Olympia Capital’s new blues

Olympia Capital’s troubles seem not to have ended with its hasty retreat from South Africa’s market through spinning off its loss making subsidiary, Plush Property. Some offshoots remained and are causing discomfort to the Nairobi Stock Exchange-listed investment company.

Late last month, the trading of shares of its Botswana Stock Exchange (BSE)-listed Olympia Capital Corporation, was suspended after it misrepresented its financial position by failing to disclose a loss of over Sh190 million (17 million Botswana Pula).

“We are back. We started trading last Monday,” Olympia Capital Holdings chief executive, Michael Matu, told Smart Company on Saturday.

Media reports from Botswana say that on the May 31, 2009, Olympia published unaudited preliminary accounts for the year ended February 28, 2009 reflecting a profit.

However, the income statement in a latter report showed a P17 million loss contrary to the profit of P377, 429 reported in May. (One Pula is equivalent to Sh11.) The difference resulted from Olympia Capital directors refusal to incorporate the loss emanating from Plush Product (Pty) Ltd on the ground that they were to sell it.

Their auditors also disagreed, qualifying their opinion on the financial statements for failure to comply with Accounting Information System (AIS 27), which calls for consolidated financial information.

Financial information sent to the NSE early August shows that the group reported Sh66 million in pre-tax profit before factoring in Sh200 million in loss from discontinued operation. It is this Sh200 million pre-tax loss that the management failed to disclose to the Botswana market resulting in suspension of its share trade.

“What happened is that when we published our results, we did not consolidate a subsidiary because we considered it a discontinued operation,” Mr Matu is quoted telling Bloomberg.”

Meanwhile the company has announced changes to its board, effective September 1.

Mr Shyamal Bhavani, the managing director of Botswana-based Kalahari Floor Tiles (pty) Ltd who has been with the firm since 1992, takes over from Mr Mwangi Wamae as chief executive of Olympia Corporation. This is in addition to retaining his role at Kalahari Tiles.

Mr Mwangi Wamae, Mr Peter K Muiruri and Mr Suresh Lakhani have left the board. Olympia Capital Holdings Ltd, the parent company of Olympia Corporation now joins the board as a corporate director. The Olympia Holdings alternate director will be Mr Lakhani, who until September 1 was a substantive director.

Mr Matu, the CEO of Olympia Capital Holdings, will handle projects at Olympia Corporation.