Thursday, February 22, 2024

Choppies Audit and risk committee Chairperson quits


Troubled local retailer ÔÇô Choppies Enterprises has confirmed the departure of Robert Matthews – a director of the Company and Chairman of its Audit and Risk Committee.

Matthews is said to have tendered his resignation from both posts, with immediate effect.

“Mr. Matthews had intended resigning from the Board on 31 March 2019, a decision he had conveyed to the Board on 18 November 2018. However, his unavailability over the course of the remainder of this month (February 2019) and much of next month (March 2019) for reasons relating, in part, to out of country travel, has brought forward his resignation date”, Choppies said in capital markets cautionary statement released this week.

Meanwhile Wilfred Mpai who recently joined the Choppies board as a director is said to have assumed the chairmanship of the Audit and Risk Committee immediately.

The resignation of Matthews comes at a time when Choppies shareholders and the markets still await the publishing of the company’s 2018 financial results.

As a result of the failure to publish results, Choppies has since been suspended from trading its securities at both BSEL where it has a primary listing and at the Johannesburg Stock Exchange where it has its secondary listing.

The Choppies stock suspension at BSEL which is going into its fifth month now has resulted in a market value loss from P2.2 billion to P521.5 million. The company share price plummeted 76.3 percent, from P1.69 to P0.60 at the time of suspension last year.

Last week the company through its sponsoring broker African Alliance released a cautionary statement stating that it is still progressing with the reconciliation of books before the release of the financials. The company did not give any date for the release of the much anticipated results.

In September 2018 ÔÇô the time when the delay was first made public, the Ramachandran Ottapathu led grocer said the delay in publication of results is due to an audit for the year ended June 2018. The grocer appointed a new auditor in early 2018 after parting ways with KPMG, its long time auditor. At the time, Choppies said that the board and auditors have been working together to reassess the past accounting practices and policies.

“The reassessments currently being undertaken relate to historical purchase price allocations on business acquisitions, depreciation and amortization accounting, valuation of inventory and impairment assessments of property, plant and equipment, intangible assets and deferred tax assets,” the company said in September 2018.

Still at the time, Choppies explained that the reassessments are complex by nature, requiring careful analysis in order to determine the impact on prior and current periods. Furthermore, the retailer says its board of directors and its new auditors, PricewaterhouseCoopers (PWC), have uncovered number of matters relating to the current and earlier financial periods, which require independent verification and expert legal analysis before disclosures can be made.

“Certain transactions and business relationships hitherto were not made fully apparent and were therefore not sufficiently considered in preparation of historical annual financial statements,” read part of the September 2018 cautionary statement. The transactions and relationships referred to include certain business acquisition transactions undertaken by South African subsidiary during the 2017 and 2018 financial years. Also part of the scrutiny is the ramifications of the “well published shareholder dispute in Zimbabwe.”

Choppies went on to say that while these independent verifications and expert legal analyses have been initiated, their completion date and outcomes cannot be determined with any reasonable certainty at this stage, hence impacting the finalization of the company’s audited financial results, which are now over five months behind schedule.


Read this week's paper