JOHANNESBURG, SOUTH AFRICA — Tiger Brands Ltd has informed the board of Tiger Branded Consumer Goods Plc (TBCG) — formerly Dangote Flour Mills Plc — that it will not provide any further financial support with respect to its investment in TBCG.
Additionally, Alhaji Aliko Dangote, owner of Dangote Industries who also holds a 10% stake in Dangote Flour Mills, Olakunle Alake, Asue Ighodalo and Arnold Ekpe have resigned their appointments as directors of TBCG.
Tiger Brands Ltd has said it is “currently exploring various alternatives with regard to its investment in TBCG.”
In 2012, Tiger Brands bought a majority stake of 63.4% in Dangote Flour Mills, a Nigerian flour, pasta and rice company, for $152 million. This purchase has cost investors millions in write-downs.
This latest turn of events, follows the Oct. 8 announcement that Peter Matlare, the Tiger Brands Ltd chief executive officer (CEO) is stepping down on Dec. 31.
Also in 2014 executives at Haco Industries, a Kenyan subsidiary of Dangote Flour Mills that Tiger has a 51% stake in, overstated its sales to reach operational targets. This preinvoicing and manipulation of profits contributed to a 30% drop in operating profit in the international and export unit during the first half of the year ended March 31. Tiger took action and fired the managing director of its Kenyan unit.