Embattled Choppies settles shareholder dispute in Zimbabwe
Troubled Botswana and regional retail chain Choppies has moved to quell boardroom wrangles and internal disputes at its Zimbabwe operation.
This after the grocer said at the weekend that a dispute with shareholders in the country had been resolved, with former Zimbabwe vice-president, Phelekezela Mphoko having divested out of the local subsidiary.
Choppies has been suspended from the JSE and the Botswana Stock Exchange after the company failed to publish financial results on time while its chief finance officer also left the company last month. The shareholding wrangle with Zimbabwean partners was cited by insiders as among the boardroom wrangles that had resulted in the company failing to publish financial and trading statements as demanded by listing requirements.
“The shareholders and directors of Nanavac Investments have amicably resolved and settled all issues, matters, cases and disputes between them and among themselves so that there are no longer any outstanding issues… the Mphokos have disinvested from Nanavac Investments trading as Choppies Supermarkets in Zimbabwe, and have no further interests in the company and its business,” Choppies said.
Nanavac is the holding company for Choppies in Zimbabwe.
Choppies and the family of Mphoko had haggled over shareholding disputes, with the Botswana firm saying it had majority control of the unit while the Mphokos said they had control.
Officials in Gaborone had said Mphoko was given the stake to enable the company to circumvent indigenisation requirements under former leader Robert Mugabe, who demanded that foreign companies be majority-owned by black Zimbabweans. Choppies had become a key player in the Zimbabwean retail scene, where it competes against bigger operators such as OK Zimbabwe, Pick n Pay and Spar, among others.
Choppies last week renewed its cautionary over delays in publishing its financials. It said in the latest cautionary note that “the company is still progressing the matters… regarding the delay in the publication of the financial results” for the year to the end of June 30, 2018.
Sources in Zimbabwe and Botswana said Mphoko and Choppies had reached an agreement to avoid further turmoil at a time the country had become a target of frequent lootings in Zimbabwe. Choppies outlets in Bulawayo and Harare were looted last week during the #Shutdown Zimbabwe protest over fuel price increases.
“They reached an agreement and Choppies will pay the Mphoko family under a settlement that puts this whole issue to rest,” said one corporate lawyer, who declined to be named.
Choppies remains suspended in Botswana and South Africa exchanges after the company delayed its financials, which were due in September. This year, Choppies escaped hefty fines and penalties from the Botswana bourse, which determined that already suspended stocks would not be subject to new punishments for differed listings.
“There are listing rules,” said Botswana Stock Exchange chief executive Thapelo Tsheole earlier this month. "It is an international practice, so when I suspend Choppies for a few months, don't think I am being lenient on it."
The woes have been mounting for Choppies after its chief executive, Sanooj Pullarote, quit the company as it continued to fail to publish its financials. Heinrich Stander was roped-in as a replacement.