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‘I never saw it coming’ – wiGroup founder on financial mismanagement

The founder and CEO of SA fintech wiGroup says he never saw any warning signs of the financial mismanagement the firm uncovered just months ago, which appears to have led to the company cutting about 20 jobs.

Ducasse told Ventureburn in a call yesterday that he first picked up the issue in July. The restructuring was carried out in the same month.

“I didn’t spot anything,” said Ducasse. “If I spotted anything I would have done something about it,” he added.

Last week the chief financial officer (CFO) of wiGroup, Morne Patterson, confirmed that he had resigned from the company. It comes as wiGroup revealed last month that it had tasked PwC to conduct a probe into what it is referring to as “financial mismanagement” at the company.

While Ducasse yesterday declined to reveal the details of the financial mismanagement and how many employees were retrenched in the restructuring — saying the matter is private as wiGroup is an unlisted company — he did say the issue was “limited to one area of the company”.

I never saw it coming, says wiGroup founder over financial mismanagement at company

But Ventureburn has calculated that the company slashed about 20 jobs — based on estimates of the staff contingent provided by Ducasse. Yesterday he told Ventureburn that the company at present has “about 130 employees”. In February he told Ventureburn in an interview that the company had over 150 employees.

Speaking yesterday, he said when the financial mismanagement was first uncovered he called clients and told them the incident would have no operational or technical effect. The company has about 130 corporate clients. Client numbers have remained stable since the incident, he stressed.

‘Inappropriate to comment on CFO’

Asked about the resignation of the CFO — on whether he was forced to resign — Ducasse would only confirm that the CFO resigned.

He said he could not reveal any other details, adding that this would be “inappropriate” before the PwC probe which is expected to be completed by the middle of next month, has been concluded.

But he added that as it is an internal audit, the results would only be revealed to the management and the board — and not to clients or the wider public.

‘Part of life’s lessons’

The incident and restructuring could not have come at a worse time for the 34-year-old founder, who has just recently returned from honeymoon after getting married in the same month as the company uncovered the financial mismismanagement.

While Ventureburn questioned whether his mind may have been elsewhere during wedding preparations, Ducasse was quick to point out that this did not have anything to do with his failure to spot the mismanagement beforehand.

He called the incident “all part of life’s lessons”. He admitted that while the company has had thousands of bumps in its 10-year history — including a moment in 2010 when the company was on the brink of closing down before pivoting from a B2C to B2B model — the latest incident has been a “bigger bump”.

However, he said he could not stress enough how supportive his board and team have been since the incident. He added that the company’s investors — which include Investec, Crossfin, Smollen and Virgin — have stood by him, which he pointed out “showed their maturity”.

In addition, clients as well as local founders had been very supportive. About 20 CEOs had contacted him to offer their support and even provide help on how they had dealt with similar challenges. “I think that is the incredible thing about the Cape Town (tech — Ed) community,” he added.

Said Ducasse: “We are not perfect as an organisation, no one is. But we have come out stronger.”

Read more: PwC probe into financial mismanagement at wiGroup: CFO confirms he resigned
Read more: SA fintech wiGroup secures funding from Virgin, Smollan to boost global expansion
Read more: How wiGroup founder switched gears to build growth company around people

  • Max

    Yet another poorly written and researched article on yet another ‘breaking news’ item. Please go back to writing about local startups who can actually benefit from exposure vs the gawker approach you’ve recently adopted.

  • Stephen

    Hi Max,

    Thanks for your message and thanks for visiting Ventureburn.

    Ventureburn endeavours to cover both the good and bad of the startup world in Africa. We are not a marketing site for startup companies.

    regards

    Stephen Timm
    Editor
    Ventureburn