Accentuate going after R70m lost to fraud
ACCENTUATE, the AltX-listed flooring and chemicals manufacturer and distributor and water-treatment solutions provider, is continuing its efforts to recover about R70 million it was defrauded by a former financial director.
Louis Schreuder, a former financial director of Accentuate’s whollyowned subsidiary, FloorworX, was jailed for 18 years in November after being found guilty of almost 780 charges of fraud.
FloorWorX is a leading supplier of resilient and carpet flooring solutions and has a manufacturing facility and warehouse in East London.
Accentuate chief executive Fred Platt said yesterday a confiscation order had been granted, resulting in an auction of Schreuder’s personal effects in East London in December to liquidate most of those assets. The auction raised about R1m.
Platt said Accentuate had been granted a court order for a further R9.6m that was subject to ratification by the High Court.
He said the group recognised only R6.2m of this in the total of R8.68m of other income generated by Accentuate in the six months to December.
“It was prudent to do so, due to the fact that the order still had to be ratified by the High Court,” he said.
Platt said they believed Accentuate had been defrauded out of a total of R75m by Schreuder, and was trying to recover as much of this amount as possible.
“We will take whatever steps are necessary to recover what we can without losing our focus on growing the business. We won’t give up,” he said.
Platt said recovering the full amount was difficult, but he believed a sizeable portion of the money taken by Schreuder “was somewhere, and we continue to look for it”.
But Platt said Accentuate now needed to get beyond this issue and begin implementing its strategy.
He said Accentuate had issued a cautionary announcement and confirmed the group was busy with certain activities that they believed would meaningfully change the group going forward.
He said flooring continued to be an attractive asset despite the downturn in local production and government business. It was important that Accentuate diversified its areas of exposure so that it was less dependent on government business. The group’s chemical and water businesses had incredible opportunities.
“We need to bulk up our chemical business and strengthen our water strategy. Within the next months we will be able to provide a bit more detail,” he said.
But Platt said the planned international expansion of the group’s flooring business by exporting its locally manufactured specification vinyl tile to the United States had not happened because of the strength of the rand and the changing political environment in the US, which made this expansion more difficult to execute.
However, Platt said they were looking at other markets for expansion.
Platt said the six months to December had been one of the group’s most difficult periods, because of the impact of the municipal elections on FloorworX, the group’s largest operating segment. No meaningful project decisions had been made by government departments and institutions in the run-up to and immediately after the elections.
Accentuate yesterday reported a 54-percent decline in headline earnings a share in the six months to December to 2.66 cents from 5.75c in the previous corresponding period.
Operating profit dropped 44 percent to R6.07m from R10.8m, while revenue slumped by almost 8 percent to R159.3m from R173m. A dividend was not declared. Platt was more optimistic about the current six-month period and believed that the extended delay in the implementation of government infrastructure projects was over.
However, financial pressures within the fiscus were still resulting in a number of planned projects not going ahead.
Accentuate closed unchanged at 85c on the JSE yesterday.