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Ram TKOs Mogae & Co in Choppies boardroom bout

Publishing Date : 10 September, 2019

Author : TSAONE SEGAETSHO

Suspended CEO Ramachandran Ottapathu this week managed to claim back his company after he was sidelined by the board for four months. Ram also got the blessings of shareholders who have a composition of more than 50 percent as he brings new faces to the Choppies board and gets re-elected to serve as a director. With the board which was against him gone, Ram also stands a big chance of getting reinstated as CEO.


A Choppies boardroom could have been mistaken to a wrestling ring in few meetings prior to the Extraordinary General Meeting (EGM); a lot of war of words akin to arm grapping. The Choppies boardroom brawl which started few months had all the hallmarks of power play and ended this week with less bonhomie as the suspended CEO Ramachandran Ottapathu emerged the last man standing despite being against all odds. 


Prior to the EGM Ram had proposed a clean-up of the company’s board, maybe bring new faces. “It is the combined view of Mr Ottapathu and the Board that the current Board requires strengthening by inclusion of additional independent non-executive appointees to it. It is for this reason that the Board (including Mr Ottapathu), have put forward the Proposed Resolutions, to allow the Shareholders to elect a strengthened Board (whether it includes current Directors or not) which will direct the proceedings and affairs of the Company going forward,” said circular seen by this publication last week.


In this week’s EGM, Ram had his wishes done as the board was changed and new faces, especially the ones he proposed, were brought on board save for Oabona Michael Kgengwenyane . Ram had proposed that Kgengwenyane, Tom Pritchard and Carol-Jean Harward be added as new faces to the Choppies board.


The shareholders backed Ram’s two choices, making a resolution to vote for Pritchard as a director of Choppies with 77.75 percent against 22.22 percent. Haward was added to the board with 51.25 percent against 48.72 percent.  Kgengwenyane, proposed by Ram, was rejected by shareholders with 98.13 percent votes against him. Ram got 52.06 percent while and Ismail 55 percent.


Four of the previous board members chief financial officer Heinrich Stander, Wilfred Mpai, Dorcas Kgosietsile and Ronald Tamale failed to pass the 50 + 1 threshold and have subsequently stepped down from the Choppies board. Mpai made 47 percent of the votes, Kgosietsile 5.8 percent, Tamale 48 percent and Stander 48 percent. A choice proposed by certain institutional shareholders, Kenny Nwosu, could not pass the threshold too, with 48 percent of votes.


Before the EGM, on Sunday the outgoing Choppies board had met and decided that the EGM be adjourned for two weeks pending Ram’s disciplinary hearing. Ram is yet to face a disciplinary hearing for his suspension. Despite the anti-Ram board seeking to have the EGM postponed, the shareholders rejected the directors wish moving chairman Festus Mogae to approve voting of new board members.


Ram’s triumph

When Ram was suspended he was against the whole Choppies board, save for his friend and longtime business partner Farouk Ismail. Ram was being investigated, accused of mismanaging Choppies affairs and usurping the board in many decisions concerning the company.
Towards the EGM, it was all odds against Ram. His attempt to have an urgent EGM failed as the board stood against him. Even at the recent EGM the board had come with a spirited campaign to have shareholders disregard Ram. A legal report and a damning forensic report, both putting Ram’s managerial competence on the spotlight, were released.


When presiding on the EGM, Mogae gave Ram and his legal representative less than 30 minutes to respond to allegations leveled against the suspended CEO. This is despite the anti-Ram board taking almost the whole day presenting their grievances about Ram.
Mogae admitted that as the board they wanted to remove Ram as a CEO while he remains as a shareholder. He said they were getting tired of Choppies being all about one man, Ram. The former president gave a scenario of Choppies revolving around one person who would usurp the board in decision making.


“We tend to fight as to who is more important and who has more money. Choppies has been a disaster,” said Mogae as he tried to convince shareholders to adjourn the EGM. Mogae who was part of the ousted board that suspended Ram has announced that he will retire after the Annual General Meeting which is billed for November this year. The shareholders were not convinced by the Mo Ibrahim Award winner who said the suspended CEO was not doing things proper but rather decided to vote for Ram to remain as a board member. Mogae’s wish to have the EGM adjourned was also rejected by the shareholders.


Ram who stood before the shareholders, admitted to doing some things wrong, but said he was being scapegoated by the board. While he promised to wait for the disciplinary hearing so that he can clear his name, said he learned his lesson. "Well, mistakes were made and lessons have been learnt….I can tell you that this will not happen again in our lives. This company is great, we can make it greater," the suspended CEO told shareholders this week during an EGM.


Prior to the EGM, Ram only had Ismail’s back. The two together with Choppies employees hold about 46 percent of the retailer’s stake. He is currently faced with a forensic report findings, which he (Ram) called “not conclusive”, painting him as corrupt and lacking adherence to good governance. A legal report said Ram has dealt improperly when doing many business transactions like the acquisition of Pay Less and the transactions involving Fours Group.


All odds seemed to be against Ram given the damning information produced against him at the EGM but he was saved by shareholders who have a composition of about 53 percent of Choppies shares. The shareholders also want Ram to go before the disciplinary hearing to clear his name.


The aftermath of EGM – resignations


Meanwhile after failing to make it back into the Choppies board of directors at the Emergency General Meeting (EGM) on Wednesday, Chief Financial Officer (CFO), Heinrich Mathiam Stander decided to resign on Thursday. His resignation was handed to interim Chief Executive Officer (CEO) Farouk Ismail on the same day. The understanding is that after he was voted out of the board, he then decided to further resign as an employee of Choppies.


Stander received a vote of 48 percent at the EGM hence failing to clock the 50+1 mark. Those who could not get 51 percent or more were removed from the board.  Indications are that those voted out, were considered to have been on Mogae’s team, and wanted suspended CEO, Ramachandran Ottapathu to face disciplinary hearing, but failed. Mogae has since indicated that he is retiring.

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