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Ram suffers set back in Choppies battle

Publishing Date : 10 June, 2019


Choppies Enterprises Chief Executive Officer (CEO), Ramachandran Ottapathu has this week suffered another setback in the continued battle between him and the former President Festus Mogae.

Ramachandran was suspended a fortnight ago by the board reportedly based on recommendations by a certain law firm in South Africa, owing to the recent troubles facing the retail giant. To fight back his suspension, Ottapathu embarked on a mission to lobby Choppies shareholders in a bid to overturn the board’s decision. 

However, on Monday this week, Choppies Board in an internal shareholder statement seen by this publication, announced that Ottapathu has no right to call an Extra Ordinary Meeting (EGM) as the requirements of the Companies Act, formal and proper notice of such an EGM must come from the Board.

This publication has learnt that the board has not taken kindly statements by Ottapathu that his suspension was as a result of disagreements with certain board members and/or because he had presented a report that calls for changes in governance at Board and company level.
The board indicated that the decision by the board to suspend Ottapathu was as a result of an aggregation of activities and conduct by the suspended CEO which its investigations are still ongoing.

In the board stated in the announcement that the CEO’s suspension was and is valid and proper.  They further stated that Ottapathu’s rights and entitlements under the Botswana law have not been infringed and remain protected as would those of any employee of the company.
“As the suspended CEO remains an employee of the company during the period of his suspension, such rights and entitlements do not extended to unauthorized disclosures by him of information relating to the Board and the company which may form basis of disciplinary proceedings against him.”

The order of the board highlighted that they were made aware of a document purporting to be a draft notice of an extraordinary general meeting (EGM) of shareholders of the company sent by Ramachandran in his capacity as a shareholder to select shareholders. However, the Choppies supremo believes what triggered suspension was a proposal he had submitted to the company board to have Mogae removed as Board chairman, and also have new faces with relevant retail experience in the board.

“At his age, he need to know the impact on his productivity level. He was sick also. He has been missing a lot of board meeting until last year September,” Ottapathu said of Mogae in an interviewa fortnight ago. 

The suggestion reportedly irked Mogae and the rest of the board, save for Farouk Ismail, who then moved swiftly to have Ottapathu suspended.  Choppies board, which is constituted of seven member, including Ottapathu himself had majority to effect the decision, as only Ismail opposed the resolution.
“I came up with suggestions to the board at the request of the shareholders to have restructuring of the board; issues around chairman’s independence. This was not started by me, but when I suggested changes, some people in the board got annoyed,” narrated Ottapathu.

“They gave me an option, you resign now or we are going to suspend you.  I was not prepared to do that. This is the company I started, and they did not even have a replacement. Before I received my suspension letter it was on the social media.”

The Choppies chief said if it all the decision to suspend him has anything to do with personal vendetta, the decision to suspend him was not in the interest of the company.

“They have been reckless. They do not have the interest of the company at heart that one is for sure, because someone reasonably thinking cannot do this.” Ottapathu said one of the key reasons he wanted the board restructured was the verity that the company was growing, therefore creating necessity for change.

“This is one of the fastest growing company in the region. We needed retail or relevant experience in governance, and in the audit committee and in other areas,” said Ottapathu. “I did discuss with the chairman two years ago about relinquishing the power. He said give me time, I will think about it, and I will make the right decision. But he did not do that.”

Choppies was founded by Ismail in the 1980s and was joined by Ottapathu in 1992. Ever since then, the duo built the company into a dominant player in the country and the South African Development Committee (SADC) region. 
Ottapathu, Ismail and Choppies employees collectively owns 46 percent of the company stock. Institutional investors owns about 26 percent, while the rest is owned by the public.

Ottapathu is of the opinion that the Choppies board, which he said played no role in building the business, are behaving they way they do because they have nothing to lose.

“For them they have nothing to lose. They lose this position of board, they can sit in another board. I do not have any other thing to do in my life. I do not want another entrepreneur to have the same experience that is why I am going to fight it until the last end. I want to set it as an example to make sure it does not happen in another board room.”  



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