There's a lot to read in Spar CEO's easy exit

The wording employed by the board to describe Brett Botten’s departure minimises the gravity of the situation.

What should the board do when its CEO is embroiled in a minor but damaging incident involving dubious accounting practises? Of course, you’d fire him, right? But it was too much for Spar, one of the country’s largest food merchants and franchisers.

Brett Botten was given the chance by the board, chaired by Mike Bosman, to phrase his leaving as “an early retirement” from his job as CEO and board member of the firm.

Readers of this newspaper and its sister publication, the Financial Mail, are unlikely to purchase it. Botten, 57, joined the same C-suite just two years ago, beginning on an aggressive cross-border expansion plan that saw the firm expand into Poland and Switzerland. One may assume that any self-respecting CEO would want to see such an important project through and leave it as one of their legacies.

Botten’s “early retirement” occurred six weeks after this newspaper revealed evidence linking him to at least two accounting blunders at a Spar division.

In broad strokes, the study prepared for Spar by law firm Harris Nupen Molebatsi and acquired by Business Day last month expressed concerns about potentially “fictitious loans” worth roughly R11m being used to “inflate the profitability” of its South Rand operation. One whistleblower said that Botten was at the centre of the scandal because he could have earned compensation for making his division’s financial condition look better than it would have otherwise.

Spar has not commented, let alone stated whether it will press charges against the man responsible for what the board has admitted is a reportable accounting irregularity, which is defined as an intentional misstatement or omission of information regarding a financial transaction or matter in auditing parlance.

The board lost little time in emphasising that the episodes were isolated, vehemently rejecting that the accounting discrepancies in the division were indicative of companywide problematic bookkeeping procedures. They clearly have the ability to express themselves.

The wording employed by the board to describe Botten’s resignation minimises the gravity of the situation and smells of loyalty rather than an acknowledgement that something went tragically wrong in the operation of Spar’s South Rand business.

While the business sector is expecting stronger governance and compliance requirements from the state and its corporations, this careless approach is profoundly disappointing.

The information presented here was collected from BusinessDay.