- Wants his job back
- Says Mogae and Co. want to steal Choppies from him
- Newly appointed CEO Farouk Ismail dumps Mogae for Ram
TEFO PHEAGE & LAWRENCE SERETSE
Suspended Chief Executive Officer (CEO) of Choppies Enterprises Limited, Ramachandran Ottapathu, has taken Choppies and its Chairman, former president, Festus Mogae to court to pre-empt them from dealing him the final blow of terminating his job.
In his application challenging his suspension and the refusal of the board to convene an extraordinary shareholders meeting, Ram says board members led by Mogae are plotting to oust him in a manner that is detrimental to the life and existence of the company in which he has substantial shares. “..the Board has ceased to act in the interest of shareholders and has attempted to hijack the company,” Ram stated in his court application before Justice Tau.
Ram is the largest shareholder in Choppies at 19.53 percent.
“The purpose of this urgent publication is to compel the board to call an extraordinary general meeting forthwith,” he says in his court papers that cite Choppies and its board of directors as respondents. “The purpose of the meeting is to allow the shareholders to consider removing the non-executive directors and replacing them with alternative directors,” reads the application which cites.
According to Ram, non-executive directors Mogae and his board, won’t call a meeting because of their fears that they may be ousted by shareholders. “The board accordingly have a personal interest in delaying the meeting or preventing it from being convened at all,” he says.
“Sixty percent of the shareholders requisitioned an extraordinary general meeting. The board was then obliged to call the meeting in terms of Section 102 of the Companies Act and admitted that the requisition was valid. But the board did not do so. Instead, Mogae and board members lobbied some of the shareholders to withdraw their support for the EGM. They then argued that the 60 percent threshold was no longer met but this misses the point. Once the requisition has been validly made, the board is obliged to call the meeting. The subsequent withdrawal of support does not change this.
In any event, in terms of Section 108 of the Act, the court has the power to call a meeting of shareholders. I submit that the present situation cries out for a meeting of shareholders to be convened as soon as possible and without delay. This is precisely the type of situation that the legislature envisaged when it gave the court the power to call a meeting of shareholders.”
So far, two shareholders Allan Grey and African Alliance have withdrawn their support for a shareholders meeting. However, according to court documents, the withdrawal of African Alliance is not total as the company wanted the meeting held within a month of conclusion of forensic investigations and audits of Choppies.
Ram says he wants Mogae and the others to tell the court why they are blocking the meeting. The last time Mogae was in court was during the controversial late Louis Nchindo’s case because during his presidency Debswana had been awarded a piece of land that was being contested.
Ram says he was hurt when presenting a plan of action in the interests of the company to address governance and operational improvement as required by lenders. “I presented my proposal to the board. I had expected input from (them) or counter proposal. However, my proposal was discussed and only to the extent that it was viewed by certain directors as a ‘cut and paste’ of previous proposals,” says Ram who also posits that the board is clueless about business and is not helping him to better the fortunes of Choppies.
In his application, Ram says he was at some point forced to resign. “I was informed that I had a binary choice – I must either resign the post of CEO effective in three months, but to be announced immediately, or I would immediately be suspended on full pay. I asked for at least 24 hours to consider my options in the face of a decision of this magnitude, but this was declined.
“I was told that I had to make an immediate decision, and I was only permitted a brief period of time to consult. In the circumstances … I was not ready to make the board’s decision for them. The response was that I was immediately suspended. I told the board that any attempt to suspend me would be contested.”
Ram claims that he was not given any reasons for his suspension and that he was suspended without any form of hearing. “Those on the board that voted to suspend me have a strategy to remove me from the position of CEO,” he says. “Their first option was that I should resign. Their second option was to suspend me. I have no doubt that they will now attempt to find grounds to convene a disciplinary enquiry with a view to dismissing me. There are no such grounds. This is a manufactured attempt by the non-executive directors to take control of the board despite the fact that they hold almost no share in the company.”
Ram writes of receiving a letter from the board on 21 May 2019 suspending him and further informing him that he was under investigation “for breaches of confidentiality, breach of fiduciary duties and duties to act in good faith in the interest of the company, gross negligence and/or reckless conduct in the performance of duties as the CEO, contravention of legislation and bringing the company name into disrepute thereby causing the company significant financial and reputational damage”.
Ram says all these charges and allegations are baseless. “There are a lot of conclusions, but nothing to back them up,” he argues.
Farouk dumps Mogae
In an interesting turn of events, Farouk Ismail – who was appointed by Mogae’s board to replace Ram after the latter was suspended as CEO – has dumped Mogae and is now pulling his weight behind Ram. He has deposed a supporting affidavit to Ram’s application agreeing with calling a meeting of shareholders. Farouk is also a shareholder in Choppies and a long time family and business ally of Ram. “Having read the founding affidavit of Mr Ottapathu, I confirm the contents therein as far as I am concerned,” he says in his affidavit.
“I confirm that there is an urgent need for an extraordinary general meeting of shareholders to be called forthwith. I confirm that the board of directors of Choppies have to-date resisted all calls by the applicant for the meeting, no matter the circumstances on the ground of which the shareholders have not been informed and more importantly that the board had confirmed to be in compliance with Section 106 of the Companies Act at the meeting of the board held on 04 June 2019. I support the relief sought by Ottapathu and hold the view that the immediate calling of a meeting is in the best interest of Choppies and its shareholders.”