The KwaZulu-Natal High Court is set to hear a provisional liquidation application by Tongaat Hulett, the 130-year-old sugar company that has struggled to recover from years of financial turmoil.
The application follows the company’s unsuccessful attempts to stabilise operations, despite entering voluntary business rescue in 2022 and adopting an official rescue plan by 2024.
Tongaat Hulett was first shaken by an accounting fraud scandal in 2019, when a PwC audit revealed that executives had manipulated the company’s accounts over several years to inflate profits. The inflated figures were reportedly used to justify executive bonuses and share options.
The fallout forced the company to restate its financial results, resulting in a R12-billion write-down and exposing a debt burden of R6.6-billion. More recent controversy involves over R1-billion in professional fees, linked to findings yet to be publicly disclosed.
The company’s financial difficulties now place thousands of jobs and livelihoods at risk, including those of small-scale farmers in the region. The South African Farmers Development Association, which represents around 25,000 small-scale farmers, says roughly 60 percent of its members operate within Tongaat Hulett’s supply area and could be directly affected.
SA Canegrowers is also seeking solutions to support its members, while CEO Thomas Funke has expressed concern that measures to protect innocent workers from job losses have been insufficient.
Negotiations are continuing behind closed doors as stakeholders attempt to avert a corporate governance crisis some have compared to the Steinhoff International saga, with the outcome of the court hearing likely to determine the company’s immediate future.