WPP Scangroup company has released its financial results for the financial year ended 31st December 2020 after a three-month- delay which was occasioned by the firm’s investigations against its former Chief Executive Officer Bharat Thakrar and the former Chief Finance Officer Satyabrata Das over gross misconduct.
The Marketing and communication company reported a 22% loss in the group revenue for the year 2020 from continuing operations to Kes 2.239 Billion from Kes 2.872 Billion reported in the same period in 2019.
The total loss for the year came in at Kes 1.732 Billion compared to a profit of Kes 158.792 Million reported in the same period in 2019. The loss was attributed to the effects of the COVID-19 on the economy and the ongoing investigations in the company.
Operating and administrative expenses of the Group increased by Kes 720 million from Kes 2.74 billion reported in 2019 to Kes 3.46 billion that was reported during the financial year ended 31st December 2020. The rise was attributed to the accounts receivables, loan provisions, and severance costs resulting from a cost reduction plan.
The group reported a net gain of Kes 2.242 Billion from the sale of its interest in Millward Brown East Africa Ltd, Millward Brown Nigeria Ltd, Millward Brown West Africa Ltd and Research & Marketing Group Investment in June 2020.
“These companies represented a significant part of the Group and this disposal therefore materially affects the results of the Group.” WPP Scangroup in a statement.
Total billings for the full year 2020 declined to Kes 6.34 Billion during the period ended 31st December 2020 from Kes 9.28 Billion reported in 2019. while the comprehensive income for the year amounted to Kes 357 million.
Total assets in the WPP Scangroup stood at Kes 8.74 billion during the period under review, a 32% decline from the Kes 12.8 billion reported in 2019.
The board of directors did not recommend the payment of dividends for the financial year 2020.
Probe on WPP Scangroup CEO and former CFO
WPP Scangroup Board, on 18th February 2021, suspended CEO Bharat Thakrar and the Chief Finance Officer, Satyabrata Das, after allegations of gross misconduct in their capacity as senior executives.
The company did not say how it reached its conclusions and did not release a full report of its investigation on the alleged misconduct of its Founder CEO Mr Bharat Thakrar and the former Chief Finance Officer, Mr Satyabrata Das.
WPP Scangroup said the “investigation did not identify items of a material nature that required adjustment to the results of the Company or the Group for the year ended 31 December 2020 or to the balance sheets at that date.”
However, the board said that interrogations had taken longer than expected as a result of the extended scope of the audit by external auditors.
“During the course of the investigation into the allegations, Mr Thakrar and Mr Das tendered their resignations as Directors and as senior executives of the Company. Following the completion of this investigation, the auditors of the Company extended the scope of their audit work. This extended audit process led to the delay in the Company being able to publish its 2020 results. Both shareholders and the Capital Markets Authority (CMA) have been kept informed regarding the delays and the expected date of publication of the results.” Read the statement from the company.
