Thursday, June 13, 2024

‘Pick n Pay not prepared to trust Batswana traders’

The nation marveled at the rare entrepreneurial feat of two young men, Bakang Modise and Kagiso Mongwaketse, when they teamed up to open a Pick n Pay store in Lobatse. Both had studied in South Africa. Modise holds a degree in organisational psychology (human resources) and international relations from Rhodes University while Mongwaketse studied property development at the University of Witwatersrand.

The young men had responded to an advert in the media for citizen franchisees. From what one of the Pick n Pay Botswana directors, Maheshbhai Patel, said at a press briefing, they made the grade on account of putting together a “unique” business proposal. This was in 2009 and two years earlier, the retail group had announced transnational plans to convert a large number of its Score stores in Botswana and South Africa into Pick n Pay Family Stores, in the process creating over 70 new black entrepreneurs.

In 2017, Modise’s name appears, not on the list of Pick n Pay-created black entrepreneurs but on a witness list in a case before Justice Godfrey Nthomiwa at the Lobatse High Court. The directors of the Molapo Crossing Pick n Pay store, who include Patel, are suing their landlord, Luc Vandecasteele for defamation. Court papers filed by the latter say that Modise will testify that he was appointed manager “with a lot of fanfare.” Patel is singled out as having been at the forefront of this effort, issuing press statements to tell the world that his company had offered two young Batswana a stake in Pick n Pay. The court papers say that Modise will testify that within a year of taking a loan to buy shares in Pick n pay, “he was removed as manager and shareholder. His salary was reduced on the basis of bad sales and he eventually had to sell his shares, with the loan taken over by the plaintiffs.” The plaintiffs are Horn of Africa (the company that owns Pick n pay Botswana), Patel and two other directors, Bruce Milne and Christopher Linder.

There would have been a time when the Lobatse store did well because at one point it donated P45 000 equally among the Botswana Council of Women, the Botswana Psycho Social Rehabilitation and Hope, an organisation which cares for the HIV-infected and affected. That was before Modise went into deep depression.

According to papers filed by Vandecasteele and his company, Sphinx Associates, Modise “will state that he was abused as a mere front together with the other Motswana partner. Both were retrenched within the year. The witness is still afraid to testify and still very depressed.” The court papers don’t quote figures but Patel is quoted in a 2009 issue of Mmegi as saying that the conversion of a former Score supermarket into what is now a fully-pledged Lobatse Pick n’ Pay cost P7 million. It is unclear how much Modise and Mongwaketse contributed.

Pick n Pay Botswana directors are suing Vandecasteele and Sphinx Associates for defamation following a damning email that Vandecasteele wrote to the franchisor and brand owner, Christopher Reed, who is based in Johannesburg, South Africa. In the email, Vandecasteele complains about the directors’ management of the Molapo store as well as their business practices. One aspect of the latter is the directors’ unwillingness to empower Batswana in general.

“We are further disappointed that PnP, on the surface of it, is not prepared to trust a Motswana trader and/or train a Motswana trader. PnP, by supporting the current set-up, is ensuring that no Motswana will ever be able to own a PnP supermarket. Profits are remitted to SA or the Cayman Islands [later corrected to the British Virgin Islands in the court papers] now. Taxes are avoided and local citizens are degraded to cleaning personnel and cashiers at salaries less than half those paid for the same job in SA,” Vandecasteele wrote in the email, which is now the nub of a defamation lawsuit by the Pick n Pay directors.

The working conditions at the store are described in language that, elsewhere, has been used to describe sweatshops. Vandecasteele’s email says that employees use a recycled shipping container as a change room. 

“At temperatures sometimes in excess of 40 degrees, being locked up in it for anything longer than a minute will suffocate employees. We demand that it be removed immediately and proper change rooms are provided for your personnel,” he Vandecasteele, enclosing a photograph of the container.

Vandecasteele further alleges that a Botswana-registered company, Technisa, that has obtained a trading licences to conduct citizen-reserved trading, is actually a fronting operation. A legal opinion written by Kgalalelo Monthe, a Gaborone lawyer, made the same conclusion. Following a meeting that he had with Linder, Vandecasteele followed up with an email in which he indicated that Sphinx Associates will insist on a new lease agreement with an entirely new company “with majority citizen shareholding to avoid any further fronting.” When Linder suggested “some form of BEE structure”, Vandecasteele suggested inviting “hundreds” of citizen shareholders onboard. A South African, Linder was using language from back home. BEE stands for Black Economic Empowerment, a racially-selective initiative by the South African government to redress economic inequalities that took root during the long dark years of apartheid.

Reed, the Johannesburg-based franchisor, sent Mark Barnard, the General Manager (Franchise) to Gaborone to conduct his own investigation. After that inspection, Barnard subsequently wrote back, responding to each one of the points that Vandecasteele had raised in his complaint email.

To Vandecasteele’s points about Pick n Pay neither trusting Batswana traders nor willing to train them as well as well as avoiding taxes and underpaying employees, Barnard responded: “The franchisees have employed 980 people, 95 percent are Botswana citizens, this includes the 36 senior store managers who are Botswana citizens. The franchisees pay their staff and managers above the minimal wage stipulated by the Botswana law, with added bonuses and incentives. In three of the nine stores owned by the franchisees, Botswana residence [shareholders] own 73.3 percent of the business. With regard to the point on taxes being avoided, as mentioned previously, we are waiting for a report from the franchisees attorney.”

Vandecasteele’s email had also raised concern about Pick n Pay “not caring” about the hygiene, working conditions and general wellbeing of its employees. Barnard disagreed, noting in his response letter: “The franchisees are compliant with [Occupational Health and Safety] and food safety standards. They receive independent audit from an independent company to ensure compliance. The franchisees look after and care for their employees. The franchisees continually work towards ensuring their stores are hygienically up to standard. They receive independent audits from an independent company to ensure compliance.”

Each one of the Pick n Pay directors wants payment of P50 000 as damages for having been “humiliated and degraded” by Vandecasteele’s email.


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