Institutional Investors (IS) are said to be actively involved and playing a major role in bringing about stability to the operations of Botswana’s market leading grocery retailer - Choppies. The IS together with Standard Chartered Bank holds about 44 percent total combined shares of Choppies.
The brand which has spread its wings into four countries namely Botswana, Kenya, South Africa and Zimbabwe is currently conducting three different types of investigations, the most being forensic investigations relating to transactions which were conducted in South Africa and Zimbabwe. In Zimbabwe there are allegations of money laundering and impropriety in relation to transactions conducted in South Africa by Choppies, South Africa. Institutional Investors (IS) including BIFM, Alan Gray, Investec and African Alliance have allegedly become active and proposed changes to the board by adding more members to strengthen and broaden the experience.
It is said the IS brought two names to add to those which were allegedly brought by the suspended Chief Executive Officer, Ramachandran Ottapathu. It is alleged that at one stage Ottapathu went to the board with his preferred names. In one of the meetings Ottapathu allegedly asked board chairman and former President Festus Mogae to resign completely and be replaced by a South African based Motswana, Goleele Mosinyi. Mogae and other board members did not take kindly to the proposal with Mosinyi stating that he can only consider coming into the board if sent by the IS.
Mosinyi is also a board member of Allan Gray. Allegations are that Ottapathu may have been having inside information that Mosinyi together with Kenny Nwosu were already proposed by the IS to represent them and beef up the board. If things had gone his way Ottapathu was allegedly going to come up with the names at the proposed Extraordinary General Meeting (EGM) to be called soon.The alleged notice of state is called to resolve and appoint Mosinyi and Nwosu as directors of the company by ordinary resolution in accordance with the provisions of clause 20.3 of the company’s constitution. It is alleged that both Mosinyi and Nwosu have been nominated to the board of directors by the Institutional Asset Managers in Botswana, as duly authorised by their clients.
The notice proposed to resolve to remove Festus Mogae, Farouk Ismail, Wilfred Mpai, Dorcas Ana Kgosietsile, Ronald Tamale, Heinrich Stander and Ramachandran Ottapathu as directors by ordinary resolution in accordance with the provisions of clause 20.3 of the Company’s constitution. It is said that the IS did not budge but insisted on Mogae continuing as chairman as well as other current board members but should be beefed up hence they proposed both Mosinyi and Nwosu. Mosinyi declined to comment when reached for comment. “I am not a board member of Choppies and there is nothing I can comment on based on allegations”.
Reports reaching this publication indicate that for some time the board has been doing damage control through a series of meetings with all stakeholders ranging from staff, creditors and banks. It is alleged that stakeholders are happy with the current investigations as well as suspension.
Reliable reports reaching Botswana Guardian indicate that it may take some time to complete the matter as some investigators have committed themselves to finish their part any time from this week, while others have promised to do so at the end of July with the third party still having asked for more time .
This week the board released a statement through BSEL expressing disappointment at the “unfortunate and intemperate comments” attributed to or made by Ramachandran Ottapathu, the suspended CEO of the company over the past week and a half on various social media platforms, in the Botswana press, on television and radio interviews and by way of correspondence from him to selected shareholders. “The Board considers it necessary to dispel the statements by the suspended CEO that his suspension was as a result of disagreements with certain Board members and/or because he had presented a report that calls for changes in governance at Board and Company level”.
The statement says the decision by the Board to suspend Ottapathu was as a result of an “aggregation of activities and conduct” by the suspended CEO. It said these activities will in due course be made known to shareholders, once the various investigations referred to in previous announcements by the company are completed.
In the meantime, the Board advised shareholders that (i) the suspension was and is valid and proper; (ii) the suspended CEO’s rights and entitlements under Botswana laws have not been infringed and remain protected as would those of any employee of the Company; and (iii) as the suspended CEO remains an employee of the Company during the period of his suspension, such rights and entitlements do not extend to unauthorised disclosures by him of confidential information relating to the Board and the company (which may
in and of themselves form the basis of disciplinary proceedings against him). The statement further states that the Board has been made aware that a document purporting to be a draft notice of an extraordinary general meeting of shareholders of the company has apparently been sent by Ottapathu (or on his behalf) in his capacity as a shareholder to select shareholders. “The Board advises shareholders that it has not authorised the issuance or circulation of any such EGM Notice,” reads the statement.
Whilst Ottapathu is entitled to requisition an EGM subject to meeting the requirements of the Companies Act, formal and proper notice of such an EGM must come from the Board, which is itself considering various options available to it to disseminate further information at the earliest possible opportunity to shareholders, including at an EGM called by the Board of its own volition. Shareholders are expected to be apprised of the Board’s decision in due course. The company’s primary listing is on the BSE and its secondary listing is on the Johannesburg Stock Exchange. Ramachandran was this time not willing to talk to this publication. Instead he was quick to quash any questions directed to him.
When asked to confirm and or deny that he wanted to come up with his own board and remove board chairman, Mogae replacing him with the Johannesburg-based financial guru, Goleele Mosinyi - Ramachandran's short answer was that there is notification of the board meeting. “You will see it and it will be issued by Botswana Stock Exchange Limited. This is a public company and I cannot comment on it now,” he said.