Zimbabwean shareholders in the Botswana-based multinational grocery and general merchandise retailer Choppies Enterprises have accused the company’s other shareholders of trying to “capture” them like the “Guptas did in South Africa”.
Choppies is in partnership with Zimbabwean company Nanavac Investments, which is owned by that country’s former second deputy president, Phelekezela Mphoko, and his son, Siqokoqela.
Nanavac is, according to a shareholder’s agreement that City Press has seen, a 51% shareholder in 32 outlets across Zimbabwe.
This arrangement is in line with Zimbabwe’s indigenisation law.
The shareholders’ agreement was apparently signed on July 24 2013 and thereafter, Zimbabwe’s ministry of youth development, indigenisation and empowerment gave the 51%:49% shareholding arrangement its stamp of approval.
However, Choppies Enterprises, which has Botswana’s former president Festus Mogae as its chairperson, claims Nanavac’s interest in the business is a mere 7%.
Choppies’ claims about the shareholding split has sparked a fracas since June 1, when Mogae wrote a letter to the Mphokos, claiming they were given the 7% shareholding free of charge.
Siqokoqela, however, denied the shares were free and showed City Press a loan agreement which shows that Nanavac borrowed $20 million from Choppies that would be paid on “revenue from the trading activity” for a period of six months.
Mogae’s missive reads: “We entered into this partnership with a clear understanding of the shareholding of 93% shares to Choppies Enterprises Ltd and 7% to the Mphoko family, free of charge. We signed agreements based on this, and even the former president’s office has got copies of these agreements.
“You are well aware that I had access to former president RG [Robert] Mugabe and I did clear this with him in the presence of former foreign minister, Honourable Simbarashe S Mumbengegwi.
“I have the same access to the current president as I had to the previous one.”
Mogae warns that Choppies did not intend taking the matter to the public domain.
“As a local partner, your family got the best deal from the whole group. Your family is actually getting much more salary than what the group chairman is earning. I paid 15 000 000 pula ($1.4 million) for my shares. I expect you to appreciate this and show respect to our agreement and long-lasting relationship,” he added.
Siqokoqela called Choppies’ chief executive officer (CEO), Ramachandran Ottapathu, “mafia in a CEO’s suit”.
“I mean, how can he claim he has 93% of a company, which is in a reserved sector?” he said.
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