Friday, September 24, 2021

Choppies not out of the woods yet

Choppies supermarket and its former auditors are reeling from fresh financial and accounting irregularities as they face sanctions from the Botswana Accountancy Oversight Authority (BAOA).This follows a newly released report by the Authority which allegedly unearthed financial mismanagement and lack of oversight at the company by its management and former auditors.The decision by BAOA to launch an investigation into Choppies affairs follows delayed financial statements in 2018 that resulted in the chain store being suspended from the Botswana Stock Exchange (BSE) and Johannesburg Stock Exchange (BSE).Both BSE and JSE have since lifted the suspension.But it appears the regional grocery store which has since closed operations in some countries in the region is not off the hook yet. BAOA believes that it has a strong case against Choppies and its auditors.

Responding to Sunday Standard enquiries, BAOA public relations officer Oupa Gaofise confirmed that the investigation conducted by the Authority against Choppies and its former auditors has been completed. The reviews relating to Choppies, the entity, and the affected Auditors have been completed, reviewed by the relevant committees, and approved by the Board. Said Gaofise: “The report found that there were significant findings on breach of the Financial Reporting Act, 2010.” “The Authority is currently conducting hearings against Choppies and the affected Auditors, scheduled to conclude on 30th November 2020, whereat the Respondent will be asked to prove why they cannot be charged for amongst other things, professional misconduct, and if found guilty, appropriate sanctions will be levied,” said Gaofise.

He would not be drawn into discussing further details and referred this publication to Choppies. But he confirmed that Choppies has been served with a copy of the report.

The retailer had not responded to Sunday Standard queries at the time of going to press. But responding to a telephonic interview its chief executive officer Ottapathu Ramachandran claimed ignorance of the report.

“I’m not aware of any report or such a report,” he said briefly. This publication sought to know if the company was served with a copy of the report by BAOA and what its reaction to the report was.Reports indicate that the supermarket is struggling to recover from accounting and legal scandals related to its stocktaking at its South African based stores at the time as well as its Zimbabwean business.

Reports also indicate that an investigation by an EY forensic team has also unearthed accounting irregularities at the company. Recently auditors Pricewatercoopers entered a plea to defend a P450 million lawsuit by founders, Ramachandran and Ismael Farouk who jointly blame the auditing firm for the lapses which resulted a share price collapse as they allegedly failed to sign off the company’s 2018 accounts.

Some of Choppies former auditors in Pricewatercoopers and KPMG had not responded to Sunday Standard enquiries at the time of going to press. Sunday Standard sought to know among others from the auditing firms whether they had been summoned by to appear before BAOA ongoing hearings.

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