Haco chairman Chris Kirubi (left) and Tiger Brands CEO Peter Matlare at a
media briefing in Nairobi on May 28, 2015. PHOTO | SALATON NJAU
By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com
In Summary
- Haco Tiger Brands on Thursday said it “will not engage in a witch hunt against any of those involved or suspected of involvement in the scandal.”
- The company said it had instead sealed the loopholes that enabled the sacked managers to hatch the pre-invoicing scheme that helped them shore up profits and give the impression that they had met their targets last year.
South Africa’s Haco Tiger Brands on Thursday said it
had dropped plans to pursue disgraced managers who were involved in an
accounting scandal that took place at its Nairobi factory last year.
Peter Matlare, the chief executive officer of Tiger Brands,
the majority shareholder in Haco, said in Nairobi that the company “will
not engage in a witch-hunt against any of those involved or suspected
of involvement in the scandal.”
Mr Matlare said Haco had instead sealed the
loopholes that enabled the sacked managers to hatch the pre-invoicing
scheme that helped them shore up profits and give the impression that
they had met their targets last year.
“There are those people who have left the company.
We have carried out some internal processes to make sure we fully
understand if anybody else was directly or indirectly involved and what
appropriate disciplinary action needs to be taken internally,” said Mr
Matlare, adding that “one blemish should not give anybody the impression
that there is something rotten at Haco.”
Haco sacked its managing director Geoffrey Mwathi
Kiarie on accusations of falsifying operating profits for the full year
ended on September 31, 2014 by Sh879 million.
Correcting the padding of profits in the Kenyan
operation negatively affected the half-year results of Tiger Brands,
which is listed on the Johannesburg Stock Exchange, forcing the South
Africa firm to report the fraud.
Haco chairman Chris Kirubi said that the sacked
managers did not steal from the company and there was nothing criminal
in the actions of the former management team.
“There was no stealing, just procedural mistakes.
They did not take anything from the company thus there was no material
loss, and there were no bonuses paid either to them or to the agents,”
he said, insisting that goods that were reported to have been sold to
meet the performance targets had not been delivered.
“Subsequently in the new quarter all those goods
were delivered and those invoices reversed and made legitimate.” Mr
Kirubi’s position on Thursday was in stark contrast to his pronouncement
earlier in the week that Haco’s lawyers were looking at the possibility
of taking the sacked managers to court to face civil charges relating
to the scandal.
South Africa’s Tiger Brands, which has operations
in South Africa, Kenya, Cameroon, Ethiopia, Nigeria, and Zimbabwe,
announced last week that its operating income for the six months to
March 2015 declined by three per cent to Sh13.8 billion even as turnover
increased seven per cent to Sh129.4 billion.
Mr Matlare said the drop in sales in the Kenyan
unit was also caused by low morale among employees given that the
investigations into the accounting scandal were on during the period.
The sacked senior managers had effectively sold
forward by declaring sales and moving products off site to third party
warehouses for customers who had not paid and collected their goods.
Haco deals in BIC brand of pens, personal and
household care products such as Ace, Jeyes, Miadi, Motions, TCB, Bloo
and SoSoft. Tiger Brands, the South African multinational, controls more
than 50 of the group’s manufacturing facilities in Africa.
Tiger Brands owns 51 per cent of Haco while Mr
Kirubi owns the rest. The South African group has invested over Sh50
billion in the Kenyan operation since it bought a controlling stake in
the firm in 2008. Most of the money has gone into capacity expansion at
Haco’s Kasarani-based factory.
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