•  Ram contract signed by his subordinate, the CFO
  • Ram fetched P1m monthly salary
  • Ram used Choppies position to personally acquire 50% shares in Fours Group
  • Board clueless that Ram has owned 50% of Fours since 2016
  • Ram manipulated Competition Act, BSE Listings requirements


Suspended Choppies CEO, Ramachandran Ottapathu, used his position to personally and illegally finance with millions of pula the acquisition of Payless shares for his associate and to personally acquire 50 percent shares in the Fours Group for himself without the knowledge of the board.
This is in stark violation of the Companies Act, the Competition Act and the listings requirements of the Botswana Stock Exchange (BSE).
To start with, the employment contract of Ramachandran – who is better known as Ram – is irregular. While the contract should have been signed by former president Festus Mogae as Chairman of the Choppies Board, it was signed by Ram’s junior employee Manikandan Madakkavil, who was Chief Finance Officer (CFO) of the retail giant in 2011.
The contract, according to a confidential legal report on certain transactions involving the Fours Group, contains a number of odd provisions that are not typical of any employment contract. The report, which was authored by Desai Law Group, highlights that Ram’s employment contract gives him wide powers in relation to the management of Choppies and that he used them heavily in all aspects of the business of the Choppies Group.

The report was filed in court during the case in which Ram sought to have an emergency general meeting (EGM) called in order to have the shareholders vote for or against his stay as CEO. He lost the case.

According to Ram’s employment contract, he has powers to enter into contracts on behalf of Choppies and to perform all acts which in the ordinary course of business he may consider to exercise in the best interests of Choppies. Further the contract authorised Ram to enter into negotiations, contracts, agreements, and/or Memorandums of Understanding (MOUs) with anybody, firm or legal entity and to execute, rescind, vary or nullify any of the provisions or whole of such contracts in the best interests of Choppies.

Ram enjoys a monthly payment of almost P1 million.

According to the report, Ram employed these wide powers to personally acquire 50 percent shares in the Fours Group and to use Choppies funds to make payment to one Willem Henning on behalf of Mohamed Saleem Abdul Malique. According to the report, Ram personally used Choppies money to assist Malique in purchasing 10 percent shares in Payless from Henning (Malique already owns 90 percent of the company). Infact, it emerges that under Ram, Choppies was not providing financial assistance via payless to Malique to buy the 10 percent of the stated capital in Payless but contributed directly to the acquisition of the 90 percent by Malique by making payment directly to Henning on Malique’s behalf.

Malique owed Henning P11 252 000 for the acquisition of 90 percent of the stated capital of Payless. It emerges that P4 320 000 was paid by Choppies to Henning on behalf of Malique. According to the report, it is not clear why Choppies did so, nor is there any formal documentation in relation to the arrangement. In essence, Ram used Choppies money to finance an individual’s acquisition of shares in an unrelated company. This, according to the legal report, was in breach of financial assistance provisions of the Companies Act. The board was also not made aware of such transactions.

Further, Ram facilitated for the Fours Group to enter into a cooperation agreement with Choppies. Under the agreement, Choppies Distribution Centre would provide Fours the benefit and advantage of its buying power and together they would form a buying group. In exchange and as security, Choppies would receive 50 percent of Fours’ anticipated profit before tax. There were also various deeds of hypothecation and pledges of shares. It is then that 50 percent of Fours shares were transferred to Ram’s name personally. Ram would then acquire 50 percent shareholding in each and every store under the Fours Group and its member companies.

According to the report, the shares were transferred three years ago and were supposed to have been in the name of Choppies, not Ram personally. As it stands, Ram owns half of the shares in Fours, a company that directly competes with Choppies. Ram did not make any declaration to the board about his shares in Fours. The board only got to know this after investigations.

Further, there is concern that related party transaction provisions of the BSE Listings Requirements may have been transgressed by Ram’s transferring the shares in his own name. At the time, August 2016, the BSE was not advised of this transaction, according to the report. In terms of Section 10.1 and 10.2 of the BSE Listings Requirements, any transactions proposed between a listed company and a related party should be referred by the listed company to the BSE for review before its implementation.

Being a director and CEO of Choppies at that time, as well as a 50 percent shareholder in the Fours Group, Ram was transacting with Choppies. Ram appears to also have violated Section 52 of the Competition Act which requires that transactions exceeding P10 million in value be approved by the Competition Authority.