Britam’s financial turbulence exposes the underbelly of a struggling giant, possible cooking of books of accounts
Exactly a month after retirement of the long serving immediate former Group Managing Director Benson Wairegi, the regional financial services group has been plunged into headwinds.
Wairegi’s tenure at the helm was marked by hyped sterling performance and exponential revenue growth of the organisation that has now come crumbling exposing what could have been a stage managed performance record of a cash-strapped entity gasping for capital injection to survive.
Inadvertently, Wairegi’s timely departure would have saved his legacy not to oversee the collapse of the blue-chip after it became apparent weathering further downturns and operate profitably was no longer tenable.
In the first half of 2020, Britam Holdings Plc registered a net loss of Sh1.6billion compared to a profit of Sh1.7billion during the same period in 2019.
The announced retrenchment of up to 100 senior executives will be overseen by Wairegi’s predecessor Tavaziva Madzinga who took over the mantle on February 1, 2021.
While handing over the reins of leadership to Madzinga, Wairegi welcomed the new Group Managing Director and wished him well.
“I am delighted to handover to you the overall management of Britam Holdings Plc. You can count on my support and I am confident that you will lead the company into new frontiers,” said Wairegi.
After four decades at the pinnacle, Wairegi’s leadership is famed for having the company enlisted in the Nairobi Stocks Exchange (NSE), transforming the once modest home service Life insurance firm into a Pan-African financial services powerhouse and also led Britam’s forays into the region, driving the now largest life insurance firm into six others East, Central and Southern Africa markets.
However, all is not rosy at the troubled institution as shareholders have begun withdrawing in droves over fears of imminent collapse.
Yesterday, the board of Britam Holdings Plc announced planned summary dismissals of 140 senior and mid-level managers citing dwindling revenue and duplication of roles.
The company will spend up to Sh700million in compensation for the sackings and Voluntary Early Retirement (VER) scheme.
“The review of the organisational structure is also expected to significantly improve service standards, reduce corporate and shared service costs, reduce unnecessary overlaps and put the customer at the centre of the business…the business realignment process will result in the elimination of some roles.” The company said in a statement.
In 2018, Britam spent Sh664 million in compensation for to laying off 110 staff members.
