EOH management's turnaround efforts pay off as JSE suspends part of R7.5 million fine
Group CFO Megan Pydigadu says the EOH management team remains committed to transparency.
The EOH management team’s efforts to rebuild the company’s reputation following the uncovering of accounting issues in their 2017 and 2018 financial reports has paid off as the Johannesburg Stock Exchange (JSE) has agreed to suspend R2.5 million of the company’s R7.5 million fine.
“The current management team and board of directors have spent a significant amount of time rebuilding EOH credibility through the establishment of a robust governance framework, driving transparency in the business and ensuring the accuracy and reliability of financial information disclosed to the market whilst continuing to resolve the remaining inherited legacy issues,” says EOH group CFO Megan Pydigadu. “The EOH management team remains committed to transparency and the timeous dissemination of relevant and accurate information to all stakeholders.”
The R2.5 million will be suspended for a period of five years on the condition that EOH is not found to be in breach of material and important provisions of the JSE Listings Requirements.
This follows EOH’s new management team uncovering historical accounting issues and discrepancies in its financial years ended 31 July 2017 and 31 July 2018 results, which included various transactions that spanned various accounting topics, including revenue recognition, asset capitalisation and subsequent recovery, the timing of the recognition of liabilities and the recognition of impairment losses.
“Although EOH is disappointed to have received a public censure and fine from the JSE, we accept the JSE’s findings that the 2017 and 2018 financial results did not comply with IFRS, were incorrectly prepared and, as a result, incorrect, false and misleading information was disseminated to shareholders,” the company said in a statement.
The company’s primary focus for the 2019 reporting period was on ensuring that the closing balance sheet provided a credible basis that investors and shareholders could make decisions on.
The company remains committed to pursuing legal action against the main perpetrators identified during the ENSafrica forensic investigation and to try to recover losses they have caused.