Home South African Oceana’s shares tumble on CEO’s shock resignation ahead of release of forensic...

Oceana’s shares tumble on CEO’s shock resignation ahead of release of forensic investigation

175

Fallout from a forensic investigation into Oceana appears to be snowballing, as the fishing products group yesterday announced the surprise resignation of its chief executive (CEO) Imraan Soomra.

Fallout from a forensic investigation into Oceana appears to be snowballing, as the fishing products group on Tuesday announced the surprise resignation of its chief executive (CEO) Imraan Soomra. Photo: Oceana website

FALLOUT from a forensic investigation into Oceana appears to be snowballing, as the fishing products group on Tuesday announced the surprise resignation of its chief executive (CEO) Imraan Soomra.

Only days before this, Oceana Group suspended its chief financial officer, Hajra Karrim, “on a precautionary” basis, saying it had started a process to appoint an acting CFO.

This was days ahead of the anticipated completion of an internal audit investigation by law firm ENSAfrica into how the group accounts for its US fishing interests. The news sent the group’s shares tumbling 4.59 percent lower to close at R55.51 with investors spooked by the “fishy” fallout. Its shares have fallen 22.43 percent in three years.

Last week Oceana said it had to once more delay the release of its results for the year to September 30, 2021 as its auditors apparently needed to clarify the accounting of an insurance claim that was paid out. On January 31, 2022, the group had indicated the results would be released on Tuesday.

However, on February 3 a “new concern” was discovered by auditors on the dating of signatures on an internal document relating to a R40 million insurance claim paid out in October 2021.

Oceana did announce key findings of the ENSAfrica report at the end of January, relating to the US investment, but discovered during the investigation there were “other matters, that were not within the original scope of the investigation,” that “may potentially lead to further remedial action and possible reportable irregularities relating to conduct and behavioural breaches of key personnel”.

Oceana had warned the market last October there was a problem around its ownership of US fish-meal and fish oil processing company Daybrook Fisheries, which Oceana bought for R4.6 billion in 2015. The deal had included a 25 percent interest in US fishing company Wesbank, as well as a R164.2 million put option that gave Oceana the right of first refusal for the balance of the stake, should the owners, Wesbank Fishing Partners, wish to sell their 75 percent shareholding.

In 2016 the put option was exercised, but Oceana could not legally own the 75 percent stake as the American Fisheries Act requires fishing vessels in the US to be at least 75 percent owned and controlled by US citizens. Oceana CEO Francois Kuttel, a US citizen, acquired the stake after resigning from Oceana.

Some 35.6 percent of Oceana’s outside shareholders – apart from shareholders such as directors of the group who owned shares – voted against the transaction because they deemed it a related party transaction. The 35.6 percent is a high percentage of dissenting votes in the South African corporate world.

On Tuesday, Oceana said “Mr Soomra voluntarily submitted his resignation on the terms provided for in his contract of employment and his resignation was accepted by the company.

BUSINESS REPORT ONLINE

Previous articleKanye West apologises for ‘harassing’ Kim Kardashian
Next articleRangnick praises Ronaldo after his ‘best performance’ gets United back in top four