The Mphoko family, which had claimed it owned 51 %of the Choppies business in Zimbabwe, has now come to an agreement with the Botswanan supermarket chain and exited the business.
A reminder of what the issue was: Choppies in Zimbabwe is operated by Nanavac Investment (Pvt) Ltd, a Bulawayo-based business. The company was owned 51% by former Zimbabwe Vice President Phelekezela Mphoko and his son Siqokoqela Mphoko. The need for a Zimbabwean shareholder came about because Zimbabwe’s Indigenisation Act requires Zimbabwean nationals to own at least 51% of businesses. Because the Mphoko family did not provide any investment for the Choppies Zimbabwe, there was an additional shareholders’ agreement showing that Choppies Enterprises owns 93% of Choppies Zimbabwe (aka Nanavac Investment (Pvt) Ltd).
The battle for legal control had threatened to get ugly, with both sides standing much to lose by letting things drag on. Phelekezela Mphoko, a long time ally of ousted President Robert Mugabe, lost of the political support he needed to force a win. Choppies had a strong incentive to make the issue go away and reassure shareholders all was OK.
As such, both sides have now issued a joint statement:
“We have been instructed by our clients, Choppies Enterprises Limited and the Hon Phelekezela Mphoko and Mr Siqokoqela Mphoko to advise the public and all staff of Nanavac Investments (Pvt) Ltd, trading as Choppies Supermarkets Zimbabwe, that the shareholders and directors of Nanavac Investments (Pvt) Ltd have amicably resolved and settled all issues, matters, cases and disputes between them and amongst themselves so that there are nolonger any outstanding issues between our respective clients, who further advise that the Mphokos have disinvested from Nanavac Investments (Pvt) Ltd trading as Choppies Supermarkets in Zimbabwe, and have no further interests in the company and its business.”
We don’t know what Choppies Enterprises had to pay the Mphoko family to resolve the issue but we suspect it may not have been a punitive sum. Ongoing legal action threatened to drain the Mphoko finances and the currency crisis currently affecting Zimbabwe and leading to severe shortages meant that now was a bad time to ask for a premium on shares in supermarket chains.