One of Kenya’s most powerful individuals, WPP-Scangroup founder and Chief Executive Officer Bharat Thakrar seems to have lost his mojo as the major shareholder in the company he founded, WPP-ScanGroup PLC has decided to do away with him over issues ranging from financial irregularities, sexual scandals to stock market manipulation.
The move to remove Bharat caught even the market regulator unawares as they were just informed in the morning, minutes before the public was informed.
However, the departure of Bharat Thakrar together with Chief Financial Officer Satyabrata Das pointed to a problem of corporate governance and less of sexual misconduct, though it has been a serious issue at the leading PR, Advertising and Marketing Agency.
Following the suspension, the board delegated authority to an interim Chief Operating officer Alec Graham to ensure continuity.
WPP-Scangroup is a subsidiary of British communications agency, WPP. It is listed on the Nairobi Securities Exchange (NSE) and is the largest marketing and communication group operating a multi-agency model across multiple agencies in Sub-Saharan Africa.
Some of the WPP-Scangroup agencies are; Advertising Agencies Ogilvy & Mather, SCANAD and JWT; media firms GroupM, Mediacom Africa and Mindshare and digital companies OgilvyOne, Squad Digital and SCANAD Digital. The firm has a presence in 25 countries in Africa including Ghana, Kenya, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia, Senegal, Zimbabwe, Namibia, Malawi and Cameroon among others.
The firm has had serious dominance in the market with sometimes even taking 80 per cent of the PR, Advertising and Marketing business while undercutting or destroying competitions through poaching and blackmail. Senior staff members of WPP-Scangroup who have thought of leaving for rival agencies have had their careers destroyed through badmouthing or outright intimidation.
According to sources in the know, Bharat has been in a sexual relationship with two key ScanGroup employees (Serah and Sheila), both of whom he has extended favours to, including giving them irregular promotions while overlooking those who are qualified for the same. He has also used staff expense account to pay for the holiday of the duo in Kenya and abroad.
Of note is Serah Katusia whose star started to rise in 2011/2012 after getting into a relationship with Bharat Thakrar. With nothing more than a Kenya Institute of Mass Communication (KIMC) certificate, she was deployed to Tanzania in 2013 to head the unit and replace Betty Radier who was moved back to Kenya.
Staff at WPP-Scangroup have not been happy that the current Managing Director of the largest media buying agency in the country (MediaCom) is shallow and clueless in her undertakings. She has been silently nicknamed the advertising destroyer in the country as ethics and corporate governance has been sacrificed for bribery, kickbacks and underhand deals.
Colleagues of Serah Katusia have wondered why she has to have regular lunch and dinner dates with Baharat at Serena Hotel (Nairobi) and elsewhere while other staff members or senior executives of the group don’t get the same access.
Remember when Jeff Koinange had her on JKL? It’s being said that it was done with the proding of Bharat Thakrar.
But WPP-Scangroup staff sensed that Bharat was in trouble when WPP sent Alec Graham to the board in 2020.
While sexual impropriety might be one of the allegations, it’s the smaller issue as the major shareholder of WPP-Scangroup believes that Bharat Thakrar has been involved in financial manipulations as a revenue stream and not core services of PR, Marketing and Advertising.
While WPP-Scangroup offers the above services, it’s revenue from the same is not more than Ksh 600 million from the last declared statement with the group making losses in the segments. What has ironically sustained the business of WPP-Scangroup in the country is the earnings from financial transactions with banks.
One such transaction is the Ksh 4billion stashed cash which WPP invested in ScanGroup during the buyout as capital to be used in acquisitions in the continent. While Bharat succeeded in acquiring many agencies in Africa, it failed to deliver on Nigeria which became impenetrable. So the Ksh 4b has been lying in bank accounts locally and used to corrects the books of WPP-Scangroup which has remained generally a loss-making entity.
One instance is the revenue generated from Kantar Africa Business (research, consulting and data analytics firm) sale. Inside sources have revealed that Bharat used part of the money from the May 2020 deal to pay upfront for the media business for clients in Kenya with the suppliers asked for at least 30 per cent kickbacks, while another tranche was used to invest in one of the Radio Africa businesses.
The Kantar TNS Companies became part of WPP-Scangroup on 1 July 2018 when it acquired 80 per cent shareholding of the Research and Marketing Group Investment Limited, a Mauritian holding company for the Kantar TNS companies operating in Kenya, Nigeria, Ivory Coast, Senegal, Ghana, Cameroon and the UK.
From the Kantar deal, Bharat Thakrar and another board director Pratul Shah pocked more than Ksh 240 million which is 10 per cent of the Ksh 2.4 billion deal. The money was used to pre-pay advertising space for various Scangroup clients in the country through Serah Katusia led MediaCom. Despite Bharat pocketing Ksh 240 million, they also got kickbacks from the media houses paid advert fees in advance while the two also got a good chunk of money from the WPP-Scangroup share price manipulation.
Historical data from the NSE show that the share price was highest during the May 2020 transaction and fell down to the current average levels after the transaction was concluded.
Bharat Thakrar used the proceeds from the sale of Kantar business to pay shareholders a special dividend of Sh4.7 per share, something which is now being investigated by the Capital Markets Authority (CMA).
Now lets face facts. Imagaine competing against Safcom, SCAN,KCB,Radio Africa or other companies we don’t know in business deals involving the one of boys club organization! Insider trading is real @RobertAlai #RIPBobCollymore pic.twitter.com/tzRVMIDD4r
— NYACHOTI SAMBU (@fredsambu) July 5, 2019
The deposed Scangroup founder and CEO was an elite member of the much-touted Nairobi Boys Club which lists KCB CEO Joshua Oigara, the late Safaricom CEO Bob Collymore, Citizen TV staff Jeff Koinange, Radio Africa CEO Patrick Quarco, Politician Peter Kenneth, Capital Markets analyst AlyKhan Satchu among others as members.
With the boys’ club being composed of the leading advertiser, largest bank by asset base, ledia media personality, stock market analyst, leading PR and communication agency etc, pundits opined that the club looked more like a criminal enterprise than a normal grouping of friends.
Market analyst AlyKhan Stachu was in 2019 convicted by CMA of fixing Kenol Kobil share price with friends before the buyout by Rubis. While he was penalised, others thought that it was a slap on the wrist as the punishment was not strong enough to deter such criminal behaviours in the future.