Bread scam firm: Boss bails out

Johannesburg - The chief executive officer of South African food group Tiger Brands (TBS), Nick Dennis, intends to take early retirement because it is "in the best interest of the company", it was announced on Friday.

Dennis will retire as CEO and resign as director of the company with effect from the conclusion of the annual general meeting on February 19 2008.

"Nick Dennis has advised that he believes that his decision to take early retirement is appropriate and in the best interests of the company," the group said in a statement.

The company did not give further reasons for Dennis's move, but it has accepted the decision, with chairperson of the board Lex van Vugt saying he recognised "the principle stance" Dennis had taken in reaching the decision.

Van Vught said that the necessary processes had been initiated on an urgent basis with regard to the appointment of a successor for Dennis.

Analysts described Dennis's move as "a significant setback" for Tiger Brands.

"It's bad move and a significant setback for the Tiger Brands. But the board might have been under pressure to let him go because of the bad press the company has received over the past few weeks," one analyst said.

Early last month, the Competition Commission slapped Tiger Brands with a R99m fine after the company confessed a role in the bread and milling price-fixing scandal in the Western Cape.

The fine ? along with unbundling costs ? led to compressed year-end earnings, with headline earnings rising just 6% to 1 283 cents per share.

But had it not been for the costs ? which are unlikely to be repeated ? the group's earnings would have beaten analysts' expectations.

"The anti-competitive activity was entirely unacceptable and contrary to our high standards of corporate governance. It has been an extremely difficult time for the company and its employees," Van Vugt said last week, shortly after the Competition Tribunal confirmed a consent order agreement between Tiger Consumer Brands and the Competition Commission.

- I-Net Bridge

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