Former Scangroup CEO Bharat Thakrar has threatened to sue the company's UK-based parent WPP for "neo-colonialist practices and discriminatory tactics" which he says were used to eject him from the corporation he founded in 2021.
According to a report by a section of UK-based media, Mr Thakrar says WPP discriminated against him and Scangroup’s finance chief Satya Das through a clear target at business executives who were of Indian extraction, an action that went against Kenyan laws that prohibit any kind of segregation.
According to the report, Mr Thakrar’s lawyers, in a demand letter, also accuse the UK-based advertising agency of leaking details of an internal investigation into alleged financial and personal misconduct to Kenyan media, thus inflicting reputational damage upon him.
“The disciplinary proceedings were in any event discriminatory and amounted to neo-colonialist practices as they were clearly targeted only at our client who is of Indian extraction,” the letter is quoted as stating.
The lawyers also point out that WPP protected a British national high-ranking Scangroup executive who was also involved in the charges levelled against Mr Thakrar at the time of the removal.
The Briton instead got promoted as CFO of one of WPP’s largest companies.
The UK media said Mr Thakrar is understood to be seeking damages in the region of £24 million (Sh4.3 billion) in the suit, and is expected to file proceedings within weeks.
Mr Thakrar confirmed to the Business Daily that he is planning to institute the charges but requested not to comment on the merits of the case.
Mr Thakrar set up the business that grew into Scangroup in 1982, which he later took public on August 29, 2006, in an initial public offering that was six times oversubscribed.
He was the top shareholder at the time with a 28.53 per cent stake. His holdings were at one time valued at more than Sh1 billion.
UK-based conglomerate WPP invested into the business with a 23 per cent holding in 2009 before acquiring a controlling stake in 2013.
In February 2021, Mr Thakrar became the first chief executive of an NSE-listed company to be suspended publicly for ethical misconduct, after Scangroup’s publication of 2020 results delayed by four months, prompting external auditor Deloitte & Touche LLP to sound alarm of possible alteration of financial books.
When Scangroup finally published its financial report in September of the same year, the founder was exonerated as there was no incriminating evidence of the firm's profits being affected.
By that time, however, Mr Thakrar and his co-accused Das had long resigned from the company to await the results of the probe from outside.
Currently, WPP owns 56 percent of the business while Thakrar retains a 10.5 percent stake. However, according to UK media, the ex-CEO continues to lament that WPP manipulated itself into a position to control the Scangroup board before making allegations against him in an attempt to force his eventual resignation.
In November last year, Scangroup joined a host of other NSE-listed firms to issue a profit warning for the year ending last December, saying that it was undertaking a restructuring which would involve the firing of some of its staff to cut operational expenses.
The firm reported a net profit of Sh75.2 million in 2022 from a loss of Sh37.9 million registered in 2021. At the time of issuing the notice, it expected a full-year profit of at most Sh56.4 million.
