Retailer, Choppies, is looking at nearly doubling its stores in Zimbabwe on the back of anticipated economic “boom” in the short to medium term, an official has said.
Choppies, which is head-quartered in Botswana operates 34 outlets and is looking to open an additional 26 shops countrywide, including in areas where it has limited presence, Ramachandran Ottapathu, the chief executive officer said.
Choppies is currently embroiled in a shareholding wrangle with Zimbabwe’s former vice president Phelekezela Mphoko, who is claiming to be the majority shareholder in the supermarket chain.
That is being disputed by Choppies, a company registered in Botswana, which is insisting Mphoko was merely used as proxy to circumvent the country’s indigenisation laws.
“We are hoping that the situation remains favourable — and should this happen, we endeavour to spread the shops to other parts of Zimbabwe to a point that we will run, in the end, 60 shops in the country,” Ottapathu said this week.
Zimbabwe is looking at reviving its economy and is putting in place policies aimed at attracting investments and create jobs, among others.
The Government has since repealed indigenisation laws, which restricted foreign ownership to have more than 49 percent in local enterprises to attract the much needed foreign direct investment.
It is targeting to be an upper middle -ncome nation in the next decade, according to the Government. The upper middle-income group is categorised by very high purchasing power.
Mphoko merely a front
Ottapathu says the 51 percent Mhpoko claims was done to comply with indigenisation legislation, which precluded foreigners from owning big stakes in local businesses.
“We have the family of the former vice president of the Republic of Zimbabwe, Phelekezela Mphoko, whom we entered into partnership with, now refuting that we are the owners of the business because they are using paperwork that was done in order to comply with the legislation that was in place,” Ottapathu said.
“We have documentation to prove that we are the ones who brought in $25 million from Barclays Bank of Botswana, the underwriters of the funding, for the setting up of Choppies operations in Zimbabwe.
“We also reiterate that the Mphokos were given the 51 percent 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. “(The) Mphokos never invested any cent in the business. We gave them the shares on paper.
Seven percent token
Ottapathu claimed the seven percent free carry shares was a way of thanking them for facilitating the setting up of the business in Zimbabwe. The other 44 percent shares were allotted to make it 51 percent.
According to the shareholder agreement signed to facilitate the setting up of the business under Zimbabwean law at the time, the 44 percent shares could “be called back” at any minute at no cost to Choppies Enterprises, thus leaving Mphokos with 7 percent.
Further, the seven percent 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.
“We have not yet reached that stage yet,” Ottapathu said.
“For the record, Siqokoqela Mphoko and his father (Phelekezela), who are shareholders of Nanavac, have all along been getting dividends through their bank accounts for the 7 percent.
“We are, however, aware of machinations by those that seek to portray themselves as victims and saints to wrestle the Choppies Enterprises from its owners, the people of Botswana.
“They have tried to re-write the Choppies story and we will not be party to that attempt. The partners know the truth although some are now trying to take advantage of the situation to twist facts in their favour.
“All the important and crucial stakeholders know who holds what percentage in the company.
“They also know who invested what. They also have documents that talk to these issues. “
“We firmly believe that our partners should desist from greed and respect the tenets of the agreement that we made and committed ourselves to at the initial stages.”-ebusinessweekly.co.zw