Shares of WPP Scangroup on Friday’s session fell to a new record low of Ksh 5.36 at the Nairobi Securities Exchange after the company’s board kicked out Founder & Chief Executive Officer Bharat Thakrar and the Chief Finance Officer Satyabrata Das.
The board suspended Mr Thakrar, 69, and CFO citing allegations of gross misconduct and possible offences in their capacity as senior managers of the marketing communication services firm.
Bharat’s Founding Journey
Mr Thakrar founded Scangroup in 1982 as a small independent advertising agency that was then known as SCANAD. Through a mix of organic growth and acquisitions, he built it into Scangroup, one of Africa’s largest marketing communications firms offering services in advertising, media investment management, advertising research, public relations, digital advertising and speciality communication.
Scangroup NSE Listing
In August 2006, Scangroup listed on the Nairobi Securities Exchange via an IPO that raised KSh94 million. At the time of going public, Bharat Thakrar was the top shareholder with a 28.53 per cent stake.
He has sold some of his shares over the years and still remains the largest individual shareholder.
Together with his wife, they own a 10.6 per cent stake valued at more than Ksh 250 Million according to latest public data as of April 2020.
In 2006, Scangroup and British multinational advertising and public relations company WPP entered a partnership, months after its listing on the Nairobi Securities Exchange. This partnership saw WPP acquire a minority stake in Scangroup as part of its efforts to expand its footprint in Africa.
In August 2013, WPP announced that it had agreed to acquire additional shares in Scangroup Limited in Kenya which increased its interest to 50.1% from 33.616 per cent through the purchase of additional shares.
The transaction was carried out by WPP’s subsidiary Cavendish Square Holding which directly owns 40.94% stake in the company as of December 2019.
Change of Name to WPP Scangroup
In 2015, Scangroup Limited changed its name to WPP Scangroup Limited. Announcing the change of name, the chief executive Bharat Thakrar, said then that the change of name signified that WPP Scangroup and WPP plc were now fully merged. Following the name change and acuisition of additional shares, WPP Scangroup became a subsidiary of WPP.
2020 Sale of Subsidiary
In 2020, WPP Scangroup completed the sale of its subsidiary Global Kantar Group to Bain Capital Group for approximately KSh 5 billion, after costs and taxes.
Kantar TNS businesses operates in Nigeria and Kenya; the primary markets for WPP Scangroup. It also conducts activities in other countries including Senegal, Cameroon, Cote d’Ivoire, and Ghana. Its business in Africa includes:
- An 80% shareholding in research and marketing group investment limited
- A 100% shareholding in Millward Brown East Africa limited
- The entire shareholding owned by the company indirectly through its subsidiary Scangroup Mauritius Limited of each of Millward Brown Nigeria Limited and Millward Brown West Africa to Kantar Square Two B.V.
Use of Proceeds from the sale of subsidiary
The company said the board met and considered the use of proceeds from the sale taking into consideration available distributable reserves, potential expansion, and the ongoing cash requirement for the group.
Furthermore, 40% of the proceeds was paid out as a special interim dividend of Ksh8.00 for every ordinary share held to shareholders.
WPP Scangroup recent board appointments
Bharat will be replaced by interim Chief Operating Officer capacity by Alec Graham.
The company’s board on Friday warned shareholders to exercise caution when dealing with the firm’s shares. WPP Scangroup’s share price is down by over 42% in dollar terms over the last one year according to data from Bloomberg.
The stock was volatile on Friday and closed at Ksh 5.54, 3.36% below the record low of 5.36, set on the same day.