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Was the Choppies boardroom fight worth it?

A wise man once said when elephants fight it is the grass that suffers meaning that the weak get hurt in conflicts between the powerful. In most cases the elephants do not even notice the catastrophic consequences on the weak.

A year ago, the country witnessed one of the biggest corporate fights which involved the Choppies founding Chief Executive Officer (CEO) Ramachandran Ram Ottapathu and the then board that was led by former President Festus Mogae who was the Choppies Group Chairman. September is the anniversary of the historic Extraordinary General Meeting (EGM) that left Botswana in awe of unprecedented legal and corporate drama.

The fight was mainly catapulted by the suspension of Choppies from the local bourse and the Johannesburg Stock Exchange (JSE) on account of the companys auditors PwCs inability to finalize the 2018 financial statements due to alleged irregularities. This led to Ram getting suspended as the Choppies CEO and was immediately followed by an EGM where Ram won against the board that had suspended him.

For over a year the business stewed in quagmire during the CEO suspension. Value tumbled, millions evaporated in value. Business was torn apart in the court of public opinion. Its once grand and mighty appeal shrunk into oblivion.

A former states man was in one corner with the colossal Botswana Public Officers Pensions Fund (BPOPF) with other fund managers, Ram and his trusted lieutenants on the other. It was a true battle of corporates high and mighty.

On the 5th of September 2019 Ram was cast into a nightmare, a marathon of presentations had no Ram sympathizer. However how he won is still a mystery to many who had a cast of his entrepreneurial tombstone ready. Given where we are now, the company lost value. Huge expenses were incurred too as a result of a huge spike in board fees for the case – investigations, payments of consultants for forensics legal and financial, suspension of CEO with no clear retail experience in the board. Was it worth it?

Shareholders voted to oust almost all of the former board members, who had pitted themselves against Ram after a series of investigations into alleged business malpractices at the retailer.

The boardroom fight was epic to watch, it was even documented and packaged as a film documentary titled the Ram- fication but the result exposed a fundamental flaw in the strategy of the outgoing board. How could they lose after 10-hour long presentations to shareholders? Ram speech did not even last more than five minutes. Keith Jefferies is quoted in Rami-fication documentary saying that there is a growing demand for more from board members when they are performing their fiducial duties on behalf of shareholders for listed entities.

One might say they were quick to turn on Ram when it was convenient. Wy didnt institutional investors ask for a succession plan before the huge investments? Why would the allegations seem new yet they were murmurings on Choppies form the general public years before the investigations?

Giving expert opinion on a clip of the film documentary economist and former Deputy Governor of the Bank of Botswana Keith Jefferies stated that the board put too much reliance on Ram which is dangerous for a board to do especially on a big entity such as Choppies, the board put too much reliance on Ram to run the company single handedly, it is dangerous for a business to rely one person. Investors and shareholders should have been more active. Board members have a serious responsibility to hold management accountable and read documents thoroughly, said Jefferies who spoke of activist shareholders being a growing phenomenon of accountability.

Another economic expert who is a senior partner at one of the leading auditing companies in the country stated that the boardroom fight was not worth it mostly because it wasted the publics time and number of people lost their job in the process only for Ram to win the case against a board that had suspended him and had engaged a number of legal proceedings that found him innocent.

This expert opinion visibly shows what was not done, what needed to be done properly and who was not actively working when they were supposed to be. The question still remains, was the fight worth it after so much resources where utilized?

Some independent investigations and other experts revealed that Ram was suspended as a consequence of personal differences with some members of the board and retaliation for his proposal to introduce a much-needed governance change within Choppies.

With a fresh board Choppies has returned on the Botswana Stock Exchange (BSE). Succession seems to be on track. The hurt from the past may force the current board to dig deeper and ask the right questions on behalf of shareholders and Choppies business constituents. May be, just may be everything was for the right outcome. Ram will be measured in his expansion and ambitions and will not want to repeat the inconvenience and the shame that his business attracted. As the majority shareholder, he has a lot to lose and so do pensioners who are represented through institutional investors.

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BTC launches the 3rd Francistown Marathon 2024 and handover proceeds to the 2nd Francistown Marathon beneficiaries

8th December 2023

Botswana Telecommunications Corporation Limited (BTC) has announced that its 3rd Francistown Marathon will be held on Saturday 20th April 2024 at Obed Itani Chilume Stadium in Francistown. The BTC Francistown Marathon is officially recognised by World Athletics and a Comrades Marathon Qualifier will offer race categories ranging from 42.2km, 21.1 km, 10km, 5km fun run, 5km peace run for children and has introduced a 5km and 10km categories for wheelchairs athletics.

BTC also used this opportunity to announce beneficiaries who received donations from proceeds made from the 2nd BTC Francistown Marathon that was held on April 23rd 203.  BTC donated a play area, plastic chairs and wooden tables for pupils worth a total of thirty eight thousand, one hundred and three pula, fifty thebe each (P38, 103.50) to Monarch Primary School, Tatitown Primary School, Mahube Primary School and Gulubane Primary School. Ditladi and Boikhutso clinics each received a donation of benches, television sets and 10, 000 litre water tanks worth thirty seven thousan, eight hundred and ninety eight pula (P 37, 898.00). Additionally, BTC also donated seventy thousand pula (P70,000.00) to their marathon technical partner, Francistown Athletics Club (FAC) which will be used for daily operations as well as to purchase equipment for the club.

The BTC Francistown Marathon aligns seamlessly with BTC’s corporate social investment programme, administered through the BTC Foundation. This programme is a testament to BTC’s dedication to community development, focusing on key areas such as health promotion. The marathon, now in its third year, not only promotes a healthy lifestyle but also channels all proceeds to carefully chosen charities as part of BTC’s commitment to impactful and sustainable projects.

Speaking at the launch, the BTC Managing Director Mr Anthony Masunga stated that the marathon underscores BTC’s commitment to community upliftment and corporate social investment. He stated that “the annual event which has been in existence since 2016, having taken a break due to the covid and other logistical issues, is instrumental to the economic upliftment of the city of Francistown”. He congratulated all the beneficiaries for having been nominated to receive the donations, adding that “the donation of proceeds from the 2023 marathon aims to highlight BTC’s commitment and heart for Batswana and our continued impact in the different industries”.

He further stated that through this marathon, “we demonstrate our steadfast commitment to having a good influence on our communities, this event is a manifestation of our dedication to promoting education and a healthier, more active society”.  He concluded by stating that “BTC looks forward to another successful marathon that will leave a lasting positive influence on the greater Francistown community and the country at large” he said.

Giving welcome remarks, the Councillor for Donga, Honourable Morulaganyi Mothowabarwa stated that “he is ecstatic that BTC is collaborating with the City of Francistown on yet another installment of the Marathon”. He continued to offer his support to BTC to enable this marathon to continue over the coming years, stating that the “CSI element is a welcome development that helps empower our communities”, he said.

The 3rd BTC Francistown Marathon is officially open for registrations and athletes may use the following platforms to register and pay; through Smega by dialling *173# and choosing opton 5, then choose Option 3 for the Francistown marathon, at any BTC store or by visiting the BTC website and clicking on the BTC Francistown Marathon and choosing the relevant options.

 

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Letsholo lauds President Masisi’s digitization in fight against corruption

8th December 2023

Thapelo Letsholo, Member of Parliament for Kanye North, delivered a moving speech at the United Nations International Anti-Corruption Day commemoration, praising President Dr. Mokgweetsi Eric Keabetswe Masisi’s digitalization initiative in the fight against corruption. Letsholo highlighted the importance of embracing digitalization in governance as a crucial step in curbing corrupt practices.

According to Letsholo, the implementation of digital systems in government services can significantly reduce direct interactions between citizens and officials, which often serve as fertile grounds for corruption. By minimizing these opportunities for illicit activities, the efficiency and transparency of public services can be enhanced. Letsholo pointed to Estonia’s success in digital governance as an example, where public services have become more transparent, accessible, and efficient.

The MP commended President Masisi’s commitment to digitalization and E-Governance, emphasizing that it aligns with global anti-corruption standards. He called for full support and active participation from all sectors to ensure the success of this initiative.

Letsholo also stressed the importance of improving detection methods and refining whistleblower laws to effectively combat corruption. He highlighted the unseen and unspoken facets of corruption as its lifelines, emphasizing the need for robust detection mechanisms and a system that encourages and protects whistleblowers.

Addressing the societal role in fighting corruption, Letsholo focused on the crucial role of everyday citizens and civil servants who often witness corrupt practices firsthand. He acknowledged the existing reluctance to report corruption due to the perceived risks of repercussions. To change this narrative, Letsholo advocated for creating an environment where staying silent is deemed more detrimental than speaking out. He called for a cultural shift where the potential benefits of exposing corruption outweigh the risks, ensuring that whistleblowers are protected and feel secure in coming forward.

Letsholo called for collective responsibility and action in creating a system that not only detects and reports corruption but also supports those who stand against it. He expressed hope that under President Masisi’s digitalization initiatives, the future of governance in Botswana will be characterized by integrity, transparency, and accountability. Letsholo’s speech resonated with the sentiments of hope and determination that permeated the commemoration, emphasizing the need for unity in the fight against corruption.

In summary, Letsholo lauded President Masisi’s digitalization initiative in the fight against corruption, highlighting its potential to curb corrupt practices, enhance efficiency and transparency in public services, and align with global anti-corruption standards. He emphasized the importance of improving detection methods, refining whistleblower laws, and creating an environment where speaking out against corruption is encouraged and protected. Letsholo called for collective responsibility and action in creating a future characterized by integrity, transparency, and accountability in governance.

 

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FaR property assets value clock P1.47 billion

6th December 2023

FaR Property Company (FPC) Limited, a property investment company listed on the Botswana Stock Exchange, has recently announced its exceptional financial results for the year 2023. The company’s property asset value has risen to P1.47 billion, up from P1.42 billion in the previous year.

FPC has a diverse portfolio of properties, including retail, commercial, industrial, and residential properties in Botswana, South Africa, and Zambia. The company owns a total of 186 properties, generating rental revenues from various sectors. In 2023, the company recorded rental revenues of P11 million from residential properties, P62 million from industrial properties, and P89 million from commercial properties. Overall, the company’s total revenues increased by 9% to P153 million, while profit before tax increased by 22% to P136 million, and operating profit increased by 11% to P139 million.

One notable achievement for FPC is the low vacancy rate across its properties, which stands at only 6%. This is particularly impressive considering the challenging trading environment. The company attributes this success to effective lease management and the leasing of previously vacant properties in South Africa. FPC’s management expressed satisfaction with the results, highlighting the resilience of the company in the face of ongoing macroeconomic challenges.

The increase in profit before tax can be attributed to both an increase in income and effective control of operating expenses. FPC managed to achieve these results with fewer employees, demonstrating the company’s efficiency. The headline earnings per linked unit also saw an improvement, reaching 26.92 thebe, higher than the previous year.

Looking ahead, FPC remains confident in its competitiveness and growth prospects. The company possesses a substantial land bank, which it plans to develop strategically as opportunities arise. FPC aims for managed growth, focusing on consumer-driven developments and ensuring the presence of supportive tenants. By maintaining this approach, the company believes it can sustainably grow its property portfolio and remain competitive in the market.

In terms of the macroeconomic environment, FPC noted that inflation rates are decreasing towards the 3% to 6% range approved by the Bank of Botswana. This is positive news for the company, as it hopes for further decreases in interest rates. However, the fluctuating fuel prices, influenced by global events such as the war in Ukraine and oil output reductions by Russia and other Middle Eastern countries, continue to impact businesses, including some of FPC’s tenants.

FPC’s property portfolio includes notable assets such as a shopping mall in Francistown with Choppies Hyper as the anchor tenant, Borogo Mall located on the A33 main road near the Kazungula ferry crossing, and various industrial and commercial properties in Gaborone leased to Choppies, Senn Foods, and Clover Botswana. The company also owns a shopping mall in Mafikeng and Rustenburg in South Africa.

The majority of FPC’s properties, 85%, are located in Botswana, followed by 12% in South Africa and 3% in Zambia. With its strong financial performance, competitive position, and strategic land bank, FPC is well-positioned for continued growth and success in the property market.

 

 

 

 

 

 

 

 

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