Ram hits back at Choppies
Mbongeni Mguni | Tuesday August 27, 2019 18:44
Choppies goes to a decisive Extraordinary General Meeting next week, where essentially shareholders will have to choose between Ottapathu’s proposed directors and the current non-executives who suspended the CEO.
The pan-African supermarket chain was suspended from trading on the Botswana and Johannesburg stock exchanges last November after failing to publish its 2018 financial results. Legal and forensic probes commissioned by the board have since pointed the finger at numerous governance lapses at the group and laid the blame largely on Ottapathu, popularly known as Ram.
The board released summaries of the legal and forensic reports a fortnight ago, with an agreement that Ram would release his response by August 27.
In his response, published on the local and Johannesburg stock exchanges, Ram said the transactions noted as suspicious in the legal report were taken on the advice of lawyers retained by Choppies and approved by the board.
Desai Law Group (DLG), which prepared the legal report, used to be Ram’s lawyers and have since been retained by Choppies, which Ram argues is a conflict of interest in the investigation.
“The series of transactions ostensibly investigated and impugned in the legal report by Desai Law Group, were transactions on which Choppies and Mr Ottapathu received legal advice from Mr (Rizwan) Desai through Collins Newman & Co and later DLG.
“Mr Desai was involved in the planning, structuring, documenting, presentation for Board approval and implementation of these very transactions.
“Nowhere in the legal report is there any declaration of conflict of interest on the part of DLG nor indeed is there any mention of the roles of DLG and the board in the transactions in respect of which the legal report seeks to attribute sole responsibility to Mr Ottapathu,” the suspended CEO wrote.
On the forensic report, Ram said Ernst & Young, who investigated and prepared the document, had taken “excessive liberties with its assumptions,” arguing that the report’s fundamental premises were “flawed”.
“The forensic report fails to verify any of the information it received and failed to resolve any conflicting versions of facts presented to it. Instead, it simply ignored certain facts.”
The suspended CEO faces off against his non-executive directors on September 4, where shareholders will chose the directors they believe can lead Choppies out of its current troubles.