Sunday, September 27, 2020

Choppies who is fooling who

In a curious turn of events, Vice Chairperson of troubled Choppies Enterprises Farouk Ismail, Gaborone High Court Judge Zein Kebonang and businessman Moitsheki ‘Checks’ Lekalake went to Zimbabwe last week to meet the Mphoko family behind the back of other Choppies Directors.

Sunday Standard has turned up information showing that Ismail who is deputizing Chairman former President Festus Mogae led the three-man delegation to Zimbabwe in an effort to broker peace between the retail giant and its Choppies Zimbabwe partners led by former Zimbabwe Vice President Phelekezela Mphoko.

Curiously, the trio’s Zimbabwe mission had not been sanctioned by Chairperson Festus Mogae, Group CEORamachandran Ottapathu and the Choppies board.

Mogae and Ottapathu have been at the forefront of the boardroom brawl against the Mphoko family.

Sunday Standard can also reveal that the delegation was in Zimbabwe nine days before the Botswana Stock Exchange (BSE) and Johannesburg Stock Exchange (JSE) suspended the supermarket chain from trading shares after it failed to submit its audited financial results.

This comes on the heels of announcement on 24th October by Choppies Enterprises that non-executive director Sydney Alan Muller has quit with immediate effect.

Information passed to Sunday Standard also show that Choppies Chief Financial Officer and Executive Director Sanooj Pullarote is leaving the company. In a brief interview, Pullarote confirmed to this publication that he was serving a three month notice to quit the troubled company. 

The Mphoko family’s lawyer Welshman Ncube confirmed that “yes Mr Farouk came here accompanied by two gentlemen.”

Asked what the purpose of their visit was, Ncube said “essentially they were apologising for the improper treatment that the Mphokos had been subjected to; the unnecessary litigation that had been put… criminal charges that had been reported and basically asking if it was possible for that apology to be accepted and let bygones be bygones.”

Mphoko’s son Siqokoqela, who is a shareholder in the retail business and a non executive director, is accused of abusing his power to “loot” cash realised from sales at different supermarkets and replacing it with transfers while his wife Nomagugu is facing extortion charges. The couple has since denied the allegations describing them as trumped up charges.

Ncube who is representing the couple added that the Farouk led delegation proposed that the “shareholders and directors disputes could be resolved amicably. So then Mphokos then said they had no difficulty accepting the apology and there can be dialogue with a view to resolve the shareholders and directors dispute that exist.”

The Company’s whose primary listing is on the BSE and its secondary listing on the JSE is currently embroiled in a bitter shareholders dispute and legal battles with their partners in Choppies Zimbabwe. The dispute has been cited by the retail giant as one of the key issues that delayed publication of the audited financial statement for the year ended 30 June 2018. The company also stated that the delay in publishing its results was due to its new auditors’ reassessment of the company’s balance sheet.

The local burse said in a statement on Thursday that trading in the shares of Choppies Enterprises remains suspended after the company missed a deadline to publish its financial results.

“The trading of the Choppies securities will remain suspended until the company complies with the Stock Exchange listings rules or until further notice,” BSE said.

In a statement this week Choppies advised its shareholders that it was still not able to determine when it would be in position to issue financial statements for the year ended June. Reports indicate that shares in Choppies have dropped more than 70 percent so far this year compared with a 10 percent decline for the BSE.

Reports show that the new external auditors Price Water Coopers are reassessing the company’s past accounting practices and policies including valuation of inventory, impairments on property, plant equipment and the value of acquisitions by its South African subsidiary.

Contacted for a comment, Kebonang promised to “call you back in a minute” but had not done so at the time of going to press.

Lekalake was not readily available for comment.  WhatsApp messages to him and the WhatsApp ‘blue ticks’ feature showed that he had read them but still did not respond.   Sunday Standard wanted to establish among others the outcome of the meeting and on what capacity did he attend the meeting.

Choppies website shows that Farouk is the founder of the Ismail Group of Companies which is now known as Choppies Enterprises. According to the website, he opened the first store in Wayside, Lobatse in 1986 and has witnessed the exponential growth of the group since.

It states that “Given his presence in the Choppies Group since its inception, he has a strong understanding of the target market of Choppies and how to address market requirements.” 

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Sunday Standard September 27 – 3 October

Digital copy of Sunday Standard issue of September 27 - 3 October, 2020.