It was also alleged that Cadbury assisted the distributors to secure bank loans to the tune of N800m, which the distributors allegedly deposited with the company to give the impression of partial payments for the increased credit line of goods.

It was also learnt that the waybills for the goods captured in the new credit limit had already been stamped as “received” by the distributors, whereas most of the goods were still in the warehouses and premises of Cadbury. The stamping was allegedly done at the Cadbury gates.

It was further gathered that the distributors were reluctant to take delivery of the goods in the new credit limit as these were beyond their actual orders and they lacked sufficient storage facilities for the overloaded trade.

The source also stated that the consequence of this forward-selling strategy was that Cadbury would be required by law to pay taxes on the sum of N3.8bn on the sales figures for September.

“It is a waste of company resources because the sum of N1.8bn from the total sales figure was only a credit line extended to the distributors, but it has been passed off as completed sales transactions, now they will have to pay taxes on them”, he explained.

The source stated that “it is this same forward-selling that almost brought the company down in 2006, when it did a forward sales of N16bn, paid both tax and royalty on it before the auditors detected the anomaly”.

It should be recalled that in June 2006, the Securities and Exchange Commission (SEC), expressed concerns over “overstatements” in Cadbury’s financial accounts. The auditors that were appointed to investigate the matter discovered that the irregularity which spanned many years was between N13billion and close to N16billion.

The regulator’s worries covered areas of inadequate disclosure by Cadbury, non-compliance with the corporate governance code and obtaining loans for the payments of dividends to shareholders, contrary to SEC regulations.

Cadbury was sanctioned by SEC and paid a fine of N100, 000.00 in the first instance and a penalty of N 5,000 per day from 30 June 2002 to 14 December 2006 and the Managing Director, Mr. Bunmi Oni and the Finance Director, Mr. Ayo Akadiri, were sacked from the company.

THE CITIZEN further learnt that fear now pervades among staff members who are aware of the latest forward-selling incident and loan brokerage for distributors. They express worry that the regulators may come down on Cadbury and that will add to the crises in the company.

However, it was gathered that not all the distributors were keen to cooperate with Cadbury in the seeming bid to present positive sales figures to its shareholders.

It was gathered that Cadbury was at the verge of delisting CFAO Industries, which is one of its biggest distributors, over the latter’s failure to raise its orders by N400m in September as part of the extended credit limit deal. It was said that Cadbury was not happy with CFAO because the management felt slighted by CFAO’s attitude.

Meanwhile, a CFAO staff who pleaded anonymity confirmed that his company had incurred the wrath of Cadbury, but added that it was not CFAO’s fault that it could not raise its order as it was concerned about overstocking goods because “most of Cadbury’s products have a shelf life of twelve months but still the company kept overloading the trade in order to meet target and look good before investors”.

“Some products that are nearing expiration are been moved around regions and this comes at a huge cost to Cadbury,” he further stated.

Another distributor also explained that he had reservations for the increased credit limit because “the business is becoming too tough for all the trade partners of Cadbury because their product sales have been based squarely on distributor promotions.  Just in the first quarter of this year, which was in March, Cadbury gave its distributors 2 percent incentive, and in June, it was 4 percent incentive. In September, it was another 4 percent incentive”.

“Sales have been very low from distributors’ channels and many of them are disenchanted with the whole thing, making some of them to start looking for other possible opportunities elsewhere”, he added.

THE CITIZEN also gathered that Cadbury has allegedly been unable to redeem promotions prizes the distributors gave out to consumers on its behalf since January. The amount to be redeemed was said to be dependent on the size of the distributors and it was learnt that some were owed up to N10m.

Apart from the financial troubles, it was further learnt that Cadbury Plc is also facing a human resources crisis. In the last one year, it has lost more brand managers than it did in two decades. At the last count, about six have resigned. For instance, the brand managers of Tom Tom and Tang recently resigned their appointments and both now work for Reckitt Benckiser.

The multinational company was said to have also lost two directors- sales and marketing- almost simultaneously in the last six months. In the same period, four senior managers have resigned, while two divisional sales managers have also put in their resignation notices. A marketing manager and the former corporate affairs manager who now works with Nigeria Breweries Plc threw in their towels. As at press time, there is no one managing its fruit-flavoured drink product, Tang.

“The gale of resignation in Cadbury is unprecedented. So many staff are not happy with the management in several ways. It appears they are imposing outsiders on old staff, thereby killing brand loyalty. Our company used to be an employer of choice but I doubt if that glory is there again. True, people are not happy that key roles in the company are filled by people coming from a particular multinational in Nigeria, as if we here are not capable of taking the company to greater heights,” lamented a staff who declined to be named .

It was learnt that Cadbury has continued to recruit additional staff to support the trade, but some of the current employees have expressed concern that this might add pressure on the already-bloated overhead of the company.

It was also gathered that four staff members presently manage a single distributor. The company also attached two retail managers, one wholesale manager and one territory commercial manager to one distributor of only two products- Bonvita and Tom Tom.

It was also alleged that Tang was not doing well in the market due to unrealistic targets Cadbury set for the new product and its pricing default. Due to these challenges, the company, it was learnt, first discounted the price heavily for distributors before it started writing-off the debt incurred on the product, an exercise which is still on-going.

Most of the staff were said to groan under intense pressure from the management that coerced them to make unrealistic performance commitments on a regular basis.

For instance, it was learnt that the last Project Manager of Tang, Mr. Jones Mgbolu was given a one-month ultimatum to turn around the fortunes of Tang. But he opted to resign than get embarrassed.

Meanwhile, Cadbury has dismissed as “untrue the claims of forward-selling” to boost its sales profile.

The Corporate Affairs Manager of the confectionary giant, Mr. Bala Yesufu, told THE CITIZEN that there was no iota of truth in such claims. He said that “sales are only completed when you have the money in your account, as such Cadbury could not have recorded uncompleted transactions in its sales books”.

Yesufu added that the assertion “is a figment of the imagination of people who do not know what is going on in Cadbury.”

On the relationship of Cadbury with its distributors, Yesufu stressed that “as a responsible organisation, Cadbury redeems its pledges on promo prizes and is not indebted to any distributors as regards promo campaigns”.

He therefore advised any distributors who might have contrary views to come forward with their claims.

Yesufu also told THE CITIZEN that human resources issues were not peculiar to Cadbury. He said that “people have the right to their choices of employment; they come and go, sometimes for greener pastures and other personal reasons; and you do not need to ask people why they are leaving.”

He however confirmed that Cadbury has continued to employ new staff to support its trade as well as fill vacant positions.

“It is not wise to leave a vacuum when people resign from the company”, he added.