Regional grocer, Choppies is pulling out of South Africa and has called for expressions of interest into the acquisition of its holdings.
The group's long standing chair and former president, Festus Mogae will also step down, the apparent culmination of boardroom disputes between himself and suspended CEO, Ramachandran Ottapathu.
According to its last available records, Choppies, a Fast Moving Consumer Goods operator in eight African states, had 88 stores in South Africa, mainly in the country's northwest platinum mining province. The group first entered South Africa in 2008 and rapidly built up its presence, with the stores accounting for 36% of Choppies revenues as at the half year to December 2017.
In a statement to the BSE this afternoon, Choppies announced it had already issued a request for Expressions of Interest to investors interested in taking all or part of its footprint in South Africa.
"The board has completed a strategic review of its South African operations and has concluded that exiting the South African market is the appropriate strategic decision," the statement reads.
Last November, the group was suspended from both its primary listing on the Botswana Stock Exchange and the Johannesburg Stock Exchange after failing to publish results for the 2018 financial year. New auditors, PricewaterhouseCoopers found historical irregularities in transactions, inventories and arrangements, leading to forensic and legal investigations, as well as further audit enquiries.
The board suspended Ottapathu in May on the basis of the preliminary findings of the forensic and legal probes, with the CEO launching and losing a High Court challenge. Ottapathu, popularly known as Ram, wanted the High Court to force the board to call an Extraordinary General Meeting where he had secured shareholder support for the ousting of the board.
Despite the robust revenues, South Africa is one of two locations Choppies has been facing market difficult conditions, with the downturn of mining operations in the North West hurting the group's bottom line. Choppies recently revealed it was looking for recapitalisation for its South African and Kenyan operations.
Meanwhile, Mogae, who was appointed Choppies chair in 2008, is expected to step down at the group's Annual General Meeting when the group's 2018 full year results are published.
Ram and Mogae were seen as close allies over the years, but fell out when the group ran into trouble. The suspended CEO publicly lashed out at Mogae and other non-executive directors accusing them of reaping millions off of Choppies over the years and trying to push him out, despite their lack of retail trade expertise.
Choppies is set to hold its Extraordinary General Meeting on September 4, 2019 where Ram is hoping to have three new directors chosen. The four existing non-executive directors have also put themselves up for reappointment.