SHAREHOLDERS in unlisted ventures tardy in producing audited annual financial statements – those all-important documents that help determine the worth of an investment – are really up in the sky without a propeller. Finweek (and its website, Fin24.com) has regularly reported on unlisted venture capital companies unable (or perhaps unwilling) to publish audited financial statements timeously.
Currently audited financial statements for unlisted ventures such as Supertow International, APMI Holdings, SunAir Holdings and Wealth 4 U are currently overdue for publication. Without access to audited financial statements prospective shareholders have no inkling of the financial status of a company, nor can they calculate or estimate the value of shares in such ventures.
It’s an unacceptable turn of events, flouting any acceptable norms in accountability and transparency. It also shows scant respect for the rights of shareholders who, in most instances, have provided the bulk of the working capital.
Shareholder activist Theo Botha argues that if financial statements can’t be produced timeously, it’s often a clue that something could be unfolding at a company. Botha says a more proactive approach should be applied to errant companies, especially where shareholders are prejudiced by a lack of compulsory financial information. “Otherwise we end up having at best a commission of enquiry into a company. But that’s after the event and really is too late to help shareholders.”
But exactly where shareholders can turn for help isn’t that apparent. Gerry Anderson, deputy executive officer at the Financial Services Board (FSB), says the matter of late reporting by unlisted public companies is rather the domain of the Registrar of Companies. “I don’t see how the FSB could be involved… I suggest you phone the Department of Trade & Industry.”