Embattled Choppies forced to replace Finance Director
The CEO of Botswana Stock Exchange Limited has refused to lift the suspension on Choppies from trading its share following various written requests by the retail behemoth.
BSE, led by its CEO Thapelo Tsheole, has suspended trading of shares by Choppies Limited after the leading retailer failed to publish financial results for the year ended 30 June 2018 within the stipulated time.
Rubbishing claims that BSE was lenient on Choppies since it has taken long to delist it from the bourse, Tsheole said that their role is to protect the small investor and that should they rush to delist it might disadvantage the small investor.
He also pointed out that Choppies management and its auditors have advised BSE that there is still an investigation on the giant retailer’s financial irregularities.
“We will have to also wait for the outcome of the investigation and determine which course to take,” Tsheole said.
The BSE rules mandate all listed companies to publish financial performance within three months after the financial period end-June 30 for Choppies. In accordance with this rule, Choppies was to have published its performance within a period of June 1st and September 30th.
Choppies, headed by CEO Ottapathu Ramachadran, announced that finalization of results is taking longer than had been anticipated. According a communique posted on the BSE website, a number of matters requiring the attention of the board and management, which may impact materially on the results, are still being considered and the possible reporting impacts of these have not yet been finally and fully determined. Shareholders were advised that the group would therefore not publish results by the required deadline of 30 September 2018. That deadline was missed until now.
After failing to release audited financial results for the 2018 fiscal year, troubled retail giant Choppies Enterprises Limited has replaced its Finance Director amid reports that the company accounts are not in order.
Towards the end of last year, Choppies, headed by Ramachandran Ottapathu as CEO, announced in accordance with the Listing Requirements of the Botswana Stock Exchange Limited (BSEL) and the Johannesburg Stock Exchange (JSE), that the board of directors appointed Heinrich Mathiam Stander as the Executive Finance Director with effect from 15 December 2018.
Hein will be taking over from Sanooj Pullarote whose resignation was effected from 15 December, 2018. An announcement by Choppies said Sanooj will continue to offer his assistance to the company until the delivery of the fiscal year 2018 Audited Financial Statements.
Hein is a qualified Chartered Accountant who started his career as an auditor. Prior to this assignment, Hein held various senior level finance roles at British American Tobacco (BAT). During a 20-year career at BAT, he spent his last eight years as Head of Strategy, Planning and PMO, Middle East and was based in Dubai. Sources say major shareholders of Choppies, as well as the board of directors, have been putting pressure on the CEO to replace the finance director with someone more decorated, hence the new appointment.
About seven asset managers who manage pension moneys are amongst the top 10 shareholders of the exponentially growing Choppies, using the group’s 2017 annual report as a guide.
Those in the know say that Choppies problems are as a result of the legal brawl over Choppies Zimbabwe ownership. Ram and board chairman former president Festus Mogae claim that Choppies Botswana owns 93 percent of Choppies Zimbabwe and that Siqokoqela Mphoko, son to former Zimbabwe Vice President Phelekezela Mphoko and family, own 7 percent. The Mphokos however claim that they own 51 percent of Choppies Zimbabwe. The matter has since remained unresolved.
Sources say that the biggest problem with Choppies accounts is that they cannot be consolidated before the Zimbabwe issue is resolved. Those with accounting knowledge say that Choppies Zimbabwe was accounted for as a subsidiary in the Choppies financials since 2012 when Choppies entered Zimbabwe. However, they say that from the look of things, it should have never been accounted for as a subsidiary but rather an associate. So it means that Choppies auditors may have to now go as far back as 2012 to fix Choppies financials and account for the Zimbabwe business properly, which would take a lot of time.
Choppies also had queries with regards to the valuation of stock as well as stocktaking, which new auditors are resolving.