Botswana’s biggest grocer Choppies Enterprises is slowly clawing its way up, but shareholders remain divided while the company founders have increased their stake, showing confidence in the company’s stock.
Choppies recently convened its long overdue extraordinary general meeting (EGM) for 2018 and 2019. The meetings, which were hosted online, where held for the first time since the company was embroiled in a corporate scandal that quickly spiralled in 2018, resulting in Choppies shares suspended from trading on the Botswana and Johannesburg stock exchanges. The share price has shed over 80 percent of its value in the past two years.
At the recent EGMs, shareholders were divided over the adoption of the retailer’s audited financials for 2018 and 2019, which have reflected millions of losses. Choppies reported a loss of P428.6 million for the year ended June 2019, which was slightly below the P444 million loss realised in June 2018.
While most resolutions passed with 82 percent votes in favour, the adoption of the financial results caused a stir, and only passed with 53.4 percent in favour while 46.5 percent voted against accepting the financials that were at the core of the corporate scandal which erupted when Choppies former auditors refused to sign off the audited statements and declined to offer an audit opinion, casting doubts on the authenticity of financial records.
Meanwhile, Choppies co-founders Ramachandran Ottapathu and Farouk Ismail, who are also the company’s two single biggest shareholders, on Friday increased their stake in the retailer, each buying 5 million shares at the current price of 60 thebe per share. Ottapathu owns 19 percent of Choppies while Ismail’s stake is 15 percent. The share price did not respond to their latest transaction, with the share price still at its record lows after it fell by 13 percent after the trading suspension was lifted in late July.