Ram axes Desai as Choppies lawyer
New board replaces Rizwan Desai with Neil Armstrong
The Choppies new board has moved swiftly to replace Rizwan Desai as the retail giant’s legal adviser and replace him with Neil Armstrong, The Botswana Gazette has established.
Rizwan Desai is Managing Partner at Desai Law Group while Neil Armstrong recently left Collins Newman and Co to establish his own firm. The decision was reached recently by the new board at Choppies that lost no time before it approached Armstrong.
These developments were hot on the heels of the new board, which is made up of people nominated by Ramachandran Ottapathu (better known as Ram) at an EGM last week, re-installing Ram to the position of Chief Executive Officer in an apparent quid pro quo.
Ram fought a bitter battle with Desai at the height of his survival period recently. He told this publication this week that he did not want to comment on the decision to re-install him. “It is the board’s call on who they engage in that role,” he said.
Desai has confirmed the firm’s dismissal, saying he was axed because he did not condone what Ram was doing. “It is correct that I have been dropped,” he told this publication in an interview late yesterday. “I have been sidelined because they do not like what I have to say.” The decision to drop Desai is seen as part of Ram’s crackdown on those who opposed him during his struggle for survival. A source close to these developments says Desai should have voluntarily parted with Choppies immediately after the board he preferred was deposed.
Desai Law Group came under heavy criticism from Ram during his war with the deposed board, with Ram questioning the firm’s credibility and integrity. “Desai Law Group (DLG), which prepared the legal report, used to be my lawyers and have since been retained by Choppies, and it is a serious conflict of interest in the investigation,” he said of the legal and forensic reports on Choppies recently. “All the transactions ostensibly investigated and impugned in the legal report by Desai Law Group were transactions in which Choppies and Mr Ottapathu received legal advice from Mr (Rizwan) Desai through Collins Newman & Co and later DLG. Mr Desai was involved in the planning, structuring, documenting, presentation for board approval and implementation of almost all transactions from the very beginning.”
Experts have noted that Desai should have explained his role in Ram’s decisions in his report to Choppies. “We have also taken note of Mr Ottapathu’s statement to us that there are a number of other instances in relation to which both he and Mr Ismail (Farouk) have assets of the company registered in his own, and Mr Ismail’s name, such as various butchery licences, to give but one example,” the report of the Desai Law Group stated. “This appears to have been a peculiarity in relation to the pre-listing days of Choppies and must be corrected in early course.
“The contention by Mr Ottapathu here appears to be that, because he holds certain licences in his own name, this justifies the similar holding of the Fours Group shares in his name of the benefit and on behalf of the company … This contention is unsupportable in and of itself (the fact that an incorrect act has taken place previously does not justify the occurrence of further incorrect acts). We therefore strongly recommended to the Board Mr Ottapathu be required to produce a full list of any such licences held in his own name (and/or that of Mr Ismail) in order to initiate requisite processes to have such licences transferred to the company at the earliest opportunity.”
Ottapathu states that besides advising him and the board on the issue, DGL also hid the fact that the Fours shares were already pledged to Choppies.
By contrast, (Ram) Ottapathu has argued that both the legal and forensic reports are inconclusive and carry serious conflict of interest. “I caution shareholders not to accept the report at face value,” he has returned, noting that both reports had created a false impression that the business relationships between Choppies, Payless and the Fours Group were somewhat untoward and were kept a secret.
It emerges in the reports that the business relationship was known to the board. The agreements between the entities were drawn up by Collins Newman & Company where the Managing Partner at Desai Law Group, Rizwan Desai, was a senior partner, and were approved by the board.
In Ram’s view, the “so-called” legal report’s analysis largely cleared him while its conclusions, which were drawn by Desai Law Group (DLG), condemned him.
“Regrettably there was no attempt by DLG to present a fair and unbiased account in its legal report,” he has asserted. “Both the legal report and its summary present a skewed version of events on incorrect assumptions and are flawed.”
The language and leaps of logic carried in the report, Ram said, appeared to have been designed to embarrass him instead of focusing on what the forensic report actually says.