Mogae uncomfortable with dirty details of Choppies deal in Zimbabwe

07 Oct 2018

Former President Festus Mogae wanted details of the shareholding dispute between Choppies Enterprises and Choppies Zimbabwe owned by former Zimbabwe Vice President Phelekezela Mphoko away from the public eyes.

From the confidential documents passed to the Sunday Standard, it is not clear if Mogae was uncomfortable with the dirty details of the deal or its possible effect on the Choppies stock.  

The dispute has been cited by the retail giant as one of the key issues that delayed publication of the audited financial statement for the year ended 30 June 2018.

Recently Choppies was suspended by Botswana Stock Exchange (BSE) and Johannesburg Stock Exchange (JSE) after it failed to publish its latest audited financial results.

A letter dated 1st June 2018 addressed to Mphoko and his son Siqokoqela also shows for the first time how much Mogae has invested in Choppies.

Mogae informed Mphoko and his son that “we do not intend to take this matter to the public domain, at the same time we cannot be unfairly disadvantaged due to the non cooperation from your side.” 

By ‘non cooperation from your side,’ Mogae was referring to Mphoko family’s reluctance to sign a document which states that they only own seven percent in Choppies Zimbabwe.

“I had discussion on the issue of regularization of the shareholding in Zimbabwe with the Chief Executive Officer (Ramachandran Ottapathu also known as Ram) and his team. He confirmed that you were waiting for the document for signature,” he said.

Mogae added that “Contrary to what Siqo (Mphoko’s son) told Ram, I am told that you have not yet signed the document and instead you were trying to terminate the services of the person who was genuinely taking instructions from the company.”

Mogae who is also the Chairman of the Choppies Group also stated that “as a local partner, your family got the best deal from the whole Group (Choppies). Your family is actually getting much more salary than what the Group Chairman is earning.”

For the first time Mogae revealed that “I paid P15, 000, 000-00 (Fifteen Million for my shares. I expect you to appreciate this and show respect to our agreement and long lasting relationship.”

By our agreement, Mogae was referring to the alleged elaborated plan to enter “into this partnership with a clear understanding of the shareholding of 93% shares to Choppies Enterprises Ltd and 7% to the Mphoko family, free of charge. We signed agreements based on this even the former President’s Office has got copies of these agreements.”

Mogae concluded that “this issue needs to be resolved at the earliest possible time and I request you to show respect and good faith we displayed so far. I look forward to receiving a timely reply.”

The Mphoko family however did not honour Mogae’s request.

Mogae’s Private Secretary Rhee Hetanang confirmed receipt of detailed questions but failed to respond insisting that “HE Festus Mogae is presently abroad on a mission, and therefore constrained to address the media, and in particular, the specific issues you have raised.”  

 

Mphoko on the other hand told Sunday Standard that “I still don't believe that former President Mogae wrote that letter.”

Mphoko said, “The letter does not reflect any form of respect or Ubuntu from an African perspective.”

He said he did not reply to Mogae’s letter “simple because I thought that former President Mogae did not write that letter. He could not support the reservation policies in Botswana, and at the same time undermine the same policies in Zimbabwe.”

Mphoko said “on 22 May 2018, Ramachandran Ottapathu (CEO of Choppies Group), telephoned me, after I had refused to sign a document which was giving us the Mphoko family 7% in a partnership between Nanavac Investments (PVT) T/A Choppies Zimbabwe, and 93% for Choppies Enterprises Limited.”

The Mphoko family also denied that the shares were free as they had acquired a loan agreement which shows that Nanavac borrowed $20 million from Choppies that would be paid on "revenue from the trading activity" for a period of six months.

Mphoko said that Ottapathu also known as Ram in business circles informed him that he was told by President Emmerson Mnangagwa, when he visited Botswana, that he has scrapped the Indigenization and Economic Empowerment Act.

“Therefore, there was need to review the Shareholdings between Nanavac Investments (PVT ) Limited T/A Choppies Zimbabwe, and Choppies Enterprises Limited. My response, to Ramachandran Ottapathu, was through an Email and explained that the Shareholding was 51% for Nanavac and 49% for Choppies Enterprises,” said Mphoko.

He said “however I informed Mr.  Ottapathu that the Indigenisation and Economic Empowerment Programme, is an Act of Parliament in Zimbabwe, signed into law by a Head of State, whose main aim is to empower indigenous  Zimbabweans or any person who before the 18th April 1980, was disadvantaged by unfair discrimination on the grounds of his or her race and any descendant of such person, and includes any Company, Association, Syndicate or Partnership of which indigenous Zimbabweans form the majority of the members or hold the controlling interest.”

He said this is an ongoing Government programme which demands support and promotion by all Government Ministries, Companies and Institutions.

Mphoko said “Ramachandran Ottapathu refers to the Indigenisation and Economic Empowerment Programme as a stupid law of Mugabe, and former President Mogae, expects me, as being a former Vice President of the Republic of Zimbabwe, an enforcer of Zimbabwean laws, to undermine, Zimbabwean laws, and become a front for a foreign company with 7% shares and 93% shares for a foreign company in a reserved sector.”