Friday, September 30, 2022

One of Botswana’s biggest companies, Choppies Limited is facing an existential crisis

Choppies has been a victim of own success.

For over two months now Choppies has failed to release its financials.

A behemoth by Botswana standards, it was always clear that Choppies had feet of clay.

It was a one man show ÔÇô with the CEO running the chain store by a hand set ÔÇô from suppliers all the way down to the cleaner.

The model was in a way based on continual expansion ÔÇô at one time opening a store every month, which by itself was not sustainable.

It was only a matter of time before consequences of quality assurance caught up with them.

In strict terms, Governance was at best footloose and at worst antithetical to Choppies culture.

Even after publicly listing Choppies struggled to change its culture to reflect that it was a public company.

Instead it continued to operate like a family business with the CEO working closely with his relatives, wife, son etc.

In fact the biggest surprise surrounding the crisis at Choppies is not that Group has hit a snag, rather it is that it happened so quickly when its founder and defacto owner, Ram Ottupath who is also the CEO is still in charge.

Many had thought of him as an accounting wizard who could wriggle his way through any difficulty.

Allegations of money laundering aside, the structure of Choppies supply chain leaves a lot to be desired.

Some of the Choppies biggest shareholders and directors are also its suppliers.

Our memories are still fresh with how Choppies entangled itself into the country’s shady underworld when a former head of the intelligence services was offered shares free of charge in the process violating both corporate governance and tax regime rules.

Admittedly that was before listing.

Choppies might still rebound and recover from its current difficulties, but as it is, Choppies, for all its difficulties might yet still pay for its past evils.

Choppies by all accounts is a victim of its own success.

The company has used its size and muscle to circumvent the rules, including extracting concessions like work and residence permits from Government when everybody else was unable to do so.

The biggest problem with Choppies and those in charge of it has been a lack of modesty and an aggressive and egregious longing to be part of the establishment.

They felt they could conquer Africa and the world at record speed, along the way not giving themselves time for review, reflection and consolidation.

Along the process Choppies and its executives, driven by greed wanted to invest in everything under the sun; from gas stations to insurance, from media to printing, from property to farming and at one point even tried to get a banking licence ÔÇô an attempt that ended up in tears, and whose failure in hindsight should have been an eye opener of pitfalls ahead for the Group.

By getting too close to the countrys’ politics, Choppies, its executives should have known their Group was flying too close to the sun.

The current crisis can easily be traced to Choppies association with politicians in Zimbabwe.

Zimbabwe is not the only country where Choppies took a swing at the fences to get politicians under its armpit.

In Botswana the Group’s Chairman is none other than former President G.G Mogae.

Minister Sadique Kebonang has been on the Board of Directors.

And scores of ruling party politicians and indeed opposition politicians have been beneficiaries of both the patronage and largesse of Choppies ÔÇô a lot of it really intended at buying access.

It was thus not a coincidence that when they looked at entering the Zimbabwe market, Choppies chose as its local pivot Phelekezela  Mphoko, a former Zimbabwe’s Ambassador to Botswana who later on became Vice President of that country before a military takeover that removed from power Robert Mugabe and many of his cronies.

It has always been part of the Choppies model, if not modus operandi to actively seek and solicit political protection, political cover and political access.

For all that Choppies is worth Mugabe is also part of the Group having been actively cultivated by efforts of Festus Mogae.

In Mozambique Choppies close if not on bed with Samora Machel’s son.

In Zambia as is the case in Kenya, political operatives are also never too far away.

We may rail against a failure to release results. But Choppies is a victim of greed and love for power.

Ordinary Batswana have never sat comfortably with Choppies.

They patronized it because there was no competition.

This is because they never forgave it for the destruction the chain store wrought on small tuck shops and family owned businesses that used to thrive, especially in the rural areas before the monster arrived on our shores.


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