Oceana Group external auditor abruptly resigns after fallout over delayed results
Cape Town, South Africa-based Oceana Group’s external auditor – PricewaterhouseCoopers (PwC) – has abruptly resigned from the position, the company has announced.
Oceana confirmed the resignation came a day before a scheduled consultation meeting of shareholders that was to discuss the company’s next action after a majority of its board of directors voted against reappointing of PwC as the group’s external auditor. Oceana acknowledged a strained relationship with PwC after extensive delays in the preparation and release of the group’s 2021 full year results.
“Shareholders are now advised that late afternoon, Friday, 27 May 2022, PwC resigned as auditors of the group with immediate effect in respect of the audit of the financial year ending September 2022, due to their assessment of significant doubt as to whether there was objective and transparent communication between the board and PwC given the strained relationship, which they assert constituted a significant impairment of their independence,” Oceana said. “Given the significant number of votes exercised against the reappointment at the company’s AGM on 5 May, and in the interests of good governance, the audit committee announced that it would consult with shareholders on their (PwC) re-appointment.”
Oceana said apart from the delayed results, the company expressed concerns with its annual financial statements around the audit process, including the forensic lens applied by PwC, “notwithstanding a comprehensive forensic investigation by ENS and the adverse impact the delays had on the group’s reputation.”
ENS, also ENSafrica (Edward Nathan Sonnenbergs), is Africa's largest law firm.
“Three months since the publication of Oceana’s audited accounts, PwC have still not finished their audit of the group’s U.S. subsidiary, Daybrook,” Oceana said.
The seafood company, which reported an 8.1 percent decline in group revenue to ZAR 7.6 billion (USD 489 million, EUR 457 million), disclosed it had already begun the process of identifying a potential alternative to PwC. It said discussions with another auditing firm are at an advanced stage.
“The changes to our external audit relationship allow Oceana to move forward with a renewed commitment to rigorous governance and transparency,” Oceana Group Chairman Mustaq Brey said.
Brey said Oceana's board and audit committee had throughout the process of managing the delays in publishing its results, the independent investigation, and company’s engagement with the external auditors, “upheld the highest standards of governance.”
“The board supports the principle of mandatory audit firm rotation and recognizes the importance of appointing independently-minded auditors,” Brey said.
Oceana Group has faced a tumultuous year, with the company’s CEO resigning in February. The company has faced a spate of resignations in recent years, as non-executive director Geoffrey Fortuin and executive directors Lawrence McDougall and Noel Doyle resigned in 2019. Elton Bosch, who was hired as chief financial officer in June 2019, left the company in February 2020.
Photo courtesy of Oceana Group