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Multi-million fraud at Red Stripe
By Durrant Pate
Senior Staff Reporter
JamaicaHerald
Red Stripe has been hit with a multi-million dollar fraud, which could run as high as $50 million. Shareholders were told at last week’s annual general meeting of the company in Kingston, that entity’s stock of bad debts had tripled over the last year, climbing from $23.8 million to $85.2 million for the financial year ending June 2007.
Checks by the Sunday Herald revealed that millions of dollars in bounced cheques contributed to the huge stock of bad debts - the highest recorded on the company’s books in recent years.
Company officials declined to give details of the losses at the AGM. When contacted, managing director, Mark McKenzie, would only say the irregularities were uncovered and were being investigated by the appropriate authorities. “I can’t say anything more on the matter,” McKenzie concluded.
Investigations by the Sunday Herald suggested that the perpetrators of the $50 million fraud could have been assisted by persons inside the company. One person was fired, but it has not been ascertained if the dismissal was linked to the ongoing probe. But auditors and Fraud Squad detectives, who were recently called in, are combing through the books to determine the extent of the irregularities.
New measures have also been employed to prevent a recurrence, with a greater level of financial accountability and more detailed cheque clearing methods being adopted.
Meanwhile, there was much good news coming from the company’s annual report, which showed the entity increasing its gross profit by four per cent to $3.95 billion, coming from $3.79 billion recorded last year.
This was due mainly to higher volumes traded. However, there was a decline in the gross profit margins, although total turnover for the financial year increased by 12 per cent to $11.3 billion.
Selling and administrative expenses were contained in line with inflation, ending the year at $802 million, compared to $750 million recorded last year. Domestic and export volumes, taken together, registered an eight per cent growth year-on-year, but total export volume was three per cent lower than in the previous year, due to the inclusion of a large one-off shipment of Guinness Stout to Trinidad in the previous year.
McKenzie told the shareholders that if that shipment was excluded, export shipments would have registered a seven per cent growth, with shipments to the US market improving by four per cent and 33 per cent for the Canadian market. Exports to the other markets, including Australia and Europe, also registered growth.
By Durrant Pate
Senior Staff Reporter
JamaicaHerald
Red Stripe has been hit with a multi-million dollar fraud, which could run as high as $50 million. Shareholders were told at last week’s annual general meeting of the company in Kingston, that entity’s stock of bad debts had tripled over the last year, climbing from $23.8 million to $85.2 million for the financial year ending June 2007.
Checks by the Sunday Herald revealed that millions of dollars in bounced cheques contributed to the huge stock of bad debts - the highest recorded on the company’s books in recent years.
Company officials declined to give details of the losses at the AGM. When contacted, managing director, Mark McKenzie, would only say the irregularities were uncovered and were being investigated by the appropriate authorities. “I can’t say anything more on the matter,” McKenzie concluded.
Investigations by the Sunday Herald suggested that the perpetrators of the $50 million fraud could have been assisted by persons inside the company. One person was fired, but it has not been ascertained if the dismissal was linked to the ongoing probe. But auditors and Fraud Squad detectives, who were recently called in, are combing through the books to determine the extent of the irregularities.
New measures have also been employed to prevent a recurrence, with a greater level of financial accountability and more detailed cheque clearing methods being adopted.
Meanwhile, there was much good news coming from the company’s annual report, which showed the entity increasing its gross profit by four per cent to $3.95 billion, coming from $3.79 billion recorded last year.
This was due mainly to higher volumes traded. However, there was a decline in the gross profit margins, although total turnover for the financial year increased by 12 per cent to $11.3 billion.
Selling and administrative expenses were contained in line with inflation, ending the year at $802 million, compared to $750 million recorded last year. Domestic and export volumes, taken together, registered an eight per cent growth year-on-year, but total export volume was three per cent lower than in the previous year, due to the inclusion of a large one-off shipment of Guinness Stout to Trinidad in the previous year.
McKenzie told the shareholders that if that shipment was excluded, export shipments would have registered a seven per cent growth, with shipments to the US market improving by four per cent and 33 per cent for the Canadian market. Exports to the other markets, including Australia and Europe, also registered growth.
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