Monday, July 15, 2024

Choppies finally buys out the Mphoko’s

The long-awaited details of how former Vice President of Zimbabwe Phelekezela Mphoko and his son Siqokoqela Mphoko exited from embattled Choppies Enterprises have finally been made public.

In a notice to shareholders, Choppies revealed that it has paid the Mphokos US$2, 9 million (about P31 million) to buy their shares in Choppies Supermarket Zimbabwe. 

Choppies and the Mphokos agreed to settle all the disputes between them. The company said prior to completion of the transaction(purchase of shares from Mphokos), Choppies held 93% of the economic interest and 49% of the equity in Nanavac Investments while the Mphokos held a 7% economic interest and 51% of the equity.

Economic interest refers to one’s share of the company’s profits, losses and distributions.

“Following completion of the Nanavac Transaction, Choppies now holds 100% of the economic interest and equity in Nanavac Investments (Choppies Zimbabwe),” said Choppies.

According to Choppies, “In accordance with section 7.6(b) of the Botswana Stock Exchange Limited (“BSEL”) Equity Listings Requirements (the “Listings Requirements”) the audit committee of the Company (the “Audit Committee”) has reviewed the terms of the Nanavac Transaction and has determined that the terms of the Nanavac Transaction were fair as far as the shareholders of the Company were concerned.”   

Mphoko was last year locked in a bruising fight for the control of Choppies Zimbabwe after he was removed as Vice President in November 2017 following a military coup. In January this year the company issued a statement declaring that the dispute was resolved amicably. But it the dispute has branched off into another controversy recently with the Mogae led board suspending the company’s Chief Executive Officer Ramachandran Ottapathu.
in another statement to shareholders, Choppies accused Ottapathu of attempting to convene a meeting behind its back.

“The Board has been made aware that a document purporting to be a draft notice of an extraordinary general meeting (“EGM”) of shareholders of the Company (“EGM Notice”) has apparently been sent by Mr. Ottapathu (or on his behalf) in his capacity as a shareholder to select shareholders,” the company said.

Choppies advised shareholders that it has not authorised the issuance or circulation of any such EGM Notice.

“Whilst Mr. Ottapathu is entitled to requisition an EGM subject to meeting the requirements of the Companies Act, formal and proper notice of such an EGM must come from the Board, which is itself considering various options available to it to disseminate further information at the earliest possible opportunity to shareholders, including at an EGM called by the Board of its own volition,” the company said.

The company also defended its decision to have suspended its CEO.  “The Board advises shareholders that (i) the suspension was and is valid and proper; (ii) the Suspended CEO’s rights and entitlements under Botswana law have not been infringed and remain protected as would those of any employee of the Company,” the company said.

Choppies said as the suspended CEO remains an employee of the company during the period of his suspension, such rights and entitlements do not extend to unauthorised disclosures by him of confident information relating to the Board and the Company (which may in and of themselves form the basis of disciplinary proceedings against him).


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