Former Target executives under the spotlight.

An investigation by Wesfarmers into deals with about 30 unnamed overseas suppliers which helped boost Target’s earnings by about A$17million or 25%, in the six months ended December 2015, has placed yet another Australian retailer under a cloud.

The news broke in The Australian Financial Review’s Chanticleer column on Thursday, and the suppliers are understood to have agreed to give Target additional rebates in return for a guarantee of higher prices before the end of the financial year.

This now places a shadow over the reputations of former Target managing director Stuart Machin and other Target executives until Wesfarmers releases the results of the probe which is expected to be within this month. Wesfarmers’ head of group accounting, assurance and risk Colin Pavlovich, is heading the investigation in conjunction with Wesfarmers’ auditors, EY.



According to the AFR, rather than booking the extra rebates against the cost of inventory, in line with accounting standards and Wesfarmers’ protocols, the rebates appear to have been taken to profit, giving the chain a temporary boost in earnings.

The matter was raised as a potential concern with senior Wesfarmers executives by a Target team member after Guy Russo (pictured)  stepped into the chain’s senior management role last month. Former CEO Stuart Machin, left Target on March 11, a week after Russo arrived and three months ahead of his original departure date, could not be contacted for comment by Fairfax Media.

It appears that several other British retailers hired by Machin to help turn around Target have also departed in the last few months. These include Target’s director of merchandise trading, Richard Jones, who is returning to the UK and Target’s finance director Graeme Jenkins who resigned in December, is also returning to the UK.