Spar’s incoming chairperson to take on executive role as part of crisis management strategy
Retailer Spar is moving quickly to put out the corporate governance fire sparked by recent allegations of “creative accounting” followed by the resignation first of chairman Graham O’Connor and then chief executive Brett Botten.
With Botten set to step down on Tuesday, 31 January, the company has chosen to shift Mike Bosman’s new role as non-executive chairman to that of executive chairman, with effect from 1 February. The key difference is that a non-executive chairman maintains an arm’s length from the actual running of the company while an executive chairman is more actively involved in running the ship (or shop in this case).
The background info is that the company auditors, PricewaterhouseCoopers (PwC) notified Spar that there was an irregularity that should be reported to the Independent Regulatory Board of Auditors. Following consultation with external auditors, the board agreed that an “irregularity” had occurred.
Read in Daily Maverick: “Spar shuffles board in bid to address governance issues, fraud allegations”
A written loan agreement was entered into “between a willing lender and borrower through a commercial bank, at normal interest rates”. However, the board conceded that the loan did not seem to have served any real commercial or economic purpose and should not have taken place. The board has confirmed that an extensive review of all loans arranged by Spar for retailers identified two other transactions of a similar nature, with the combined value of all three loans standing at R11-million. However, management maintains that the loans were “isolated and occurred five years ago”.
Botten was forced to fall on his sword and announced his retirement earlier this month.
Management says it is confident that Botten can be replaced within three months, with both internal and external candidates being considered for the position of chief executive. Once the new CEO takes up the role, Bosman will return to the position of independent non-executive chairperson.
Bosman is no stranger to the boardroom and is currently also non-executive chairman at Spur and the wine company Vinimark Holdings. He is a non-executive director at AVI, EOH and MTN. Bosman’s LinkedIn profile states that in his spare time he is also a professional helicopter and jet pilot. Hopefully, he can fly Spar out of the turbulent air space to a safe landing. BM/DM