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By Moses Kaketo
You must be wondering why there are fewer successful Ugandan companies. Never mind that these companies post good sales and command reasonably good market share. Read more.
Below, we give you classic examples on why these companies are struggling and failing.
The chief executive officer (CEO)of one of companies dealing import and selling of cars in Uganda together with the Marketing Manager stealthily formed a marketing agency to handle marketing and communication for the said company.
Through this agency, the two buddies steal millions of the company’s in the name of marketing and promoting the company and her brands. For each business given out, the agency or better the CEO and the marketing manager take home a sizeable commission. Is there a course that can quickly make me a CEO or Marketing Manager? I want to join As soon as possible.
In a related instance, a few years ago, after realizing a dozen corporate companies where paying millions of shillings in advertising revenue, a managing director of a leading Media house formed an agency to handle these accounts.
The commission from these companies goes directly into the COE’s pockets instead of going to the company’s coffers. Never mind that this CEO is paid handsomely. Welcome to Uganda.
The CEO’s make billions every year. However, they have limited-access to it when it comes to expenditure. They need approvable from the top.
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Some ‘skillful’ CEO’s work with consultants to create a need for service- say, a strategic plan, training for managers, staff, etc. In many cases, such services are not needed, but a scheme to steal company’s money.
This, the CEO’s normally deal with Private and small/ upcoming consultants. Such deals are worth millions of shillings. At the end, the ‘consultant’ and CEO walk all the way to the bank smiling. Otherwise, many of the said consultants have themselves failed to run their own companies or their strategies have never worked for any of their clients.
One of the directors (is active in day-to-day running of the business) of a leading media house in Uganda conspired with the circulation and credit managers of his own company to steal millions from the company.
In one of the schemes, the director connived with the credit manager to write off outstanding debts of clients who were willing to ‘collaborate’. In return, the client would pay like 50-60 percent of the outstanding debts to corrupt debt collector, instead of the full amounts to the company.
For example, if the client’s outstanding debt was say Ugx. 100m, the credit manager would ask for 50m. The credit manager and the stealing director would share their loot.
This went on for a while or it is still going on? And you guessed right, the media house is indeed struggling today.
In a similar scenario, three directors of a leading private primary school in Kampala plotted with the Finance Manager to steal billions of shillings from their school through falsified schemes including deceitful procurement, etc.
When the Head teacher got to know of the scheme, he joined the racket- he recruits pupils who never appear anywhere on the school register. Parents pay cash to the Head teacher. He has since built his own school using resources of the said school. While the school still exists, the standards have really dropped; it’s only a matter of time before it collapses.
A director in a leading Ugandan financial service institution reportedly stole billions of shillings with the aid of the Chief Executive Officer. Knowledgeable sources have it that, the director would ask money from the CEO. This request had a condition- not to show anywhere in the books, that this money was paid to him.
The cunning CEO was good at his game. He would deliver the cash as requested and then cook the books.
Meanwhile, he would also get himself, something without telling his boss. This went on for some time. Well, the CEO decided to voluntarily resign before things turned ugly. Oba how is this financial institution doing today?
Enter Beverage firm. This CEO together with his fraudulent Marketing Manager whom he personally recommended for the job, over the years inflated the marketing budget for their benefit.
And there was a reason to justify this budget- competition was stiff. Meanwhile, the two stealing Generals would spend less than what they budgeted for and share the difference.
Sales executives who dealt with this marketing manager claim that, you had to pay the marketing manager’s commission well in advance before you get the next advert, which adverts were always discounted.
Today, the said CEO is extremely rich, while the company is suffering at the hand of competition that is threatening its existence.
A CEO of one of the top supermarkets in Uganda reportedly conspired with the landlord(s) where the supermarket has branches to inflate rent bill.
In return, the CEO and his close friends would share the difference between the actual rent and inflate the bill.
Meanwhile the CEO continued to ask management to open more branches; little did management know that the CEO had personal interests in the expansion drive. It is for this reason that one of the owners of a leading supermarket in Uganda entrusted operations and payments of his supermarket to his wife who happens to be a director.
Time to exit
Some of the fraudulent CEO’s are smart. When they realize that things might turn ugly, the voluntarily resign, leaving the owners the company to battle with their collapsing company.
Others have been ‘caught’ before they resign. The beauty of being a CEO is that such news will never get to the media and therefore the public will never know.