- Cuts all ties with disgraced retail giant
- Relationship with Ram reaches rock bottom
Former president and Chairman of Choppies Festus Mogae wants to cut all ties with the disgraced retail giant that has left his reputation tainted because he and Choppies CEO Ramachandran Ottapathu no longer see eye to eye.
Mogae fired his parting shots to Ram, as Ramachandran is better known, in front of Choppies investors in September last year when he announced his departure and has not looked back at the troubled superstore since. “He wants to cut ties with Choppies and everything associated with it and I think he will be more than willing to sell to any willing buyer,” a close family member said.
Mogae had not responded to this publication’s questions by the time of going to press yesterday but Ram, who is said to be a frontrunner in acquiring his former Chairman’s shares, said he was not in a position to divulge whether he would buy the shares or not. “I am not in a position to say whether I will buy or not, “he said in a brief interview with this publication. The challenge, however, is that Mogae’s share value is not known except for the suggestion that they are worthless, given the Choppies equity value.
Mogae won the US5million (P50 million) Mo Ibrahim prize for good governance in Africa when he was on the verge of retirement as president. With money at his disposal, he told this publication before that he invested P15 million in Choppies shares. “I bought shares worth P7.5 million from Farouk and P7.5 million from Ram,” he explained. “I bought them as a sign of confidence then in the dream that I was sold by the Choppies founders.”
However, the statesman said he continued to buy more shares in Choppies until he ended up with around 40 million shares when Choppies issued its Initial Public Offering (IPO) on the Botswana Stock Exchange (BSE). Each share was valued at P1.15 at the Initial Public Offering (IPO) in 2012. Post listing, Mogae said he sold 10 million shares to businessman Paul Paledi, the proceeds of which were invested in Liquorama.
Mogae sold another 10 million shares to South African investors during the Johannesburg Stock Exchange (JSE) secondary listing where he pocketed P40.1 million. Choppies share price grew to over P3 per share during the good times, but crumbled to just around P0.65 post the financial results scandal. Currently, Mogae owns approximately 19.5 million shares. The value of the shares he currently owns fell from a staggering P60 million to around just P12 million at present.
Choppies has shed billions of value in pula since its much published scandal. Investors have lost money, with some hinting at a possible restructuring driven by Choppies’dry coffers. Mogae’s sale is expected to effect as soon as the BSE lifts the trading halt. He and Ram are reportedly not on speaking terms.
Mogae’s parting denunciation of Ram
Mogae accused Ram of shooting down any moves towards better governance at the regional grocer and of wielding his financial muscle over other directors. “The structure of Choppies was built around the personality of Ottapathu. Ram was everything. He could hire, fire, open and close shops all over and that did not look awkward until recently when things went bad,” Mogae said at the last Extraordinary General Meeting he attended.
“The CEO resisted many things such as establishment of an investment committee. He would say, ‘I made this company’ and ‘This is my money,’” Mogae charged.
“Now he is losing that money in the North West (SA), in Kenya, Tanzania, Zimbabwe and other places. We tend to fight over everything and there’s no communication. As the board, we also have been negligent and he has been the company.”
Mogae said the board tended to fight over “who has more money and who owns what” instead of addressing governance oversights that had led to the crisis that Choppies finds itself in.
Ram said Mogae was old and useless
Ram was not silent and hit back at Mogae during several interviews. He accused Mogae of being an absent chairperson who would just come, cash and go. “I was doing everything alone,” he asserted. “He and his board did not know anything about business. Besides, what do you expect of an 80 year old person? He is old. We need a business-minded board.” It is not known what prejudice Choppies will suffer as a result of Mogae’s exit but some are suggesting that Choppies achieved certain deals because of his presence around the retail giant, although Ram would not agree to that notion.