Four senior executives have been fired or stood down since auditors Ernst & Young started looking into looked into the abnormalities which were reported to Wesfarmers after Target and Kmart were restructured in March




  Ten employees colluded with suppliers to boost the retailer's earnings
    Target staff offered suppliers a price rise in exchange for extra rebates  
    The rebates were taken as profit, boosting Target's earnings by 40 per cent


Senior executives at Target have lost their jobs over a 'mind-blowingly stupid' scheme' that artificially bolstered the retailer's earnings by offering overseas suppliers price rises in return for rebates.
Wesfarmers launched an investigation into its staff after allegations 10 Target employees colluded with 31 overseas clothing suppliers to increase prices if they offered more rebates, which were taken as profit and boosted the retailer's December earnings by almost $21 million, the Sydney Morning Herald reported.
Four senior executives have reportedly been fired or stood down since auditors Ernst & Young started looking into looked into the abnormalities which were reported to Wesfarmers after Target and Kmart were restructured in March.

Four senior executives have been fired or stood down since auditors Ernst & Young started looking into looked into the abnormalities which were reported to Wesfarmers after Target and Kmart were restructured in March


Photo: Wayne Taylor
Former Target managing director Stuart Machin resigned last week from Wesfarmers.
Four senior executives have been fired or stood down since auditors Ernst & Young started looking into looked into the abnormalities which were reported to Wesfarmers after Target and Kmart were restructured in March
Wesfarmers managing director Richard Goyder said the scheme has damaged the retailers reputation and will be taken 'very, very seriously', according to the Sydney Morning Herald'There is no excuse for this conduct,' Mr Goyder said on Monday.
'Those who know Wesfarmers know we hold our reputation and values highly.
'What's so disappointing is that people have made a decision, probably through an implied pressure they felt, to do something that's mind-blowingly stupid.'
'What's so disappointing is that people have made a decision, probably through an implied pressure they felt, to do something that's mind-blowingly stupid,' Wesfarmers managing director Richard Goyder said


'What's so disappointing is that people have made a decision, probably through an implied pressure they felt, to do something that's mind-blowingly stupid,' Wesfarmers managing director Richard Goyder said



Taking the rebates to profit is against Wesfarmers accounting standards and protocols

The overseas suppliers were reportedly offered price rises of approximately four per cent in the June half, which would have translated to extra rebates to the tune of $21 million by December.
Taking the rebates to profit is against Wesfarmers accounting standards and protocols.
The accounting scandal made Target's earnings before tax and interest $53 million instead of the $74 million reported, while Wesfarmers' true net profit should also drop 1.0 per cent.
Wesfarmers finance director Terry Bowen said there was no evidence to suggest the non-compliant activity had been perpetrated by staff at any of its other retailers, mentioning that it could take time for Target's employees to adopt its culture.
'We have to reinforce the behaviour we want from people,' he said.