The independence of the newly elected board of directors of Choppies Enterprise will be put to test on its early days as the BSEL quoted company prepares to find its feet back.
The new board is already at a critical juncture – wedged between the suspended and founding CEO – Ramachandran Ottapathu – a larger-than-life figure and their larger responsibility to the existing shareholders.
Even before the new board hold its first meeting, some shareholders, mainly institutional investors have made their demands known. They want the suspended CEO to be clamped down and explain the serious misconduct pointed out by the legal and forensic reports presented at the company’s Extra Ordinary General Meeting (EGM) held in the capital Gaborone on September 2019.
Choppies shareholders who attended the September 4 EGM were given a high level overview of the financials as well as the legal and forensic reports and each report pointed to serious misconduct on the part of Ram.
Soon after the board nominations and elections, atleast two institutional investors publicly expressed concern and dissatisfactory about the composition of the new board of directors.
The shareholders in attendance and some through proxy re-appointed the Choppies acting CEO Farouk Ismail, suspended CEO – Ram, Tom Pritchard as well as Carol Jean Haward to the board.
Commenting on behalf of Botswana Public Officers Pension Fund (BPOPF), it’s Chief Executive Officer – Boitumelo Johnson described the outcome of the EGM as a “shock”.
“As investors we expect the new board to test the allegations in a transparent manner,” said Johnson.
Johnson further stated that the fact that the suspended CEO is part of the new board does not give her much confidence.
Johnson said further said that the minorities still have rights and should expect the highest order of governance from a public company that they invested in.
“The process that transpired can be challenged just like any election. This is the financial services sector in Botswana and history will judge us if will allow these kind of transgressions to take place,” said Johnson.
Johnson made it clear that as investors they want Ram’s disciplinary to go on as reports presented before the shareholders were factual and needed to be exposed.
“We want the CEO to go through a proper inquiry assembled by independent people who are not chosen by him. On behalf of my members let us keep to the core values,” said Johnson.
Another commentary and request came from BIFM CEO – Neo Bogatsu who requested that the Choppies new board should follow through the findings of the investigations for the sake of institutional investors.
“There has been in my view loss of trust in the way that the company has been managed over the last 10 or 15 years or at the time it listed at Botswana Stock Exchange,” said Bogatsu.
Bogatsu stated that the concerns raised regarding Choppies Enterprises Limited’s operations in Zimbabwe, South Africa and Botswana are very serious.
“When we talked about the EGM being adjourned to the 16th October, 46 percent of shareholders said no and 53 percent said yes and we respect that process. The reality is that 46 percent is not a small number and we should take that into consideration,” said Bogatsu.
Meanwhile the call to discipline Ram is likely to be a complex one for the new board as some of them seems to be personally close to retail mastermind. Infact some, if not all of them were nominated by Ram who remains a director and Choppies’s single largest shareholder.