The WPP board has been accused of “neocolonialist practices” by a disgruntled Kenyan businessman, who alleges the advertising giant used “discriminatory” tactics to drive him out of his own business.
Bharat Thakrar, founder of Scangroup, one of Africa’s largest marketing agencies, has claimed that the FTSE 100 company discriminated against him and Scangroup’s chief financial officer, Satya Das, in breach of Kenyan law and “clearly targeted” the company executives who were of “Indian extraction”. ‘.
In a letter from Thakrar’s lawyers seen by The Mail on Sunday, the former Scangroup chief executive also accused the UK-based advertising agency of “deliberately” leaking details of an internal investigation into alleged wrongdoing. financial and personal conduct to the local media and causing “reputation.” damage’.
“In any case, the disciplinary procedures were discriminatory and constituted neocolonialist practices, as they were clearly directed solely at our client, who is of Indian origin,” the letter said.
Thakrar’s lawyers added that WPP had protected a senior non-Asian Scangroup executive involved in the matter, who went on to work for another company under the group’s umbrella. Several other WPP employees have also been named as part of the claim.
Claim: Allegations could become another headache for WPP
WPP denies the allegations. A spokesperson said: “Bharat resigned from WPP-Scangroup in 2021 following allegations of wrongdoing between 2014 and 2018.”
Thakrar set up the business that would become Scangroup in 1982 and WPP invested in the business with a 23 percent stake in 2009 before acquiring a majority stake in 2013.
Today, WPP owns 56 percent of the business, while Thakrar retains a 10.5 percent stake.
But the former boss alleges that the advertising giant “manipulated itself into controlling Scangroup’s board” before leveling allegations against him in an attempt to force his eventual resignation in March 2021.
Thakrar is understood to be claiming damages in the region of £24 million and is preparing to bring proceedings within weeks, according to a person familiar with the matter.
The allegations could become another headache for WPP after police detained an executive at its GroupM media agency in China on charges of bribery. The WPP fired the executive in October.
The WPP’s reputation was already affected in 2018, when its founder, Sir Martin Sorrell, resigned following allegations of misconduct.
The group is also struggling to improve its fortunes amid a slump in advertising demand that has seen its share price fall 23 percent in the past 12 months.
Last month, the group revealed plans to invest £250m in artificial intelligence this year and improved its medium-term financial targets thanks to a cost-cutting program that aims to save hundreds of millions of pounds.
The company is also considering offloading its 40 per cent stake in market research outfit Kantar, which is expected to raise billions of pounds.
This followed a disappointing third-quarter trading update when WPP issued a second straight profit warning in as many quarters, blaming a slowdown in customer spending in the US and China.
WPP’s sluggish share price performance has also sparked speculation that it could become a takeover target, with US private equity groups Blackstone and Silver Lake believed to be among interested parties.