Thursday, July 9, 2020

Festus Mogae’s foray into the business world has been a royal mess

Former president, Festus Mogae’s frolic into the business world has been a real hell of a show.

That show has been an embarrassment – presumably also to his family, but certainly to the nation.

For those who still look up to him as a statesman, the former president’s behavior has been agonizingly short of statesmanship.

Watching his most antics at Choppies where he created a façade that he was cleaning up and introducing good corporate governance, the circus would be laughable were it not for the tragedy it really is – at stake are the billions in pensioners money.

Mogae’s actions have created a neuralgia among his admirers in government who had hoped to strongly rest on him in their fight against Ian Khama – yet another wayward former president currently locked in a bitter fight with the state.

A Choppies Chief Executive Officer popularly known only as Ram, who Mogae recently tried and failed to topple has publicly said Mogae is an old man who slept through board meetings, was perennially absent, added no value and was totally clueless on business.

However way one looks at it, this is a real insult. Not only to Mogae but to multitudes of Batswana who still revere him.

Do we really need our former presidents to behave in the manner that Mogae did? Was becoming Choppies Chairman worth the humiliation he is now suffering when he is almost at the end of what has been an otherwise remarkable life?

By joining Choppies, clearly to make money, Mogae effectively became a figure head and public face of a buccaneering corporate governance culture that relied more on political connections than on performance.

When he became Choppies Chairman he also became the public face a footloose, cowboy corporate governance culture that thrived and ultimately fell on cutting corners.

The sad and unspoken thing is that by his decision to sell his services to big business Mogae has irreparably broken the trammeling power that had all along tied his predecessor Sir Ketumile Masire to a pole. After Mogae now everything goes.

Even a great man has not been above a certain level of venality.

Mogae’s legacy has hitherto been his tireless crusade against HIV/AIDS.

His continuing infamy at Choppies is set to replace his fight against HIV/AIDS as an enduring legacy.

Presidential historians will one day look back at the day Mogae started to consort with Choppies and agree it was the same day that relations between government and a former president started to get complicated, hazy and even frayed.

Today we talk about Ian Khama’s acerbic relations with the state. There is a forerunner to it all. It actually started much earlier, when in the twilight of his presidency Mogae agreed to become Chairman of Choppies.

As a result of Mogae’s decision to join Choppies, governance issues in Botswana are today worse off and much more complicated than many, especially those sympathetic to him are willing to concede.

It was by no measure a coincidence that Mogae was approached by Choppies.

In fact there is no evidence to suggest that there has been any cooling period between Mogae leaving government and the time he joined Choppies.

By enticing Mogae to join them, Choppies executives knew exactly what they were doing. He is too brilliant not to have seen the inherent redflags and pitfalls.

But he evaluated and weighed those risks against potential benefits due to him, if he joined.

And so he joined.

Personal fealty was the most overriding consideration for him.

As (former) president, Mogae had a lot of political capital that Choppies needed – at home and abroad especially as its model expanded into the sub-region.

Choppies approached him so that he would henceforth become their door-opener, with executives always on tow, not too far behind.

And indeed he proved an effective door opener – in South Africa, Mozambique, Zambia, Kenya, Namibia and Zimbabwe where Choppies subsequently opened and operated though to varying degrees of success.

The only trouble is that every door that Mogae opened, Choppies got further exposed to toxic political pressures, reaching its climax in Zimbabwe where things got very nasty for the chain store culminating in a failure to release financials for well over a year.

In the end, Choppies paid a heavy price for its political exposure. It will be a long time before they fully clean out the contaminating effects on their brand.

Today Choppies is busy trying to re-invent itself. It is a mammoth task. We wish them the best of luck. They have had to learn a hard way.

For the record Mogae has always had a hefty pension. The state takes care of his accommodation, his security and travel – 24 hours. And on top of that Mogae has been a recipient of an extravagant largesse from Mo Ibrahim – a Sudanese billionaire who a few years back created a questionable annual beauty contest for African presidents of which Mogae has been one of the winners.

Why with so much disposable income did Mogae still feel he needed to make money off Choppies.

The only plausible answer can be “greed.”

Close watchers are saying Mogae’s dealings with Choppies are part of reasons why his deputy in government was able to blackmail him for so long. In the end on account of such clumsy deals, it was Ian Khama who became a defacto Head of State during Mogae’s tenure.

Make no mistake, Choppies has been extremely kind and overly generous to Festus Mogae.

He has made a real fortune from Choppies sharers for which he had himself paid very little or pretty much nothing to start with.

When Choppies was still private he made millions in bonuses and dividends.

And when Choppies went public, him, Ram and Farouk Ismail made millions upon millions with sale of their shares to such organisations like BPOPF (Botswana Public Officers Pension Fund).

Now Mogae says he wants out. He wants a clean break from Choppies. He no longer wants to be associated with the stench. That’s hypocrisy!

Under Mogae, Choppies has had a sordid governance history.

The ill feeling created by him and his Choppies friends has been palpable.

Once the country’s biggest privately-run company, today Choppies is struggling to survive.

Batswana never really fell in love with Choppies. The chain store was never really popular, certainly never revered.  At its peak, it was easily among the country’s largest companies. But nobody counted it among national flagbearers. Customers always viewed it as a monster – not entirely without justification. Whatever veneration there might have been, it was always bestowed grudgingly.

Rather than try a holler-than-thou stunt that will not fly, Mogae as part of his repentance should state how much shares he owns today at Choppies, if any, vis-à-vis at the height of his holding prior to listing. More importantly he should state how much he paid for them when he entered Choppies when the business was still private.

In simpler terms he must also state how much money he made from Choppies listing.

To now turn around after a fallout with real owners and claim that Choppies is a cesspool of corruption is a none starter – but also terribly disingenuous of the former Head of State.


Read this week's paper

Sunday Standard July 5 – 11

Digital copy of Sunday Standard issue of July 5 - 11, 2020.