Choppies boss fingered in money laundering claims

02 Sep 2018

The fight for the control of Choppies Zimbabwe branched off into a new controversy last week with group Chief Executive Officer Ramachandran Ottapathu and senior managers being implicated in money laundering allegations involving millions of Pula.

One of the companies fingered in the alleged money laundering pipeline is Pratosh Investments which is believed to be registered in Botswana with Botswana directors.

Documents passed to the Sunday Standard reveal that Siqokoqela Mphoko, Executive Director and senior partner of Nanavac Investment which owns Choppies Zimbabwe made a sworn statement last week to the Bulawayo CID police Anti-Corruption Unit that Nanavac was being used to launder money ranging between P24 million to P39 million. The statement was made before a Superintendent K Mpofu on 28th August 2018 1600 hours. Mphoko has also deposed an affidavit with the High Court of Zimbabwe in Harare claiming that Ottapathu known in business circles as Ram was abusing Zimbabwe criminal and civil laws in a bid to stop him from investigating the apparent money laundering.

Can of worms

In his court papers, Mphoko claims that “large amounts of monies were from time to time being brought into different shops as cash and then entered as sales when in fact the cash was not from sales. This cash would then be removed from the shops without being banked and “parked” in the accounting books as having being set aside for projects.

Mphoko who is the son of former Vice President of Zimbabwe Phelekezela Mphoko on the other hand appeared in court last week facing 170 counts of fraud alternatively charged as theft, after he allegedly swindled Choppies supermarket of more than $50 000 (more than P500 000). Mphoko, who resides in Hillside suburb in Bulawayo, appeared in court for initial remand on Friday and was ordered to pay $200 bail.

In his court record, Mphoko claims that the criminal application filed by Ottapathu on behalf of Choppies Distribution Centre and Choppies Enterprise Limited was a strategy to “bar me from accessing the shops and all premises of the company and to keep me away from all communications with staff” to forestall investigations into the apparent money laundering. Mphoko stated that, “the staff member directly responsible for the movements of this cash, that is, who will have it brought into the shops and thereafter removed after having being entered as sales receipts is Athul Mohan, the operations Manager who I believe has been working with the deponent (Ramachandran Ottapathu). To me this modus operandi looked suspiciously like Nanavac was being used for money laundering purposes, since it was unclear where the cash was coming from and where it would go after being entered into the books of the company. What is clear though is that is that the money was not from any sales of the company. The records show that some US$ 23 million was processed through the shops in this way.

Money laundering

Mphoko claims that large amounts of money were paid out to some suppliers “which suppliers appeared to supply nothing to Nanavac. For Example I had established that a company called Pratosh was listed as a foreign supplier but none of staff members dealing with payments to this supposedly foreign company which was almost on a daily basis being paid in cash, knew what this company was supplying. No one had even seen the supply agreement this company has nor had ever seen any goods supplied by it (sic). Even though said to be a foreign company, Pratosh was stated in some documentation as having a Bulawayo address which appeared to be fake because people found at the address appeared to be unaware that such company was operating from that address. In his report to the Police anti-Corruption Unit, Mphoko stated that, “As an executive Director I do have full knowledge of the company business on daily basis such that I am privileged on daily takings of all branches we have nationwide. When the business is at its peak we normally have sales of between US$3000-0 to US$22500-00 daily from our branches hence a total of 35 branches we would receive about US$320 000 -00 daily. I recall about three months ago when I was informed by some of my accounts department employees … that there were some suspicious huge sums of money which are being deposited in cash within the company accounts department of which the origins of such huge amounts of cash are not known. The deposits or amounts vary from US$ 70 000-00 to US$590 000-00 in bond notes at least 4(four) to 5 (five) times every month or they can just skip a month. These amounts of money being deposited do not tally with the company sales as they are way above the company daily sales.”

Mphoko stated that after deposits are made the Account Manager Binish V would then send emails to various branches nationwide instructing them to release huge sums of money to Pratosh Investments Private Limited allegedly for payment of supplies of fruit and vegetables. According to my knowledge Pratosh Investment does not exist even at the Registrar of Companies or the given Physical address supplied. Mphoko stated that he suspects the company was being used “as a conduit to cleanse the ill gotten cash.”

Money trail Botswana connection

Sunday Standard investigations have accessed e-mail communication between Choppies managers on the transfers of cash to Pratosh Investment suggesting that Pratosh Investments may have links to Choppies Botswana. In one of the e-mail messages one Mithun Chulliparambil with a Choppies Botswana email wrote to Choppies Zimbabwe managers that “Please find the remittance for the invoices provided for Pratosh Investments... Total Remittance excluding Inv 005 and considering Debit notes (for price over charge) amount is USD 78,159.73. Please get the cash arranged accordingly. Binish, you may communicate regarding the cash collection upon getting the ID and other details.”

On March 28, 2018, at 4:35 pm one Vansanthan from Choppies Zimbabwe wrote to cashiers that “Please release another $20 000 to Pratosh Investments and on the same day at around 10:56 AM, he informed cashiers that “Please release another $10 000 to Pratosh Investments.”

In another email dated March 28, 2018 at 8:35 Am Vasanthan states that ‘please release another $10 000 to Pratosh Investments and on March 27, 2017 Vasanthan also stated that “please release $17 000 to Pratosh Investments. Mr. Athul will collect same for giving to them.”

Another Email dated March 15, 2017 from one Anelo Ndlovu titled ‘Pratosh Investments Cash Payment;’ she states that “$10 0000 is ready from Chitungwiza and $ 15 000 is also ready from Robert Mugabe. Both payments are fully arranged in bonds.”  

March 01, 2017 time (:27 AM, in an email addressed to cash officers/managers,  a certain Sydney Ishumael wrote that “Following our telephone conversation a few minutes, kindly note that your cash payment allocation for Pratosh Investments has been revised downwards to $9,159.73 from $10 000.00. You are may proceed and arrange the remaining balance in bond notes only.” Asked to comment on the allegations, Choppies Enterprise Limited Group Chief Executive Officer Ramachandran Ottapathu said he was unaware of any criminal investigations being conducted by the Zimbabwean authorities on alleged money laundering claims.

He would not disclose the identity of Pratosh Investments Private Limited directors which is implicated in the money laundering claims.  He also declined to discuss the allegations implicating account manager, Mohan and operations manager Vasanthan among others in the money laundering claims.

According to the leaked emails passed to the Sunday Standard another company that has been receiving cash transfers is Project Expenses Parkslands. Mphoko had claimed in his affidavit that the apparently laundered money would then be removed from the shops without being banked and “parked” in the accounting books as having being set aside for projects.” The leaked e-mail messages reveal that on 3rd April 2018, Binish Vasanthan instructed cash officers to release “another $40 000 towards Project Expenses.” On March 30, 2018, at 3:47 PM, Vasanthan also informed cash officer to “Please release another “$60 000, towards Project Expenses Parkslands.” Still on 30 March 2018, at 4:53 PM, Binish Vasanthan issued another email to cash officer instructing them to “Please release another $30 000 towards Project Expenses Parklands.” Yet on the same day at around 3:53 PM Vasanthan instructed the cash officer “to release “$20 000 towards Project Expenses Parklands.” He on another email dated March 29, 2018, 4:42 pm instructed the cash officers to “release another $30 000 towards Project Expenses Parklands”.

Choppies dirty deal

The Choppies Zimbabwe controversy first spilled into the open two months ago when it emerged that Former President Festus Mogae, former President of Zimbabwe Robert Mugabe and former vice President of Zimbabwe, Phelekezela Mphoko entered into a shady agreement to help Choppies bypass provisions of Indigenisation Act which required locals to own 51 percent of businesses. Mogae alleged that Mphoko was used as a front to evade provisions of the Indigenisation Act and was given only 7 (seven) percent of the shares for this role and not the 51 percent which he is now claiming. A letter written by Mogae to Mphoko which was quoted by the Zimbabwe Independent reads,

“My brother, I would like to bring the following facts to our attention: We entered into this partnership with a clear understanding of the shareholding of 93% shares to Choppies Enterprises and 7% to the Mphoko family, free of charge. We signed agreements based on this and even the office of the former president (Robert Mugabe) has got these agreements.

You are well aware that I had access to former president, RG Mugabe and I did clear this with him in the presence of former foreign minister (honourable) Simbarashe S Mumbengegwi. I have the same access to the current president as I had with the previous one.”

Mogae was quoted by the Zimbabwe Independent saying, “That letter was written when we realised there was something impossible that had been happening for some time and we needed to regularise that, which is the issue of Choppies’ shareholding in Zimbabwe. We would love to continue operating in Zimbabwe, but we need to have things in order in the correct manner.”

Mphoko however dismissed Mogae’s claims saying that people wanted to advantage of the fact that he was no longer a part of the government.  He insisted that he still owns 51 percent of the supermarket chain and said that he has the documentation to back him.

Mphoko was Zimbabwe’s ambassador to Botswana during Mogae’s term as president. There have been complaints in Zimbabwe that Mphoko may have abused his position as ambassador in Botswana moonlighting to cut deals for himself and his family.