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RPT-Target Australia chief resigns amid probe into rebate scheme

Published 11/04/2016, 07:46 am
Updated 11/04/2016, 07:50 am
© Reuters.  RPT-Target Australia chief resigns amid probe into rebate scheme
WES
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(Repeat story published last week)

SYDNEY, April 8 (Reuters) - The managing director of Wesfarmers Ltd's WES.AX Target department stores, Stuart Machin, resigned on Friday amid an investigation into whether the retailer inflated earnings by bringing forward supplier rebates.

Machin denied involvement in the scheme to boost Target's first-half profit by seeking extra rebates from some 30 suppliers in return for promises of price rises in the second half. However, he said it was time to go.

"Latterly, I have been dismayed to learn of the accounting issues at the half year," Machin said in a statement released by Wesfarmers.

"I was not aware of these, but they happened on my watch and as managing director I accept my share of the responsibility," he said. "The right thing is now for me to move on".

In December, Wesfarmers announced Machin was shifting from his position as Target's managing director to a yet-to-be-identified senior executive role in July.

A Wesfarmers spokeswoman would not comment on earlier press reports that the rebates helped boost Target's first-half earnings by around 25 percent.

The retailer's fiscal 2016 first-half earnings before interest and tax rose 5.7 percent to A$74 million ($55.84 million).

Wesfarmers has accepted Machin's resignation which comes as an internal investigation into the rebates nears completion, according to the spokeswoman.

The Australian Target chain is not affiliated with the U.S. group of stores of the same name. ($1 = 1.3252 Australian dollars)

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