The fight for the control of a subsidiary of local retailer – Choppies Enterprises in Zimbabwe continues to make headlines news in that country as war between former business partners, now turned foes continue to turn ugly.
In the latest twist, Choppies Enterprise CEO Ramachandran Ottapathu and his Botswana business partners are said to be demanding that the family of former Zimbabwean vice President Phelekezela Mphoko through their company ÔÇô Nanavac Investment is said to have been demanded to pay atleast $94 million for them to take control of Choppies Zimbabwe.
In a letter dated 20 October 2018, Ram is said to have given Mphoko and his family to pay up to $94 million as part of the earnings before interest, tax depreciation and amortisation.
Mphoko has however maintained their stand ÔÇô insisting that Choppies chairman ÔÇô Festus Mogae and Ottapathu, Choppies CEO ÔÇô Ram are trying to take advantage of his situation after he was removed from government where he served as Mugabe’s vice president.
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 The law was repealed under Emmerson Mnangagwa who deposed long time ruler Robert Mugabe.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.