The headlines are disturbing: Citizen Digital wrote of Choppies woes ‘Choppies Supermarkets corporate troubles hit Kenyan operations’. Hours later, Kenya second most read newspaper published another article titled Retail industry jittery as troubled Choppies delays suppliers’ dues. Boardroom wrangles in Gaborone over the control of one of the most prestigious multi-national store in Africa is causing jitters and near collapse of its supermarket chains outside Bostwana. Suspended in 2018 in the Botswana Stock Exchange (BSE) and the Johannesburg Stock Exchange (JSE) for failing to release its financial results for the year ended 30 June 2018, Choppies is seemingly on a freefall.
Choppies Enters The Kenyan Market
The fanfare that followed the announcement of Choppies entry into the Kenyan market has now been replaced by another round of confusion and imminent financial ruin to suppliers and job losses. If Choppies-that took over the outlets of loss making Ukwala Supermarkets- goes under, it would have followed the footsteps of Uchumi, Nakumatt and Ukwala. The retailer has 10 supermarkets in Kenya.
Choppies was founded by Farouk Ismail then known as Ismail Group of companies, before the change of name to Choppies Enterprises. The first store opened its doors in 1986 in Wayside, Lobatse. Ismail stake in Choppies which has grown to employ over 17,000 people in its 260 stores in Botswana, South Africa, Zimbabwe, Zambia, Kenya, Tanzania, Mozambique and Namibia. The dollar millionaire is the deputy chairman of Choppies.
CEO Mr Ramachandran Ottapathu
Suspended as Choppies CEO, Mr. Ramachandran Ottapathu is the major shareholder in the Supermarket chain. His suspension was as a result of entering into suspect transactions without the knowledge of the board. Ottapathu joined the giant retailer in 1990 and became the CEO ten years later. Through his leadership, the 66 year old played a pivotal role in expanding the presence of Choppies in Botswana and South Africa. He was blamed his woes on power struggles for the control of the company orchestrated by Botswana’s ex-President and present chair of the Choppies board, Mr Festus Mogae and Ismail.
Ottaathu in a statement said:
“I feel strongly that all my actions have been in the best interest of the Company and never considered any of my actions to be reckless or without the knowledge of the board,” he said.
“These transactions are the subject of a forensic and legal review by Choppies’ lawyers and consultants. I have been, and continue to be, fully supportive of this process and will continue to participate to the best of my ability to ensure this process is completed.”
“I record that I did not make any personal financial gain from any of the impugned transactions..”
The ex-CEO is not shy to reveal the role he played in making Choppies what it is:
“We started off with a very small company – it was literally insolvent at one stage. From 1986 to ’92 we had one store. From ’92 to ’99 we had two stores. From ’99 to now, we operate almost 210 stores ”
Shareholders and their stake
|Farouk Essop Ismail||192,329,304||14.8%|
|Standard Chartered Private Equity Ltd.||173,900,000||13.3%|
|Allan Gray (Pty) Ltd.||154,753,735||11.9%|
|African Alliance Advisory (Pty) Ltd.||133,614,947||10.2%|
|Afena Capital Pty Ltd.||63,764,191||4.89%|
|Botswana Insurance Fund Management Ltd.||52,825,371||4.05%|
|STANLIB Asset Management (Pty) Ltd.||35,465,717||2.72%|
|Investec Asset Management (Pty) Ltd.||26,964,008||2.07%|
|First State Investment Management (UK) Ltd.||16,473,161||1.26%|