trustco\u2019s board remains responsible and accountable to shareholders for the preparation and presentation of financial statements and their compliance with IFRS.<\/p>\n

\u201cThe board cannot abdicate this responsibility to third parties who are not the group\u2019s appointed professional advisors. As such, consultations with its JSE-accredited auditors, external JSE-accredited IFRS advisors as well as minority shareholders are ongoing to consider its options, going forward,\u201d the statement reads.<\/p>\n

Trustco also pointed out that it now has 180 days to bring a review application to the high court in South Africa.<\/p>\n

For More News And Analysis About Namibia<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Namibia. South Africa\u2019s Financial Services Tribunal has effectively agreed with the Johannesburg Stock Exchange that Trustco has been using some questionable accounting methods to make its financial results more attractive. However, Trustco, a player in the financial services and resources sectors, disagrees with this judgement. Initially, Trutsco was instructed by the JSE to […]<\/p>\n","protected":false},"author":84,"featured_media":6002,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,8,9,16],"tags":[234,236,2861,233],"class_list":["post-6003","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-homepage-english","category-miscellaneous","category-twitter","tag-africa-press","tag-africa-press-namibia","tag-cooking","tag-namibia"],"yoast_head":"\nTrustco\u2019s JSE challenge dismissed \u2026company accused of cooking books - Namibia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/namibia\/all-news\/trustcos-jse-challenge-dismissed-company-accused-of-cooking-books\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Trustco\u2019s JSE challenge dismissed \u2026company accused of cooking books\" \/>\n<meta property=\"og:description\" content=\"Africa-Press – Namibia. South Africa\u2019s Financial Services Tribunal has effectively agreed with the Johannesburg Stock Exchange that Trustco has been using some questionable accounting methods to make its financial results more attractive. However, Trustco, a player in the financial services and resources sectors, disagrees with this judgement. 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