The share price of fishing group Oceana dropped 3.17% to R56.50 after the company announced on Monday that it has suspended CFO Hajra Karrim on a “precautionary basis pending a further process”.
The group did not go into details in its Sens statement about why Karrim, who was appointed CFO of the group in November 2020, was suspended, noting that it had started the process to appoint a suitable acting CFO.
The shares have fallen 7.99% over the past three months and slipped 6.42% over the past six months.
The fishing giant has been entangled in turbulence, having delayed the release of financial results for 2021 after instituting a probe into the accounting treatment of matters pertaining to Daybrook Fisheries, a US subsidiary of the group, after a whistle-blower raised concerns.
Valued at about R7.7bn on the JSE, the group, which ordinarily publishes its final results towards the end of November, first flagged possible delays to the results in October.
Oceana appointed ENSafrica to undertake a comprehensive independent investigation and a review process of all concerns raised by the whistle-blower.
In January, Oceana said the investigation had been concluded. No evidence of “fraud, misappropriation or loss of funds or management override of controls arising from any of the matters raised” had been found. The probe had, however, flagged conflicts of interest arising from relationships within the workplace, as well as matters that “relate to management style, culture and the governance over reporting and managing conflicts in certain areas within the organisation”.
“Other matters, that were not within the original scope of the investigation, came to the board’s attention during the course of the investigation and may potentially lead to further remedial action and possible reportable irregularities relating to conduct and behavioural breaches of key personnel,” Oceana said at the time.
The probe related to Oceana’s entrance into the US market in 2015 when it bought Daybrook Fisheries, a processing company, alongside 25% of West Bank Fishing, the exclusive supplier of fish to Daybrook. The transaction was structured to maintain fishing licences granted to West Bank as US rules require that at least 75% ownership of the vessels must lie with US citizens.
It was found in a review of the company’s accounting practices that though on paper Daybrook is a minority investor in West Bank, from an accounting rules point of view it jointly controls the vessels operator with the 75% shareholder through supermajority decision-making and arbitration clauses.
But the review, conducted by the company’s technical accounting advisers, Mazars, reads that it would be commercial suicide to put such veto powers into action as it would lead to West Bank losing its fishing licence.
The company is expected to finally release its final interims for 2021 in the next few days after the lengthy delays. With Michelle Gumede
Update: February 7 2022
This story has been updated with new information.
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