WPP Scangroup’s #ticker:SCAN founder and long-serving chief executive Bharat Thakrar has been suspended from the marketing services firm over unspecified allegations of gross misconduct.
Mr Thakrar, 69, was suspended alongside the chief finance officer Satyabrata Das, effective today.
“WPP-Scangroup Plc announces that the board of directors has suspended the employment of the Chief Executive Officer, Mr Bharat Thakrar and the Chief Finance Officer, Mr Satyabrata Das to allow for an investigation into allegations of gross misconduct and possible offences in their capacity as senior executives and employees of the company,” the Nairobi Securities Exchange-listed firm said in a statement.
“Further announcements concerning this matter will be made when appropriate. For the time being, therefore, shareholders and investors are advised to exercise caution when dealing in the company’s securities.”
Scangroup’s shares traded down on the announcement, touching a new low of Sh5.3 in mid-morning transactions.
Suspension of the CFO indicates that the allegations facing the executives could be financial in nature.
This is the first time a chief executive of an NSE-listed firm has been 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 per cent stake and his holdings was at one time valued at more than Sh1 billion. His ownership now has a mark-to-market value of about Sh250 million.
He sold his shares over the years, contributing to his ownership dropping to the current 10.6 percent.
UK-based conglomerate WPP on the other hand raised its stake in the company to a controlling 56.3 percent through a mix of share purchases and folding some of its subsidiaries into Scangroup.
The chief operating officer Alec Graham will take the helm on an interim basis, the board said.