Farouk Ismail, one of the majority shareholders in Choppies Limited has changed his role at the leading fast consumer goods group of companies, from executive to non-executive director.
Although the board of the group has confirmed the latest development, little has been said about the reason behind the change.
In a short statement released to capital markets, Choppies Group noted: “As per the terms engaged with the board, and with effect from April 1, 2017, Mr Farouk Ismail’s role on the board has changed from an executive director to a non-executive director and vice chairman.”
The latest development comes hardly three years after Farouk reduced his stake in the giant retail company in a transaction done in December 2013 under the legal watch of the then Collins Newman Law firm.
The off-market transaction held in December 2013 resulted in the transfer of 150 000 000 ordinary shares, representing 12.77 percent of issued shares between Ismail and a subsidiary of one of the world’s leading bank, Standard Chartered bank.
Under the deal, Ismail’s shareholding was reduced to just over 21 percent leaving Choppies Chief Executive Officer, Ramachandran Ottapathu as the major shareholder (34.2 percent).
Ottapathu and Ismail were the major shareholders of Choppies before it went public, but their shares were whittled down to 34.2 percent from 46 percent following the Initial Public Offering (IPO) and subsequent listing at the BSE two years back.
The group, one of the markets leading mass grocery retailers in the country, retails fast moving consumer goods, household goods, fruit and vegetables, meat products, dry, fresh and baked goods through its stores in Botswana, South Africa and other African countries.
Despite this success, the company has, however, in the past attracted criticism from some sectors of the local community for its salary discrepancy.
Employees such as cashiers and packers claim to earn less than P1 000 a month, whilst executives such as the CEO and Deputy Chairman earn more than P500 000 per annum.
This has attracted outrage as the company is historically very profitable yet is believed not to be rewarding the lower-skilled workers on terms they consider fair to their efforts.