Deacons East Africa considers two PKF executives as administrators

22 November 2018

Following an extended period of financial difficulties, Kenya-based apparel retail chain Deacons East Africa has announced its openness to the possibility of appointing administrators to help rescue the firm. Two executives from global advisory firm PKF Kenya are currently under consideration.

Deacons East Africa has been struggling to keep its business afloat, having reported consistent losses over the last two years. In the six months leading up to June 30th 2017, the firm’s losses stood at just over Sh 180 million, a figure that has jumped to nearly Sh 230 million for the same period this year.

Despite operating in the most lucrative region in Africa, most of these losses can be attributed to the shutting down of South African clothing retailer Mr. Price. The substantial dip in overall sales resulting from the closure reportedly cost Deacon East Africa nearly 21% of their annual revenues.

In order to help rescue its operations, Deacons East Africa is now considering the appointment of administrators. As elucidated by CEO of Deacons East Africa Muchiri Wahome, “The primary objective of placing the company under administration is to enable it achieve a better outcome for the creditors than would likely to be the case if the company were to be liquidated.”

Deacons East Africa considers two PKF executives as administrators

Currently, the firm is considering two executives to oversee the administration process, namely Peter Kahi and Atul Shah of PKF International. PKF is a global network of consulting firms that offer services in the domains of assurance & advisory, taxation, corporate finance and – most pertinently – insolvency.

Kahi, who is a Partner at PKF Kenya, has an academic background in Commerce, and is a Certified Public Accountant of Kenya. He also holds a number of other qualifications, including the title of Certified Fraud Examiner, Associate at the National Board of Accountants and Auditors in Tanzania, and a Licensed Insolvency Practitioner in Kenya.

Shah, meanwhile, is the CEO at PKF Eastern Africa, in addition to being the Director of PKF Consulting and a Partner at PKF Kenya. He is also the Chairman of PKF’s Africa Borad, a Member of the PKF International Global Council and the Director of the PKF International Africa Board.

An MBA by academic background, Shah is also a Fellow of the Chartered Institute of Certified Accountants (CICA) in the UK as well as a member of the CICAs in Kenya, Uganda and Rwanda. If appointed, he and Kahi will work as joint administrators for Deacons East Africa. 

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Bonuses might be contributing to economic stagnation in Namibia

30 October 2018

According to Managing Director of Headway Consulting Jan Coetzee, the dilution of the Christmas bonus as a concept through its indiscriminate distribution is partly responsible for the stagnation, lack of structure, and lack of innovative effort in the Namibian business environment.

As the leader of an information and communications technology (ICT) firm, Jan Coetzee has been among the most prominent voices surrounding the evolution of the Namibian business environment to become more innovation oriented. The economy appears to be undergoing a transformation, characterised by a greater orientation towards digital integration.

Coetzee has repeatedly emphasised the need to keep up this reorientation process,  explaining how “Namibia is focused on creating a knowledge-based society where technology, innovation, entrepreneurship at every socio-economic level becomes the norm.”

In addition to highlighting the importance of Namibia’s new direction, Coetzee has also elucidated certain challenges faced by the country’s economy, one of which is the indiscriminate allocation of bonuses irresepective of employee performance throughout the year.

Bonuses might be contributing to economic stagnation in Namibia

He explains how the bonus “was conceived as a way of rewarding employees who had performed above and beyond what was expected of them and their job description. Whether it was exceeding their sales targets or performing their duties in a manner that went beyond expectations.”

Now, Christmas bonuses are given out to all employees, which is partly responsible for the deterioration in the quality of Namibia’s services sector, according to Coetzee. The dilution of this incentive structure and the simultaneous absence of management structures removes the possibility of excellence in the business environment.

Coetzee highlights the need to earn the bonus as crucial to Namibia’s economic development. As a solution, he recommends the implementation of some of the best bonus structures across the globe, with the provision that these practices are tailored to match the special circumstances in Namibia.

“This will create a win-win scenario, Namibia becomes a truly service orientated society and improves service delivery and production and people feel great because they know they truly earned their bonus,” he explains. Coetzee's own firm has been considerably active in promoting digital compatibility across Namibia's business environment, primarily through multi-sectoral training sessions