Towards the end of 2014 the UK supermarket giant Tesco found itself embroiled in a major fraud scandal after it emerged that senior executives have overestimated the company’s profits by some 263 million pounds or about P400 million.
The exposé came about just a few weeks after the arrival of new chief executive Dave Lewis, who was brought in to turn around falling sales and profits at what is Britain’s biggest retailer. It came to light when a team of forensic accountants from Deloitte established that the estimate of first-half profits that Tesco had given the City back in August was artificially inflated by that amount, determining that only £118m (P180 million) of the figure related to the first six months of the current financial year but that £145m (P220 million) related to previous years. The inquiry triggered the suspension of eight senior executives, including Chris Bush, the head of the UK food business.
Some economic analysts speculated that increasingly desperate executives were pulling forward payments in order to paint a more flattering picture of the supermarket’s finances, though Lewis dismissed the suggestion that fraud was involved, saying “Nobody gained financially as a consequence of the overstatement of performance.”
Deloitte concluded that supplier payments had been pulled forward or deferred in a manner that was contrary to Tesco’s official accounting policies. It also found there had been similar practices previously and that the sums pulled forward was growing period by period.
The criminal investigation came at a very difficult time for Tesco, struggling to cope with a rapidly changing grocery market amid new competition from discount chains and the rising influence of online retailing. The retailer had continued (and is still continuing) to lose market share while German discounters Aldi and Lidl continue to grow rapidly.
Following the revelations, Tesco revealed that first-half profits had actually plunged by 92%, to £112m, further adding to the speculation that the inflated figures had been meant to shore up confidence in the company by shareholders and the general public and hide the true picture.
If that wasn’t bad enough, the beleagured food retail group found itself in trouble yet again in February this year facing yet another investigation amid concerns that it has mistreated suppliers. UK Groceries Code Adjudicator (GCA) Christine Tacon said she had "reasonable suspicion" that the Groceries Supply Code of Practice had been breached. The GCA will be looking into the supermarket's profits and delays in payments to suppliers in a probe that is expected to take up to nine months.
Financial Times said the retailer will now face a series of allegations, including the "bullying of suppliers", invoicing discrepancies and demanding rebates in exchange for prominent positioning on its shelves.
In this latter malpractice, sadly, Tesco is not alone. Most of the larger supermarket chains are all guilty of the same unfair squeezing of their suppliers, using their clout and huge buying power to create a David and Goliath situation with one side far stronger than the other which is too weak and dependent to argue but there’s no doubt that it came as a bad time for Tesco, with the fraud investigation still ongoing.
But this week came what to many may be the biggest eye-opener of them all with the announcement that the company is about to sell off the last of the private jets used by its top executives. Jets? Plural? It would come as news to most small shareholders, much less to their cash-strapped customers, that the corporation owned even one executive jet, much less a fleet of five.
And in a statement that can only be described as ‘the bleeding obvious’, sure to invoke the astonished response of ‘you think?’, the new Chief Executive Dave Lewis admitted the planes gave the wrong image and therefore the decision had been made to put them up for sale.
To date four have been sold and the final one, a Hawker 800, will be gone by the end of next month. Its flagship seven-year-old, Gulfstream 550, costing £30million (P45m) and capable of flying 14 executives at a time was sold off earlier this month. It was the height of luxury, kitted out with DVD players, widescreen TVs and a bar plus cabins allowing executives to sleep in full-sized beds on longer journeys to America and Asia.
Said a slightly sheepish Mr. Lewis “ In future we will use chartered aircraft only if there is a compelling business justification and travel cannot be completed by scheduled airline.”â€¨â€¨There is a cruel irony here. By its very nature as a discount food seller, Tesco’s image is that of a bargain basement, cutting margins to the core and passing on its bulk savings to is struggling customer base.
Yet the truth was that its top executives were the real beneficiaries of the one-sided price war , enjoying generous salary packages and luxury travel perks regarded by most as the privilege of world leaders, rock stars and royalty whilst most of its frontline supermarket staff are earning minimum wage, as are many of its customers. But this, Mr. Lewis implies, is all in the past and he and his executives are going scheduled, just like regular people but you have to wonder.
Will any of their lowly shoppers en route to the Costa Brava for a budget break and travelling cattle class really find themselves butting up against a (literally) high-flying Tesco exec? Or will they be up front in First Class, feet up and sipping complementary champagne? I wonder?
STUART WHITE is the Managing Director of HRMC and they can be reached on 395 1640 or at www.hrmc.co.bw
There is a saying in South Africa which avers that, “the White man has no kin: his kin is money”. The saying rings very true considering what Mayer Amschel Rothschild – he of the planet’s wealthiest family – once said, that, “Permit me to issue and control the money of a nation, and I care not who makes its laws!”
To the white man, the dollar sign looms so large in his optics that it was precisely the reason he appropriated Africa towards the end of the 19th century. The idea was to develop his continent, Europe, at the same rate as he underdeveloped Africa. Yet he was driven as much by economic imperatives as by sheer greed and prejudice.
A “pagan” King violates the Jewish Temple by setting up an idol in the Holy of Holies
Why, General Atiku, has the Judean setting (present-day Israel/Palestine) being the focus of so much geopolitical fervour over the ages when it is so resource-poor and is not even that agriculturally fecund being a virtual desert? Why have all the superpowers of history locked horns over it since days immemorial?
Just a ‘teaser’: we are all complaining of the ‘hot weather’ and ‘heat’ – but think about it, is this a reminder / warning from the Almighty that if we find this weather ‘hot’ can you imagine what the ‘fires of hell’ will be like should we get there?
Let us take this as a reminder and a ‘warning’ that we should change our lifestyles so that we follow in the path of righteousness and that which our Lord has directed. Failing this we will face the ‘fire of hell’ which undoubtedly will be many times worse than what we are facing on this earth.
Because as humans we have been favoured and bestowed with the power of intellect thus we enjoy greatness over other creation, coupled with a greater responsibility. Should that responsibility be misused then only on the Day of Reckoning will he know we will live in joy or in grief forever.
Since the dawn of creation Allah has sent down thousands of messengers, dozens of Divine Books but only ONE universal Message to humanity. That message of Divine Revelation and guidance is clear, unambiguous and eternal:
Allah is One, He is Master and Creator of the universe and of mankind and to Him is due all worship and obedience.
He has sent humanity Divine Revelation and guidance through His Messengers and His Books.
As death is inevitable in this world, equally is our resurrection in the Hereafter where everyone will face the consequences of their belief, unbelief and conduct in this temporal world.
This is the basic message, teaching and belief of every religion and without doubt we will all be called to account for our lives in this world and the manner in which we conducted ourselves, will be rewarded thereafter, the consequences of which may be joy forever for some or grief forever for others.
“It is He [Allah] Who created Death and Life, that He may try which of you is best in deeds and He is Exalted in Might, Oft-Forgiving.” (Qur’an: 67: 2)
In Islam the teachings of the Qur’an and the Last and Final Prophet Muhammad (PBUH) give clear guidance to the believer on how to live a life in this world so as to achieve success in the Hereafter.
‘If any do wish for the transitory things of this life, We readily grant them, such things as We will, to such persons as We will…… those who wish for the things of the Hereafter and strive for them with all due striving, and have faith, they are the ones whose striving is acceptable to Allah’ (Qur’an 17: 18-19)
In this world when a person sets out on a journey towards our Maker (Allah), he finds two paths, one leading to God and the other path to different destinations. A sincere and faithful believer will always try to find the right path and to live by the Divine injunctions, laws and code that his religion lays down. This requires us to live in harmony with the will of the Creator, in harmony with our own selves, and with the needs of the rest of creation. Unfortunately we have a tendency at times to toy with Divine Law and to surrender it to the laws of man and in the process to translate and interpret them into what fits in with our lifestyle of today.
If we are to use the intellect and the freedom of choice bestowed to us by God Almighty and follow His guidance, we will then live consciously in a state of “submission’ to Him, thus we will be virtuous. On the other hand when we ignore our Creators injunctions we work against the natural order, we tend to create discord, injustice and evil – and we become one without guidance. Therefore it is the intellect and the freedom of choice given to us that we are fully responsible for whatever we do.
However, it would be foolish for us to think of ourselves as totally independent and self-sufficient. If a person thinks in this manner, we become proud and. We will be inclined to become ungrateful for the bounties that we enjoy – the air that we breathe and the food we eat to sustain us, the eyes and ears we use to perceive the world around us, the tongue and lips we use to express our needs, wants and our inner most feelings and emotions. And being ungrateful, we will be inclined to forget or to reject the truth of the existence of God Almighty.
Unfortunately, people have varying views with regards to what the most important characteristic of a person is: for some it is the colour of his skin; for others, it is his economic situation – whether he is wealthy or poor; others think it is his , social or political standing, whether he is ruler or ruled; for others it is his social standing as an aristocrat, middle or working class; yet for some is his birth place and the language he speaks or the tribe he belongs to, etc..
‘Do men think that they will be left alone on saying “We believe”, and they will not be tested? We tested those before them, and Allah will certainly those who are true and those who are false’. (Quran 29: 2-3)
In Islam, these have no significance rather they are merely taken as signs of the creative power of God to enable people to recognise one another. The Almighty declares “O Mankind! Indeed we have created you as male and female, and have placed you in nations and tribes that you may have mutual recognition. However, the most honourable of you, in the sight of Allah is the one who is most God-conscious” (Qur’an: 49: 13)
Hence, the most important characteristic of a person is whether he is conscious of his Creator, believes in Him and through that consciousness submits to Him at all times and in all circumstances.
According to the Islamic view man is created by Allah in a pure state, free from sin. He also created us with the capacity or power to do both good and evil. He gave us the freedom to choose between doing good or evil. The good and evil therefore is connected with mankind’s freedom of choice and responsibility for their actions. “Good” may be whatever is pleasing to Allah and therefore beneficial to us. Whereas “Bad/evil” may be whatever incurs the anger of God and is therefore harmful to man.
‘By the soul, and the proportion and order given to it; And its enlightenment as to its wrong and its right – truly he that succeeds that purifies it, and he fails that corrupts it….. (Quran 91: 7-10)
Therefore one of mankind’s main tasks is to keep away from and ward off evil. This is why Taqwa, piety and God consciousness is repeatedly mentioned in the Qur’an as the most important quality a person should develop in this regard. This means one must be conscious at all times not to over step the limits set by God. It works as a defence against evil and temptation by keeping a person within the boundaries of piety.