JSE instructs Trustco to correct financial statements
The Johannesburg Stock Exchange (JSE) has ordered listed Trustco Group to correct its financial statements after some errors were found in the company’s financials.
As per its mandate, the JSE started a review process for Trustco in December 2019 and found that there are errors that pushed up Trustco’s profits by a combined N$2.1 billion. During the review, three inaccurate issues were identified and referred by the JSE to its financial reporting investigations panel.
The issues were the classification of gains derived from loans that were written off on two occasions with a gain value of N$1,5 billion; the reclassification of unsold erven held by Trustco in a property development from inventory to investment property, showing a N$693 million gain. The third issue pertains to the company recognising revenue in the sale of undeveloped land.
“The JSE notes the Company’s arguments in the 2020 interim audited results that it has sought advice on the basis of accounting applied by the Company from an International Financial Reporting Standards advisor and that its auditors have not modified their audit opinion,” a SENS announcement on the JSE stated.
The JSE said the accuracy and reliability of financial information published by companies are of critical importance in ensuring a fair, efficient and transparent market.
Trustco has been given the right to appeal the JSE decision.