* MARTIN COLLINS: John Durie * From: The Australian * March 23, 2010 12:00AM
SIGMA chief Elmo De Alwis's hold on the top job is slipping fast with every delay in the company coming clean about whatever mess it has got itself into.
Yesterday the company postponed the release of its full-year financial results for a week. This must surely signal that the end is nigh for the likeable chief executive, as the simple fact is the company's credibility is now next to zero.
No matter where the facts lie, the way forward -- assuming there is one -- will be a lot easier with a new person at the helm.
Late last week company insiders were insisting Elmo's position was not in question, but now we have had yet another delay and his tenure looks less certain.
The company requested a trading halt on February 25 and was suspended in March.
Each day's delay brings with it new revelations or allegations about what has gone wrong.
Market credibility is one issue. As damaging, if not more so, is the lack of respect the company is copping from its pharmacy support group.
Its deal with the Chemist Warehouse group has been cited as yet another black hole.
There are suggestions the company has extended its trading terms, with around six months credit on wholesale purchases at cost, or at most a 0.5 per cent mark-up.
It is also suggested the Warehouse debt, at any given time, is more than $250 million.
Given Sigma supplies other full-service pharmacies under the Amcal and Guardian banners, such revelations are not good for group relations.
Then there are reports about loans from the collapsed Allco Finance group supporting its loyalty program, and daily updates on what is wrong with Sigma.
Suffice it to say, the group's credibility is sinking by the day.
The sad reality is that it doesn't much matter whether the reports are right or wrong -- when you close the shutter on market information, you expose yourself to all the allegations.
The longer the company keeps the shutters down, the worse it is.
Having come clean with a supposed mea culpa last week, Sigma has simply dug itself into a deeper hole with the extension of its self-imposed deadline to actually reveal all the facts.
Just what is going on between chairman John Stocker and auditors PwC is not known.
But one can be sure relations are testy, to say the least.
The reputation of one of Australia's most respected non-executive directors is now in question, and he has to make decisive moves to support his shareholders.
All of which suggests Elmo De Alwis's tenure is all but finished.
SIP Price at posting:
90.0¢ Sentiment: None Disclosure: Held
