Denny Mushrooms landed in hot fat this week when two employees were nabbed for allegedly defrauding the Johannesburg Fresh Produce Market. A vendor who buys from the market was also buttoned.
The market is deeply worried about the mushrooming losses from suppliers dodging the payment of commission.
“We ran an operation to catch people who slithered past our security systems and caught the Denny truck red-handed,” said Jan Mocke, the market’s operations manager. “But they’re not the only ones defrauding us.”
The market appointed a private security company to sniff out the dirty dealers.
The private investigator who headed the raid team, Johan Colsby of Fast Private Investigations, said the Denny fraud had cost the market “hundreds of thousands of rands”.
Suppliers pay 5% commission on all produce they bring to the market. Colsby alleges that the Denny drivers load more pallets of mushrooms on to the truck than is legitimate.
Commission is paid only on the legit mushrooms, while undercover produce escapes the levy. It is then sold to unlicensed agents, who resell it to licensed vendors.
“This has been going on for at least five years,” said Colsby. He first became aware of the problem when he was a security consultant for Denny. “I told them Denny was committing fraud, but the manager just told me to look the other way,” he said. He also claims to have reported the matter to Denny’s principal company, AVI, without result.
Denny CEO Rory Kearns confirmed the arrests, but said he had been unable to clarify the cause. He admitted Colsby had alerted him to fraud, but said a “clear instruction” was handed down to employees to avoid illegal practices.