Tuesday, October 20, 2020

Choppies Zimbabwe in court but…..

By Bonnie Modiakgotla

Botswana’s leading grocer Choppies which has been dogged by negative publicity for much of this year is facing yet other fresh charges from Zimbabwe, where it stands accused of a toxic work environment.

Choppies Zimbabwe employees have decried unpleasant working conditions were sexual harassment is rife, in addition to unfair dismissals, low pay and racial attacks where some black employees are allegedly called baboons by their managers of Indian origin, according to reports carried by Zimbabwe media houses.

Faced with the deteriorating work conditions, the employees through unions reached out to Phelekezela Mphoko and his son Siqokoqela Mphoko – who since Choppies entered Zimbabwe in 2013 were paraded as the majority shareholders of the grocer. The Mphokos are reported to have met the employees at the company’s headquarters to hear their grievances, a development that attracted the wrath of the group’s top management based in Botswana.

“Kindly note that Mr P Mphoko and Mr S Mphoko do not have a financial or operational say in the business of Nanavac. We strongly request that all employees desist from dealing with the above-mentioned persons with immediate effect,” Ramachandran Ottapathu, Choppies Enterprises CEO hit back in the terse statement.

“Any action taken as a result from the above-mentioned persons will be contrary to the company rules and procedures and disciplinary action will be taken against the responsible employee (s).”

Choppies Enterprises, an investment holding company for Choppies subsidiaries is entangled in a fight with Mphokos over the shareholding structure in Zimbabwe. Choppies entered the Zimbabwe market in 2013 in a partnership with the Mphoko family though an investment vehicle called Nanavac Investments Private Limited, in which the company registration records show that Mphoko owns 51 percent while Choppies Enterprises had a 49 percent stake. 

The shareholding arrangement at the time was to satisfy the Indigenization Act which prevent foreigners from owning more than 49 percent shareholding in local businesses. The law was repealed under Emmerson Mnangagwa who deposed long time ruler Robert Mugabe. But behind the scenes, Choppies had entered in a deal with the Mphokos in which Choppies owns controls 93 percent of economic interest in Nanavac while the Mphokos had only 7 percent.

Details of the fallout between Choppies and Mphoko were made public late June when former president of Botswana Festus Mogae in his capacity as chairman of Choppies Enterprises wrote to Mphoko not to resist the company’s new intentions to change the registered shareholder structure that would now see Choppies officially owning the majority shares. 

For his part, Mphoko refused to accede to Choppies request that he give up his controlling stake. Instead he accused Mogae and Ottapathu, Choppies CEO, of trying to take advantage of his situation after he was removed from government where he served as Mugabe’s vice president. 

Ottapathu’s strong worded memo to employees warning them against engaging the Mphokos has attracted a tide of criticism. Mphoko’s lawyer, Welshman Ncube, told Zimbabwe media Choppies CEO was offside in saying the ex-VP had no financial or operational say in the running of the business.

“He has no right to write a letter like that as his claim that they have exclusive rights in managing the business is still pending at the High Court. They applied for exclusive rights and we opposed it,” Ncube said. “he is trying to execute an order that has not been given.”

Zwelithini Malinga, Choppies National Workers’ committee chairman, hit back at Ottapathu; “Your email does not address the bread and butter hostile issues that workers have been subjected to from unprofessional Indian managers. In our view, your email also threatens the workers just like the managers.”

The workers also received support from Commercial Workers’ Union of Zimbabwe, which released a statement of its own: “We will not, as a trade union, tolerate that behaviour. The employees have a right to approach the Mphokos until the ownership dispute is resolved. The action by the workers’ committee to approach the Mphokos is correct since they are also the directors of the business as things stand.”

Choppies Enterprises which is listed on the Botswana Stock Exchange and Johannesburg Stock Exchange is currently suspended for failing to publish audited financial results within the stipulated period. The company is yet to release the results due to an ongoing massive audit.

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The Telegraph October 21

Digital edition of The Telegraph, October 21, 2020.