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
â€¨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.
This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.
“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.
Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.
A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.
Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.
A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.
Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.
In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.
The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.
In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.
Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.
The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”
In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.
Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.
The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.