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Choppies suspends CEO, restructures

It is evident that the Board of Choppies Enterprises Limited and its suspended Chief Executive Officer (CEO), Ramachandran Ottapathu are at loggerheads over a variety of issues that border on financial discrepancies and governance and this could result in a complicated separation of the two parties.

Before the suspension had effected Ottapathu noted that he had already engaged his lawyers to challenge his suspension from the regional grocer. The retail group is embroiled in a financial disarray after it failed to release its full year results last year, owing to previous audits and unreconciled numbers. The former President, Festus Mogae led board suspended the Choppies CEO on Wednesday and installed Farouk Ismail as Acting Chief Executive Officer. Ismail is the current deputy chairperson of the board.

According to a shareholder notice issued by the retailer on Tuesday afternoon, the decision to suspend Ottapathu comes following a board meeting on Monday May 20, 2019. "The board of directors of Choppies hereby informs the Choppies shareholders and the general public that, at a duly convened meeting of the Board held on 20 May 2019, the Board resolved to suspend from duty the Chief Executive Officer of the Company, Mr Ramachandran Ottapathu."

Ottapathu's suspension effected from Wednesday, May 22. Choppies did not say why Ottapathu was suspended but indicated that the suspension is amid legal and forensic investigations announced by the retailer on March 5, 2019. The board will take further action based on the recommendations of the investigation. "The legal investigation is anticipated to conclude by the end of May 2019 – having extended from the end of April 2019. The forensic investigation is anticipated to conclude by the end of June 2019."

In addition Choppies has appointed a chief restructuring officer – Redford Capital. "Redford is a South Africa based firm with over 25 years’ experience in providing business related services that include assisting its clients to resolve challenges and meet strategic and operational objectives," the notice read. As chief restructuring officer, Redford will review the Choppies business and identify action plans to improve the business,” the notice reads.

The JSE and the Botswana Stock Exchange has suspended the trading of Choppies' share as the company is yet to publish its financial statements for June 30, 2018. The retailer confirmed the shares remain suspended until the publication of results. The group fell 76% in one day on the BSE last September, before it was suspended from the Botswana Stock Exchange (BSE). BSE CEO, Thapelo Tsheole had expressed hope that the Choppies suspension will not be permanent. Choppies is one of Botswana's signature companies and one of the biggest employers.

RAM responds to his suspension


Responding to his suspension through a press statement, Mr Ramachandran Ottapathu noted, “I am disappointed by the decision made by the Board of Directors of Choppies Enterprises Limited (“Choppies”) (“the Board”) to implement the precautionary suspension of me as CEO, as taken on 21 May 2019.”

Ottapathu stated that he is the joint founder and major shareholder of Choppies and has committed years of his life to the Choppies business. “… and I have built a successful company in a competitive sector and market. I remain committed to getting the business back to where it should be for the benefit of all stakeholders, including the shareholders, staff, creditors and the business community in all the countries where the business operates.”  

He believes that his precautionary suspension is a consequence of personal differences with some members of the current Board; “and the actions of the same in initiating my precautionary suspension are as a direct result of my proposal to introduce a much-needed governance change within Choppies and the Board itself. I feel strongly that all my actions have been in the best interest of the Company and never considered any of my actions to be reckless or without the knowledge of the Board.”

Ottapathu said he has also been accused, but no evidence has been provided, of allegedly entering into certain transactions without properly disclosing them to the Board. “These transactions are the subject of a forensic and legal review by Choppies’ lawyers and consultants. I have been, and continue to be, fully supportive of this process and will continue to participate to the best of my ability to ensure this process is completed. I record that I did not make any personal financial gain from any of the impugned transactions.” 

Trading in Choppies’ shares is currently suspended on both the Botswana Stock Exchange and the Johannesburg Stock Exchange due to Choppies’ auditors’ refusal to sign the company financial statements until the investigations are completed.  “I deny any wrongdoing in relation to the allegations laid against me and have reiterated to the Board that all my actions have at all times been for the benefit of Choppies and its shareholders,” said Ottapathu.

“I have had an unblemished record while building and leading Choppies and I am proud to have created a national asset in Botswana, and have provided thousands of jobs and created wealth for the people of Botswana, South Africa and other African countries. I remain committed to Choppies and I am confident that I will be vindicated of any wrongdoing,” he wrote in his statement. 

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Business

Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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Business

Global CEOs Back Plan to Unlock $3.4 Trillion Potential of Africa Free Trade Area

23rd January 2023

African heads of state and global CEOs at the World Economic Forum Annual Meeting backed the launch of the first of its kind report on how public-private partnerships can support the implementation of the African Continental Free Trade Area (AfCFTA).

AfCFTA: A New Era for Global Business and Investment in Africa outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in entering and expanding in this area.

The report aims to provide a pathway for global businesses and investors to understand the biggest trends, opportunities and strategies to successfully invest and achieve high returns in Africa, developing local, sub-regional and continental value chains and accelerating industrialization, all of which go hand in hand with the success of the AfCFTA.

The AfCFTA is the largest free trade area in the world, by area and number of participating countries. Once fully implemented, it will be the fifth-largest economy in the world, with the potential to have a combined GDP of more than $3.4 trillion. Conceived in 2018, it now has 54 national economies in Africa, could attract billions in foreign investment, and boost overseas exports by a third, double intra-continental trade, raise incomes by 8% and lift 50 million people out of poverty.

To ease the pain of transition to its new single market, Africa has learned from trade liberalization in North America and Europe. “Our wide range of partners and experience can help anticipate and mitigate potential disruptions in business and production dynamics,” said Børge Brende, President, and World Economic Forum. “The Forum’s initiatives will help to ease physical, capital and digital flows in Africa through stakeholder collaboration, private-public collaboration and information-sharing.”

Given the continent’s historically low foreign direct investment relative to other regions, the report highlights the sense of excitement as the AfCFTA lowers or removes barriers to trade and competitiveness. “The promising gains from an integrated African market should be a signal to investors around the world that the continent is ripe for business creation, integration and expansion,” said Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum.

The report focuses on four key sectors that have a combined worth of $130 billion and represent high-potential opportunities for companies looking to invest in Africa: automotive; agriculture and agroprocessing; pharmaceuticals; and transport and logistics.

“Macro trends in the four key sectors and across Africa’s growth potential reveal tremendous opportunities for business expansion as population, income and connectivity are on the rise,” said Wamkele Mene, Secretary-General, AfCFTA Secretariat.

“These projections reveal an unprecedented opportunity for local and global businesses to invest in African countries and play a vital role in the development of crucial local and regional value chains on the continent,” said Landry Signé, Executive Director and Professor, Thunderbird School of Global Management and Co-Chair, World Economic Forum Regional Action Group for Africa.

The Forum is actively working towards implementing trade and investment tools through initiatives, such as Friends of the Africa Continental Free Trade Area, to align with the negotiation process of the AfCFTA. It identifies areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.

About the World Economic Forum Annual Meeting 2023

The World Economic Forum Annual Meeting 2023 convenes the world’s foremost leaders under the theme, Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information,

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Business

Electricity generation down 15.8%

9th January 2023

Electricity generation in Botswana during the third quarter of 2022 declined by 15.8%, following operational challenges at Botswana Power Corporation’ Morupule B power plant, according to Statistics Botswana Index of Electricity Generation (IEG) released last week.

The index shows that local electricity generation decreased by 148,243 MWH from 937,597 MWH during the second quarter of 2022 to 789,354 MWH during the third of quarter of 2022.

This decrease, according to the index, was mainly attributed to a decline in power supply realized at Morupule B power station. The index shows that as a result of low power supply from the plant, imported electricity during the third quarter of 2022 increased by 76.3 percent (123,831 MWH), from 162,340 MWH during the second quarter of 2022 to 286,171 MWH during the current quarter and Statistics Botswana added that the increase was necessitated by the need to augment the shortfall in generated electricity.

In the index Statistics Botswana stated that Eskom was the main source of imported electricity at 42.0 percent of total electricity imports. “The Southern African Power Pool (SAPP) accounted for 38.4 percent, while the remaining 10.1, 9.1 and 0.5 percent were sourced from Electricidade de Mozambique (EDM), Cross-border electricity markets and the Zambia Electricity Supply Corporation Limited (ZESCO), respectively. Cross-border electricity markets are arrangements whereby towns and villages along the border are supplied with electricity from neighbouring countries such as Namibia and Zambia.”

The government owned statistics entity stated that distributed electricity decreased by 2.2 percent (24,412 MWH), from 1,099,937 MWH during the second quarter of 2022 to 1,075,525 MWH during the third quarter of 2022. The entity noted that electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 85.2 percent during the third quarter in 2022 and added that this gives a decline of 11.8 percentage points. “The quarter-on-quarter comparison shows that the contribution of electricity generated to electricity distributed decreased by 11.8 percentage points compared to the 85.2 percent contribution during the second quarter of 2022.”

Statistics Botswana meanwhile stated that the year-on-year analysis shows some improvement in local electricity generation. Recent figures from entity show that the physical volume of electricity generated increased by 36.3 percent (210,319 MWH), from 579, 036 MWH during the third quarter of 2021 to 789,354 MWH during the current quarter. According to Statistics Botswana electricity generated locally contributed 73.4 percent to electricity distributed during the third quarter of 2022, compared to a contribution of 57.7 percent during the same quarter in 2021. This gives an increase of 15.7 percentage points.

 

The entity noted that trends also show an increase in physical volume of electricity distributed from 2013 to the third quarter of 2022, thereby indicating that there are ongoing efforts to meet the domestic demand for power. “There has been a gradual increase of distributed electricity from the first quarter of 2013 to the third quarter of 2022, even though there are fluctuations. The year-on-year perspective shows that the amount of distributed electricity increased by 7.2 percent (71,787 MHW), from 1,003,738 MWH during the third quarter of 2021 to 1,075,525 MWH during the current quarter.”

The statistics entity noted that year-on-year analysis show that during the third quarter of 2022, the physical volume of imported electricity decreased by 32.6 percent (138,532 MWH), from 424,703 MWH during the third quarter of 2021 to 286,171 MWH during the third quarter of 2022. “There is a downward trend in the physical volume of imported electricity from the first quarter of 2013 to the third quarter of 2022. The downward trend indicates the country’s continued effort to generate adequate electricity to meet domestic demand, hence the decreased reliance on electricity imports.”

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