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Overstatement saga: SEC invites Cadburys board, management

Category: People


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Overstatement saga: SEC invites Cadburys board, management

May 14, 2007/ Guardian

  

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">The Securities and Exchange Commission (SEC) at the weekend summoned the board and management of Cadbury Nigeria Plc before the Commission\'s Administrative Proceedings Committee (APC).</P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><?xml:namespace prefix = o ns = \"urn:schemas-microsoft-com:office:office\" /><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">APC is the Commission\'s court, floated for the resolution of conflicts involving securities and disputes between capital market operators.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">SEC said in a circular made available to the News Agency of Nigeria (NAN) that the sitting of the APC, scheduled to hold in <?xml:namespace prefix = st1 ns = \"urn:schemas-microsoft-com:office:smarttags\" /><st1:City w:st=\"on\">Abuja</st1:City> between May 21 and 22, was a fallout of the preliminary investigations into the alleged understatement in Cadbury <st1:country-region w:st=\"on\"><st1:place w:st=\"on\">Nigeria</st1:place></st1:country-region> accounts from 2002 to 2005.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">The Commission, which declined to give details of its preliminary investigations, said that it had become necessary to invite major actors in the company\'s operations to explain their role individually and collectively.</P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">Among those slated to appear before the APC are the Chairman, Mr Uduimo Itsueli, the former Managing Director, Mr. Bunmi Oni and Executive Director of Finance, Ayo Akadiri.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">Others are all the executive and non-executive directors and three executive management staff namely Mr. Olusegun Aina, Mr. Akinbode Gbolahan and Mr. Tunde Egbeyemi.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">SEC also ordered three shareholders in the company\'s audit committee, Thomas Ayorinde, Z.C. Enunwa and S.J. Balogun to appear before the panel.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">Cadbury\'s former auditors, Akintola Williams Deloitte and Union Registrars Limited were also invited to explain their roles in the understatement saga.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">The board of Cadbury <st1:country-region w:st=\"on\"><st1:place w:st=\"on\">Nigeria</st1:place></st1:country-region> on December 1, 2006 removed Oni and Akadiri from office following the alleged doctoring of its 2005 and 2006 financial statements.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">The confectionery giant in a statement said it stood to lose about N2 billion from its 2006 financial year, following the doctoring of the company\'s financial statements.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">Consequently, Oni and Akadiri were relieved of their jobs.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">The investigation, which was carried out by PriceWaterhouseCoopers, indicted both officers for financial misconduct and they were subsequently sacked.</P>

 

<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\"><o:p>&nbsp;</o:p></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt; TEXT-ALIGN: justify\">\"On account of this, Cadbury Nigeria Plc will report an underlying operating loss for 2006 of between N1 billion and N2 billion. We also expect to make one-time exceptional charges in 2006 of between N13 billion and N15 billion in respect of the profit and balance sheet overstatements, which will considerably diminish company reserve,\" the company said. <I style=\"mso-bidi-font-style: normal\"><SPAN style=\"FONT-SIZE: 8pt; COLOR: #999999\"></SPAN></I></P>



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