Labat Africa, a JSE-listed company, missed its deadline for submitting financial results for the six months to the end of February. Last week, the Johannesburg Stock Exchange announced that the company is under threat of suspension. CEO Brian van Rooyen joined the BizNews Power Hour, telling Jackie Cameron what’s happening behind the scenes. – Jarryd Neves
Brian van Rooyen on Labat missing a deadline for financial results:
Unfortunately, when we deconsolidated the results of our fuel business that we sold off, we had a qualified report because the auditors could not complete the audit in time. Even though it’s deconsolidated – and it has no impact on Labat – the qualification remained. As a result, we had to do an audit review in our reviewed results for the end of February 2021.
Unfortunately, we had to appoint new auditors for the business we sold off. That audit has now been completed and we didn’t want to publish our reviewed results again, with the qualification. The review is almost completed. The auditors have been meeting with the group auditors, to review their files, so they can remove the qualification from Labat. We are quite comfortable that we will have no problem in publishing our results. They are ready for publication. We have put out a SENS announcement to say that we have made adequate provision, that whatever the outcome of the reviewed results on the deconsolidation of the fuel company, not one single cent will impact the published results.
On what caused the delay:
Mazars was appointed by the business rescue practitioner, because at the time of the audit, the business was in business rescue. We’ve obviously taken the figures as presented by the business rescue practitioner to the various creditors as the final figures – which were the lowest figures that we could ever take.
I won’t say there was any incompetence. We could have left it, but the problem is for as long as we leave it, it remains a qualification on our audits – until our auditors are satisfied. An audit was done at the time of the publication of the business rescue plan. We had to get an independent group to do an audit, so that was the only reason why it was not completed. We ran out of time.
On his response to the situation:
We have informed investors and the public. We have put out a notice and a SENS announcement that we have made adequate provision. There was a request from the JSE for an explanation – we’ve given them one and they were satisfied with it. It is not a nice issue to have, because you always have that threat of a possible suspension, but I must say in our 24 years of listing we have made sure that these things are dealt with.
On the BioData medical trial:
It’s still a process. Pharmaceuticals don’t turn these things around within six or 12 months. It normally takes a couple of years for drug master files and all those things to be completed. The fundamental thing for us is that we’re the first company to receive permission from the ethics committee to proceed with it. That in itself opened the gate not only from a pharmaceutical point of view, but a medicinal one too. They are slightly different.
We wanted to go the pharmaceutical route, because that’s looking at basically replacing opioids with cannabis – which has been done. We have to stay within the regulated framework of using cannabis for whatever ailments, as prescribed.
We’ve done a lot of work [on the trial]. It will start off with a medical questionnaire from the participants – we’re talking about between 5,000-10,000 people that will be on the trial. You will then give your medical condition online, it will be assessed by the group of doctors that are involved and they will prescribe you cannabis.
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