Cadbury MD Fired
 14th DEC 2006

The Board of Directors of Cadbury Nigeria Plc on Tuesday removed the company’s Managing Director/CEO, Mr. Bunmi Oni, from office following the doctoring of its 2005 financial statement. Also dropped for the same reason was the Financial Director, Mr. Ayo Akadiri.
Consequently, the Board named a new acting managing director/CEO, Mr. Wallace Galenz, to take over the affairs of the company.
General Manager/Head, Quotation Department of the Nigerian Stock Exchange (NSE), Mr. Binos Yaroe, told stockbrokers that following confirmation from the Board of Cadbury Nigeria Plc that “its financial statement was overstated, the NSE has lifted the technical suspension it placed on the shares of Cadbury Nigeria Plc.”
Vanguard gathered that Cadbury Nigeria has already received a preliminary report from the accountants investigating the financial irregularities. The report confirmed a significant overstatement of the company’s financial position over a number of years.  A complete review of the business has been initiated by the Board of Cadbury Nigeria.
Arising from the present situation, the company has announced it expects to report an operating loss in 2006 in the range of £5 million - £10 million (N1.23bn - N2.46bn). It will also make one-time exceptional charges in respect of profit and balance sheet overstatements for the current and prior years of around £55 million - £60 million (N13.51bn - N14.74bn). These operating losses and exceptional changes remain subject to year end audit processes.
Following the lifting of the technical suspension on Cadbury yesterday, its share price dropped immediately by the maximum five per cent margin allowed by the authorities for a particular trading day, a development stockbrokers attributed to the discovered financial impropriety in the company, adding that the dwindling price would continue until the matter is fully addressed
Mr Yaroe addressing stockbrokers said the parent company, Cadbury Schweppes had stated that the company’s assets, including building, land properties would be revalued to get the true position of the accounts as the parent company declared that the financial statement had been misrepresented starting from 2003 to date which ran into over N5 billion.
Oni had indicated interest to go on voluntary retirement when the alleged overstatement was discovered and the parent company decided to appoint an external auditors, Price Waterhouse Coopers, to re- examine the accounts which led to the suspension of the former managing director.
Reacting to this development, stockbrokers said it was not a good omen to the market as investors had started offloading their shares.
A stockbroker with Express Portfolio Services Limited, Mr. Ayokunle Oyedeji said: “This development has shown that our market is now transparent if this alteration and falsification of financial statement could be discovered. Although, its negative impact is that the share price of Cadbury would continue to drop and investors will continue to lose money invested in the company.
“It is now time for the stockbrokers, investment advisers and other operators in the stock market to scrutinise companies’ financial statement, because if this is not done, it then means that any misrepresentation of financial statement could lead to wrong investment advice on clients. Also the regulatory authorities and auditors should wake up and live up to their responsibilities.”
Meanwhile, the Chief Executive of Cadbury Worldwide, Todd Stitzer, has admitted the challenge the scandal posed to the company. Speaking at an end of year trading in London, yesterday, Stitzer said: “Clearly, this has been a challenging year with a difficult time in the UK and developments in Nigeria extremely disappointing.”

In Nigeria, Stitzer said the group had found “significant and deliberate” irregularities since Cadbury insisted on putting its own finance person into Nigeria when its shareholding in the Nigerian business rose above 50 per cent in the summer.

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