- The move indicates that Mr Thakrar’s departure was related to financial misconduct though the company has not specified the allegations he is facing.
- Scangroup missed the April 30 deadline for publishing its results without giving an explanation to shareholders.
- The Capital Markets Authority (CMA) disclosed to Business Daily the reasons for the delay.
Investigations into misconduct of former Scangroup #ticker:SCAN chief executive Bharat Thakrar has forced the marketing services firm to delay publishing its results for the year ended December as the auditor awaits the outcome of the probe.
The move indicates that Mr Thakrar’s departure was related to financial misconduct though the company has not specified the allegations he is facing.
Scangroup missed the April 30 deadline for publishing its results without giving an explanation to shareholders.
The Capital Markets Authority (CMA) disclosed to Business Daily the reasons for the delay.
“The firm requested for an extension of time to publish their audited financial statements to 31 May 2021 owing to the ongoing investigations,” the regulator said in a statement.
“The Authority granted this request and required them to make a public announcement on the same.”
It is not clear why Scangroup did not announce the extension it received from CMA like other firms including Crown Paints have done. Mr Thakrar, who had been Scangroup’s CEO since 1999, was suspended on February 18 alongside chief financial officer Satyabrata Das.
Mr Thakrar later resigned on March 24, with the company announcing that the resignation was accepted and the investigations would continue.
It also said the search for a new CEO would start as chief operating officer Alec Graham serves on an interim basis.
Mr Thakrar was the first chief executive of an NSE-listed firm to be suspended or sacked publicly for ethical misconduct. Most firms have opted not to disclose the reasons for the sudden departure of their leaders.
Mr Thakrar has been the face of Scangroup which he took public on August 29, 2006 in an initial public offering (IPO) that raised Sh94 million.
He was the top shareholder at the time with a 28.53 percent stake and his holdings was at one time valued at more than Sh1 billion. His ownership now has a market value of about Sh274 million. He sold his shares over the years, contributing to his ownership dropping to the current 10.6 per cent.
UK-based conglomerate WPP on the other hand raised its stake in the company to a controlling 56.3 per cent through a mix of share purchases and folding some of its subsidiaries into Scangroup. Since he took the CEO post in 1999, Mr Thakrar always enjoyed an open-ended contract with the end of his contract marked N/A (not applicable).
The cushy arrangement, which had lasted 13 years, came to an abrupt end when he was suspended.
The bold move by Scangroup is seen as the application of WPP Plc’s strict ethical codes. The multinational has a detailed code of business conduct that states its commitment to fight a raft of crimes and misdemeanours including bribery, discrimination and insider trading.