BULAWAYO – THE Choppies Group is seeking to cut loose its Zimbabwe partner, former Vice President Phelekezela Mphoko and his son Siqokoqela from the retail business and cites the recent moves to amend the country’s indigenisation legislation, as grounds for the renewed push for separation.

The matter has now spilled into the High Court in Harare.

Earlier this year, President Emmerson Mnangagwa signalled his intent to amend the indigenisation law which requires locals to have a majority stake in large corporations. He said this would now only be applicable to platinum and diamond mining – effectively freeing up foreign investors in the retail sector, like Choppies.

Choppies Group chief executive officer, Ramachanda Mottobat, this week said the retailer would not suffer any harm to either its local business or to its broader business operations in the southern African region stemming from the ownership wrangle in Zimbabwe. Choppies Zimbabwe has 34 retail outlets spread out across the country.

“Choppies operations will not get affected because we are in full control of the operation and they [Mphoko] were never involved, so operations will not get affected because we are in full control,” said Mottobat.

“The Mphokos were in reality given seven percent shareholding for free and the other 44 percent was a cover to adhere to the country’s laws. Now that the indigenisation laws have been relaxed, they should return the 44 percent.”

Choppies Zimbabwe is a division of the Choppies Group dually listed on the Johannesburg and Botswana stock exchanges. Choppies supermarkets have a presence in South Africa, Botswana, Zimbabwe, Zambia and Mozambique.

Choppies Zimbabwe is a partnership between Nanavac Investments, a company owned by the former Vice President and his son, Siqokoqela Mphoko, and the Choppies Group. The Mphokos hold a 51 percent stake and the Choppies Group a 49 percent stake in the business.

The strained relationship between the Mphoko family and the Choppies Group stems from a failed attempt made in 2014 by Festus Mogae, the former Botswana President and chairman at Choppies Group, to have former ruler, Robert Mugabe, waiver the country’s indigenisation requirements for the retailer.

Mottobat confirmed the meeting between Mogae and Mugabe this week; “It’s true Mogae went to see the former president Mugabe with a proposal that we be given a waiver, but it was not granted.”

Speaking to ZimLive.com at his Douglasdale home in Bulawayo this week, the former Vice President said he had agreed to go into business with the Choppies Group as he saw it as an opportunity to create employment in the country.

“They came to me and said they wanted to expand operations into Zimbabwe. As a senior politician in the country I wanted to see a growing economy. Maybe they thought I was a fool because later their behaviour showed that they thought they would exploit us,” he said.

Mphoko said his partners had to settle the ownership wrangle with documentation, if indeed the claim was that he did not own the controlling stake in the business.

“If that’s the case why doesn’t he (Mottobat) prove it with papers? In others words he is saying he acted on behalf of his investors to come into Zimbabwe with two arrangements with one above board giving us 51 percent, and another secret one giving us seven percent for free. He should provide proof and then face up with his investors.”

According to documents seen by this website, a loan of $20 million was given by the Standard Bank in South Africa to Choppies Group, with which the retail business in Zimbabwe would be funded. The loan was then extended to Nanavac as the Zimbabwean partner.

Siqokoqela said the loan was extended to them because they were the majority shareholders in the company. In 2015, he also signed for another $10 million from the same bank.

Currently, Choppies Zimbabwe is indebted to Standard Bank to the tune of only $2 million and has an arrangement to pay installments once every six months, he said.

Last week, Siqokoqela Mphoko was served with courts papers accused of “looting” cash from the retail business by his partners and swiping the cash amount using his bank cards. Siqokoqela denies the accusation and claimed all his dealings had received authorisation and were above board.

“It’s not like I took money away. I needed to pay for building material for my house in Hillside and I told the operations guys and my request was approved,” he said.

According to the court papers which cite Siqokoqela as the first respondent, he is accused of drawing cash up to the sum of $45,258 without authorisation.

“He also extended himself unauthorised lines of credit, which have seen him misappropriating the company’s stocks and fuel amounting to $6,687.06. He has also, without authorisation, transferred $, 000 from the company for his personal use,” part of the court affidavit read.

The Mphokos are being represented by top lawyer, Professor Welshman Ncube, and have vowed to fight tooth and nail to maintain what they insist is a majority stake in the business.