Delta gets R7.5m fine
PROPERTY FUND TAKES HIT FOR MISSTATING ITS FINANCIALS JSE is still probing former executives who have ‘presided at the company’.
Delta Property Fund has been fined R7.5 million and censured by the Johannesburg Stock Exchange (JSE) for misstating its financials between 2018 and 2020. But it suspended R5 million of the fine linked to certain conditions being met.
The JSE and Delta issued Sens statements on the fine and censure on Friday. This came as another financial hit to the embattled South African Real Estate Investment Trust (Reit).
“Delta’s previously published financial information for the 2018 to 2020 financial periods did not comply with IFRS [International Financial Reporting Standards] and were incorrect, false and misleading in material aspects,” the JSE said.
“This incorrect information was disseminated to shareholders, the JSE and the investing public. In these circumstances, the JSE found that Delta failed to comply with… provisions of the JSE’s Listings Requirements.”
The JSE said Delta had not complied with these provisions:
Paragraph 8.62(b) in respect of the previously published annual financial statements (AFS) for the financial years ended 28 February 2018, 28 February 2019
and the 2020 AFS, which were not prepared in accordance with IFRS and were restated due to the numerous errors contained in them regarding measurement and presentation; and
Paragraph 8.57(a) in respect of the previously published 2020 interims which did not comply with IFRS requirements and were restated due to its numerous errors.
“The JSE has considered all the relevant facts and information at its disposal in deciding on an appropriate censure and financial penalty as a result of Delta’s transgressions of the listings requirements, which include Delta’s forensic investigations that uncovered irregular accounting and other practices, its full cooperation and assistance in the
JSE’s investigation, the current economic climate, the remedial actions undertaken by the current executive management and the interests of shareholders, the JSE and the investing public,” said the bourse.
“In these circumstances, the JSE has decided to suspend R5 000 000 [five million rand] of the fine for a period of five years.”
This was “on condition that Delta is not found to be in breach of the provisions of the listings requirements about the accuracy of its financial information, financial reporting and related disclosures during the period of suspension,” it added.
The JSE suspended Delta’s listing in December 2020, effectively halting trade in its shares.
The suspension was lifted in
July 2021 after the group’s new management restated the Reit’s results and gave an update on forensic investigations into former executives.
The December 2020 listing suspension came in the wake of the group being rocked by an accounting scandal implicating former executives.
This saw the Reit withdrawing its financial statements for its 2020 financial year.
Delta’s withdrawal of its 2020 financials followed an independent forensic investigation by Mazars implicating senior former executives in “unsubstantiated payments, procurement irregularities and other unethical business dealings”.
This came to a total of about R46 million.