Tongaat Hulett was one of South Africa's oldest companies — founded in 1892, listed on the JSE for over a century, and a cornerstone of KwaZulu-Natal's sugar industry. Its collapse through accounting fraud destroyed a company that thousands of families depended on.
The company had significant sugar cane farming and milling operations in KwaZulu-Natal, Mozambique, and Zimbabwe, along with a major property development arm on the KZN North Coast including the Zimbali estate and uMhlanga developments. At its peak, market capitalisation exceeded R20 billion and the share price was around R120.
The fraud centred on two mechanisms. First, the company overstated the value and recognition of revenue from its property development business, booking revenue on land deals that had not been completed or where conditions had not been met. Second, there were irregularities in the valuation of biological assets (standing sugar cane) and the accounting treatment of certain transactions. The scheme was orchestrated by a group of senior executives led by CEO Peter Staude.
When new CEO Gavin Hudson took over in 2018, he commissioned PricewaterhouseCoopers to investigate accounting irregularities. PwC's forensic report, completed mid-2019, revealed that the company's assets had been overstated by approximately R12.1 billion. The company was forced to restate financial statements for multiple years. The share price collapsed to single digits, destroying over R10 billion in shareholder value.
Criminal cases were opened with the Hawks. Former CEO Peter Staude was arrested in 2022 alongside other former executives, facing charges of fraud, theft, and racketeering. The FSCA also investigated insider trading.
Tongaat Hulett was placed in business rescue in October 2022, and a rescue plan was approved in 2023 involving the sale of operations to various buyers. The company was delisted from the JSE after more than a century as a listed entity. The collapse threatened the livelihoods of approximately 30,000 sugar cane growers who supplied the company's mills and approximately 5,000 direct employees. The sugar industry in KZN was destabilised.
A 130-year-old company destroyed by accounting fraud — and with it, the livelihoods of tens of thousands of people who had nothing to do with the boardroom deception.