Mphoko shares not real: Choppies

BOTSWANA-based supermarket, Choppies, has threatened to revoke shares it gave to former Vice-President Phelekezela Mphoko and his son, Siqokoqela, as part of a scam to allow the retailer to comply with the country’s indigenisation laws that required locals to control a 51% stake in foreign-owned businesses.

BY DESMOND CHINGARANDE

Botswana-based Choppies Enterprise chief executive officer Ramachandran Ottapathu said in a letter to the Press that the Mphoko family were given 51% of the shareholding “on paper”, to meet existing empowerment laws, but their actual shareholding was 7%.

The ongoing ownership wrangle has exposed the fraudulent activities engaged in by the partners to circumvent the country’s indigenous laws.

“Mphokos were given the 51% shares in an agreement which allows us to buy back the shares as and whenever we want, as part of efforts to comply with the law. We gave them the shares on paper. Their 7% free carry shares was a way of thanking them for facilitating that we set up business in Zimbabwe,” Ottapathu said.

The agreement allowed Choppies to withdraw the 44% shareholding allotted to them at any time the retailer wanted, while the other 7% shares could be bought back at $1 per share.

“The other 44% shares were allotted to them (the Mphokos) to add to the 7% free carry shares to make it 51%. According to the shareholder agreement that was signed to facilitate the setting up of the business under Zimbabwean law at the time, the 44% shares can be called back at any minute at no cost to Choppies Enterprises, thus leaving Mphokos with their 7% share.

“The 7% free carry shares can be bought back by Choppies Enterprises at US$1 per share in the event that we want Mphokos out of the business altogether.”

Ottapathu said the Mphokos have been getting dividends equal to the 7% shareholding they hold and not the 51%.

“For the record, Siqokoqela Mphoko and his father, who are shareholders of Nanavac, have all along been getting dividends through their bank accounts for the 7% shares they hold and not the 51%. We have proof of transfers, and we can furnish you if you so wish.”

Ottapathu said he had documentation to prove that the Mphoko family never invested any money into the setting up of the business in Zimbabwe, but the Botswana partners are the ones who brought in $25 million from Barclays Bank of Botswana, for the setting up of Choppies operations in Zimbabwe.

In the letter, Ottapathu is accusing sections of the media of portraying them as trying to wrestle Choppies Zimbabwe from Mphoko and his family.

7 Comments

  1. Zimbabwe’s Indigenisation and S.A’s BEE program are a charade, a total mirage

  2. This has long been known to be the case. An open secret.There is no way a black petit bourgeoisie like Mphoko could have miraculously earned 51 percent shareholding of the regional retail giant Choppies except by resorting to the tried and tasted mafia-type Zanu tactics of grappling shares as a means of “protection” to anyone wishing to do business in Zanu-territory. This tactic has been widespread in most of Mugabe’s toxic empowerment programmes that saw penniless but well connected party apparatchiks suddenly blossom into multi-millionaires over night.

  3. What I know is law must never apply in retrospect.
    And my advice to these Indians who always think they are smart is that very soon shall come a time we blacks will boycott their superstitious ritual based businesses and see if their own handful of folk will be able to viably support them. Ottapathu you are better advised to enjoy the warmth of the non permanent Lacoste fire quietly than uttering unprincipled and unethical statements which will backfire for your own folk.

  4. Maphozho Saruchera

    Had it not been for the New Dispensation, such issue would not have come out. The long and short of it is that the former VP abused his office and the law should take its course.

  5. Let not any fool think the Mphoko- Choppies saga is a former g40 kinpin corruption issue. This is purely a national interests versus foreign interests issue.

    1. Mphoko by any measure put his selfish interests first and his deal robbed Government of revenue as he subverted the Indigenisation law. I also wonder if those goods in Choppies shops were paying ZIMRA import taxes. It might not be surprising that Mphoko was using his position to evade paying duty.

  6. The former VP is not alone in this type of thing. All businesses that operates in Zimbabwe are under the same thing. Remember that even the remaining white farmers also have to pay a Zanu PF heavyweight to continue operating.

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