Delta Property Fund’s listing on the JSE has been suspended with immediate effect, the JSE announced in a Sens statement on Tuesday morning.
The move comes in the wake of Delta becoming the latest JSE-listed firm to be rocked by an accounting scandal, which has seen the property counter withdraw its annual financial statements (AFS) for its 2020 financial year to the end of February.
Delta withdrawing its 2020 financial results follows an independent forensic investigation by Mazars implicating senior former executives in “unsubstantiated payments, procurement irregularities and other unethical business dealings” totalling some R46 million.
In a general Sens statement titled ‘Delta Property Fund Limited – Suspension of listing’, the bourse noted that the “announcement has been placed by the JSE in the interest of shareholders”.
Delta confirmed the suspension in its own Sens statement just before 1pm on Tuesday.
“The company [Delta] has withdrawn its AFS for the period ended 29 February 2020, as announced on 9 December 2020. Since the issuer has withdrawn its AFS reliance can no longer be placed on the published AFS,” the JSE said in its statement on Tuesday.
“The JSE, in accordance with the provisions of paragraph 1.6 and 1.7 of the JSE Listings Requirements and Section 12(2) of the Financial Markets Act No. 19 of 2012, has therefore suspended the listing of this company’s securities with immediate effect.”
Following Delta’s new management revealing highlights of a forensic report last week, the group’s former executives – including founding CEO Sandile Nomvete, former CFO Shaneel Maharaj and former COO Otis Tshabalala – issued a statement last Friday “categorically denying” allegations of fraud or procurement irregularities during their tenure at the group.
Meanwhile, Delta’s board has backed the move by the JSE to suspend its listing, noting in its own Sens statement that this is a temporary measure.
“The board agrees with and supports the suspension, the ultimate aim being to protect investors and enable accurate price [in]formation. The board believes that the suspension is in the best interests of shareholders and the company,” it said.
“The board views the suspension as a temporary measure until the company is in a position to publish audited restated 2020 financial statements and the interim results for the six-months ended 31 August 2020…
“Based on preliminary feedback from the auditor [BDO South Africa], the board is currently targeting the publication of the 2020 financial statements and the interim results by no later than 28 February 2021, whereupon the board will apply for the suspension to be lifted,” it added.