WPP Scangroup's stock fell by 7.4 per cent after the advertising firm suspended two of its top executives, including chief executive Bharat Thakrar, the man who founded Scangroup.
Thakrar and chief finance officer Satyabrata Das were pushed out of the C-suite of the listed company for what the board described as allegations of “gross misconduct".
The announcement jolted the trading of WPP Scangroup shares at the Nairobi Securities Exchange, where the advertising company first listed in 2006.
Its share traded at Sh5.48 yesterday compared to Sh5.94 on Thursday, before gaining some ground to close at Sh5.60.
In a cautionary statement, the board said the two senior managers were asked to step aside "to allow for an investigation into allegations of gross misconduct and possible offences in their capacity as senior executives and employees of the company."
- 1 Scangroup suspends CEO Bharat Thakrar over alleged gross misconduct
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- 3 How I started a multinational without college education
- 4 Scangroup parent company unveils cost-cutting measures
It was not immediately clear what constituted the gross misconduct.
“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,” said WPP Scangroup’s public statement.
The suspension was a stunning decision that rattled the apex of a listed company, with some observers saying it was unprecedented.
A source at the Capital Markets Authority (CMA), while confirming the veracity of the statement, said the watchdog was not aware of the allegations against the officers.
Thakrar has since been replaced by an interim chief operating officer, Alec Graham. The board said it would soon consider the appointment of an interim chief financial officer.
Thakrar’s name is synonymous with advertising in Kenya, having started Scanad as a one-man agency in 1982.
In several interviews, he has talked of how he honed his skills in advertising from his father who was a commercial director at Skyline Advertising Agency, the largest advertising agency in Kenya at the time.
“I remember accompanying him to work where he would put me in an empty office to study in preparation for my Certificate of Primary Education examinations,” said Thakrar in an earlier interview with The Standard.
Scanad grew to Scangroup and was listed at the NSE in 2006.
Six years later, Thakrar ceded a controlling stake to WPP Group, a British advertising firm, with the company changing its name to WPP Scangroup. It has a physical presence in 25 African countries.
WPP has a 52 per cent stake of the issued share capital through its subsidiaries, Cavendish Square Holding BV and Russell Square Holding.
In his 40-year career, Thakrar has overseen numerous advertising campaigns for top brands.
They include Rally Gum, Fiat Uno, Princess Patra, Knorr Soup, National Bank and Trade Bank in the early days of the firm’s precursor, Scanad, in the 1980s and 1990s.
In mid to late 2000s, there was Tusker Milele, Kenya Airways, Niko Na Safaricom, and most recently, ‘Stori ibambe’, ‘Never miss a moment’ and ‘This is my Kenya’ campaigns for Safaricom and several others for Coca-Cola, Unilever and Airtel.
He and his wife Sadhna have the largest individual shareholding at Scangroup at 10.48 per cent, according to latest filings with CMA.
Using yesterday’s share price, their wealth is valued at Sh248.3 million.
In 2019 Thakrar earned Sh88.5 million in annual salaries, allowances and other benefits.