Employees at Geelong-headquartered national retailer Target have been disciplined for their role in negotiating inflated supplier contracts worth around $21 million.
Wesfarmers managing director Richard Goyder said “appropriate action is being taken against the Target employees who were found to be directly involved”.
“The investigation into this matter was swift and comprehensive. It identified that the full arrangements were not disclosed to Wesfarmers or its auditors,” Mr Goyder said.
“Target is now working with suppliers to unwind the arrangements.”
Mr Goyder said he was disappointed in the actions of those involved.
“There is no excuse for this conduct,” Mr Goyder said.
“We set very clear direction and expectations at Wesfarmers crystallised in our code of conduct and supported by detailed group policies, divisionally specific accounting policies, and regular staff training.
“We encourage and expect adherence to a strong culture of managing for long-term sustainable growth over short-term gain, which is regularly reinforced by the Wesfarmers board and which should have guided behaviour.
“Wesfarmers will take immediate action throughout the group to reinforce the importance of compliance with its policies and governance practices.”
The issue claimed Target managing director Stuart Machin last week when it emerged following a restructure.
Mr Machin said he was unaware of the accounting issues but accepted his share of the responsibility.
The investigation found that rebates of $18.1 million and supply arrangements of less than $3 million did not conform to Wesfarmers accounting practices.
