Haco blames staff morale for decline in sales

Directors of Haco Tiger Brands have defended their company on allegations of financial impropriety, saying the dip in sales was as a result of low staff morale.
Releasing financial results last week for Tiger Brands, which is listed on the Johannesburg Stock Exchange, the chief executive officer, Mr Peter Matlare, singled out Kenya and Nigeria for the drop in profitability.
He said that drop in profitability in its Kenyan arm was caused by the need to re-adjust overstated performance in previous years.
Mr Matlare told investors that the irregularities in the financials was carried out by top executives “in a number of ways that we would not ordinarily expect them to”.
However, the South Africa executives and businessman Chris Kirubi changed this narrative Thursday.
“The investigation involving the accounting practices lowered staff morale, which led to a slump in sales of our goods,” said Mr Kirubi, who owns a 49 per cent stake in the joint venture.

DID NOT STEAL MONEY
“Staff did not steal from the company. Neither money nor goods were taken from the company. There was a mishap in invoicing where goods were ordered in advance in one accounting period but invoiced in another. Staff were able to backdate future sales, which led to the error,” he said.

Tiger Brands, which has controlling majority in the company, had noted that the Kenyan executives led by sacked managing director, Mr Geoffrey Kiarie, altered financial statements and engaged in pre-invoicing to reach their performance targets.
Overstated profits
Stock that was yet to be sold was moved to third party warehouses to make it look like performance targets had been hit. As result, the team is said to have overstated operating profits by over Sh879 million.
“There were no major financial irregularities involved and we have improved internal invoicing procedures to ensure such errors do not occur in the future. The governance of the company is in fine form and we will ensure that our accounting practices adhere to international standards,” Mr Matlare noted.
The Institute of Certified Public Accountants of Kenya said on Tuesday that it had opened investigations into any accounting fraud that might have occurred at Haco Tiger company.