Tiger Brands Ltd., South Africa’s largest producer of food and consumer goods, said it fired the managing director of its Kenyan unit after the business overstated sales last year to achieve operational targets.
“The top team in that business went after reaching their target and they sold forward in a way we would ordinarily not expect them to do,” Chief Executive Officer Peter Matlare said at a presentation in Johannesburg Wednesday, referring to Nairobi-based Haco Industries, in which Tiger holds a 51 percent stake. “We got rid of those who did wrong.”
Geoffrey Kiarie was Haco’s MD and has left the company, Matlare told reporters. Another executive has also left the business, while at least three others may face sanctions, he said. Tiger is considering civil charges against those responsible, Matlare said. Kiarie couldn’t immediately comment, he said in a mobile-phone text message.
The unit’s operating profit declined 108 million rand ($9 million) in the first half ended March 31 because of the “preinvoicing and manipulation of profits” in the prior year, Tiger said in a statement. This contributed to a 30 percent drop in operating profit in the international and export unit during the period, Matlare said.
The irregularity at Haco is weighing on Tiger’s goal to increase earnings from businesses outside its home market. Its Lagos-based Dangote Flour Mills business may face a third impairment since it was acquired for about $173 million in 2012, Matlare said.
Tiger declined 3.1 percent, the most since March 31, to 299.50 rand by 3:09 p.m. in Johannesburg, extending the drop this year to 19 percent.