Tongaat’s former executive team held back the development potential of Durban and the larger KwaZulu-Natal (KZN) province.
The alleged fraudulent acts at Tongaat Hulett by its former executives, have ruined a company that seemed to have years of history and integrity. Tongaat was founded 147 years ago and developed into one of South Africa’s largest farming companies. The company amassed huge land parcels over time and formed a development arm.
It’s disappointing that just a few years ago, former managing director of Tongaat Hulett Developments, Michael Deighton was talking to media at the South African Property Owners’ Associaiton (Sapoa)’s annual conference held in Durban, about his company’s pipeline. He was gloating with excitement. Now he and certain other former executives are sitting in courts, facing charges including acting with common purpose to commit fraud. It’s a fall from grace for the former Sapoa president.
The other accused are former Tongaat CEO Peter Staude, ex-CFO Murray Munro, ex-Tongaat Hulett Developments planning director Rory Wilkinson, and former executives: Samantha Shukla and Kamlasagrie Singh. Gavin Kruger, a former lead partner at Deloitte, has been charged with contravening the Auditing Professions Act.
It’s disgusting that South Africans had to put up with this. It’s high time business criminals in SA faced the music.
According to the charge sheet, the accused acted with the common purpose to commit fraud, relating to a scam worth about R3.5bn which involved 69 property deals, between 2015 and 2018.
The accused are alleged to have overstated the value of the deals in Tongaat’s financial records, and misrepresented that correct ethical accounting procedures were followed in calculating the revenue earned on some of the deals. The executives are alleged to have manipulated financial reporting periods.
Apart from the criminal charges, Tongaat has also instituted civil claims of about R450m against some of the accused.
In June 2022, Tongaat’s board appointed Piers Marsden, a highly experienced business rescue practitioner as chief restructuring officer, so he could help to turn the company around.
Then in July 2022, the JSE suspended Tongaat’s listing after the company failed to publish its results for the year to end March 2022 by June 30 but was unable to do so, and it was then granted an extension until July 31.
Tongaat is in an unholy mess and new management has it all to do. Just imagine how many property development deals could have been clinched in KZN if this company had acted ethically and worked fairly with other organisations and communities.