TCS chases missing money

Total Client Services (TCS) is trying to get back R3.66 million that was fraudulently removed from its bank account.

CEO Shaheed Mohamed says a forensic investigation by PricewaterhouseCoopers Forensic Services indicated an external syndicate was involved in misappropriating R4.96 million, of which R3.66 million has not yet been recovered.

Mohamed says the company is trying to claim back the money from the bank after the investigation, which shareholders were alerted to in May. However, TCS has now tightened its internal controls, Mohamed says.

TCS has been hit by the economic crisis, which has weighed on consumers' pockets. As a result, some consumers have been unable to pay their speeding fines, which affected the company's revenue as it earns a flat fee for each fine paid.

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However, this tender has not aided its half-year results, and revenue for the period to August declined 13.42% to R48 million, while operating profit dropped 85.36% to R2 million. Net profit fell 103.79% to a R347 000 loss, and the company reported a headline loss per share of 0.1c, down 194.26% from the previous year.

TCS says there have been delays in finalising tenders due to ongoing uncertainty about the implementation date of the Administrative Adjudication of Road Traffic Offences Act (Aarto).

However, Mohamed says the company is now moving into a growth phase.

“We anticipate that the next six months will set the path for the future, and we are very enthusiastic on the anticipated prospects and benefits of the imminent implementation of Aarto,” says TCS.

The company lost its bid to continue providing traffic contravention systems and services to the City of Cape Town as its price was too high. However, its contract was extended up to the end of next year, to allow it to wrap up all offences that were in the system up to June this year.

TCS has settled the dispute between it and Labat Africa, and paid Labat the outstanding dividends. TCS was spun out of Labat and listed separately in April 2008. It has also agreed to pay a former consultant's claims against it.

The company's shares were unchanged at 9c in early morning trade.

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TCS wins traffic tender