Zimbabwe’s Choppies owners want 100% control
Zimbabwean majority shareholders of the strifetorn food retailer Choppies Enterprises Limited have given notice to their Botswana partners to buy them out of the business.
Nanavac Investments (Pty) Ltd owns 51% of 32 Choppies outlets in Zimbabwe.
Nanavac’s owners are former second vicepresident Phelekezela Mphoko and his son, Siqokoqela, while the Choppies board chairperson is former Botswana president Festus Mogae.
Choppies has seen its share price drastically dropping and Reuters this week reported that the Botswana Stock Exchange – and the JSE, where the company has a secondary listing – suspended trade in Choppies shares after the company failed to publish its audited financial results for the year ended June 30 this year.
Choppies failed to release its annual results within three months of its financial year-end, breaking the stock exchange rules.
The fight among the shareholders in Zimbabwe has been getting uglier.
Nanavac has accused its Botswana partners of trying to “capture” it and reducing its majority shareholding, which aligns with Zimbabwe’s indigenisation law, to a mere 7%.
City Press has seen the notice that Nanavac’s lawyers, from Mathonsi Ncube Law Chambers, gave to Choppies to invoke clause 13 of the shareholders’ agreement that the parties signed.
The buyout clause, according to the lawyers, reads: “Notwithstanding anything contained in clause 10, the Mphokos may at anytime purchase all of the Choppies shares for a cash consideration equal to the latest audited [earnings before interest, tax, depreciation and amortisation] Ebitda multiplied by 12, and settled within 10 days of making such an offer…”
“In terms of the above quoted clause 13 of the shareholders’ agreement,” the lawyers said, “we are instructed to give notice, as we hereby do, that ours have decided to invoke the provisions of the said clause 13 of the shareholders’ agreement and thus you are hereby given due notice that ours intend to buy out yourselves from the company.
“This notice effectively terminates forthwith the business partnership between our clients and Choppies Enterprises Limited.
“Consequently, in terms of clause 14 of the shareholders’ agreement ours will, with assistance of accountants and lawyers, be inspecting the company books of accounts to ascertain the latest Ebitda for the purpose of determining that which is payable to yourselves in terms of clause 13 of the shareholders’ agreement,” the lawyers added.
Choppies spokesperson Jacob Sesinyi did not respond to written questions on the matter.
In September, Choppies accused Siqokoqela of taking money, goods and services not due to him, estimated in excess of $51 000 (R731 169).
Siqokoqela said Choppies had frozen his salary over the past two months.
“They want me to get out of the company and they want to pay me only 7%. They know very well that if I miss three months of my mortgage payment to my bank it will come after my property. “They’ve told the transportation division not give me any fuel at all without any board decision.
“They’ve moved company documents from KPMG and tried to remove me as secretary. I’ve never in my life experienced such fraud,” Siqokoqela said.
Choppies operates in Botswana, South Africa, Zimbabwe, Zambia, Kenya, Tanzania and Mozambique.
In South Africa it competes with supermarkets such as Boxer Superstores and Shoprite, and its stores are mostly situated in North West.
Choppies’ target is to invest $22.2 million in an expansion drive to increase its 217 stores to 250.