Bank and wealth management company Sasfin Holdings has missed the cutoff date for releasing financial statements and stands to be suspended from the JSE if it does not release them by end-October, says the bourse.
Companies are supposed to release results within three months of their year end. In Sasfin’s case that was at the end of June.
Sasfin warned the market in September that its annual financial statements would be late but would be released on or before October13. The financial services company has now missed its own target.
Accounting
The JSE issued a warning on Monday saying if Sasfin did not release the results by the required date, trade in its shares would be suspended.
The delay is because Sasfin’s external audit by PwC has not been completed. Delays are not usually due to tardiness of auditors but rather because of queries or disagreements from the auditors, which may query a firm’s interpretation and application of accounting standards.
Sasfin said in a statement: "We refer you to the Sens announcements that Sasfin issued on September 29 and October 13 2023, whereby we advised the market that the release of our annual financial statements for the year ending June 30 2023 have been delayed, as the external audit has not yet been concluded. We are on track to release our results by the end of the month."
Companies that miss deadlines are usually smaller concerns mired in governance and financial difficulties, and which have extremely low share prices. Such companies include jewellery firm Luxe, which has been mired in controversy.
Gryphon analyst Casparus Treurnicht said missing financial reporting dates is a "major" concern. "Even sketchy companies try not to miss these dates."
Asked if it was a red flag Treurnicht said, "it certainly is an orange flag at least".
In the past when companies missed reporting deadlines, negative news or events usually unfolded as details about their troubles became clear, he said.
In March Sasfin was named in an Al Jazeera investigation into gold smuggling and money-laundering titled "Gold smugglers use SA banks, bribes to launder money".
Payroll
The article and investigation said officers at Standard Bank, Absa and Sasfin Bank had been on the payroll of Mohamed Khan, a money-launderer working for cigarette magnate and smuggler Simon Rudland.
In May, Sasfin Bank told Al Jazeera it was taking "vigorous action" against suspended and former employees and clients of its foreign exchange unit, and said that it no longer "had a relationship with any of the businesses named in [the] article".
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