The Botswana Stock Exchange (BSE) has suspended the trading of the shares of Olympia Capital Corporation effective from 25 August 2009 after the company reported contradicting financial statements and failed to report a loss of nearly P17 million.

Mmegi Business has learnt that on the 31 May 2009, Olympia published unaudited preliminary accounts for the year ended 28 February 2009 which showed a profit after tax of P377, 429 but failed to report a loss of approximately P17 million.

The investment company, which is mainly involved in property development and other property-related activities like floor tile manufacturing, recently submitted a draft annual report for the same reporting period.

However, the income statement in the latter report shows a P17 million loss contrary to the profit of P377, 429 reported at the end of May.

The difference apparently emanated from a decision by the directors of Olympia not to consolidate a subsidiary - Plush Product (Pty) Limited - which was making losses and would therefore be liquidated shortly.

In addition, the auditors had qualified the financial statements with full explanation to the directors that they did not comply with Accounting Information System (AIS 27), which calls for consolidated financial information.

The BSE is understood to have held a meeting with Olympia and their auditors and then slapped the company with an immediate trading halt of its securities until the financial information was released to the market.

This is because the market is currently trading based on the knowledge that Olympia made a profit of P377, 429 and that only insiders, including the company's auditors, are aware of the 'change' in profit.

In an interview on Wednesday, BSE listing and trading manager Bopelokgale Soko confirmed Olympia's suspension, which she said would hold until the company published its results.

Though she was reticent regarding reasons for the suspension, Soko said rules clearly state that a company should not be allowed to trade while there is insufficient information on the market.

"There is certain information that is only known to the directors, and that is not right because the market should trade on the same information," she said.

Olympia Capital Corporation Limited is a subsidiary of Kenya-based Olympia Capital Holdings Limited.

The group, along with its subsidiaries, is principally engaged in the manufacture and sale of floor tiles, adhesives and curtain racking. Its subsidiaries and associate companies include Dunlop Industries, Kalahari Floor Tiles, Gaborone Enterprises and Plush.

In 2006, Olympia excited the market when it acquired Plush, the then leading South African manufacturer of blinds and window accessories, through debt and equity financing.

Olympia said the acquisition would give it a strategic positioning in the construction industry in South Africa ahead of a projected boom associated with the 2010 FIFA World Cup in that country.

However, as it turned out, Olympia burnt its fingers with the acquisition as Plush started making losses and seems inevitably headed for liquidation.

The bulk of Olympia Capital Holdings' revenues, about 85 percent, emanate from Botswana where the firm has invested in Kalahari Floor Tiles which manufactures doors and PVC floor tiles windows and exports over 50 percent of its output, mainly to South Africa.

Olympia Capital was hoping to establish a greater presence in the southern African region through acquisitions funded by additional capital raised on the BSE in the coming years.