‘Mphokos paid no cent in Choppies business’

STAFF WRITER

In a shocking revelation laid bare in court, it has been claimed that the Mphoko family—led by former Vice President Phelekezela Mphoko (late) and his son Siqokoqela—paid no cent for their 51% stake in Choppies Zimbabwe, despite reaping millions from the business.

This explosive claim has ignited a scandal that exposes the deep flaws in Zimbabwe’s indigenisation law and the dark realities of corporate exploitation.

The Mphokos, granted control of a thriving retail business without any investment, were allowed to profit from Choppies’ operations while the company itself carried the full financial burden.

Choppies’ entry into the Zimbabwean market in 2013 was supposed to be a strategic move to expand its retail empire, but it soon became mired in legal battles, political manipulation, and scandal.

According to court papers from Choppies CEO, Ramachandran Ottapathu, the Mphokos were handed a majority stake in the company purely to satisfy the country’s indigenisation law, which requires businesses to be 51% locally owned.

However, the court papers reveal that the Mphokos did not invest a single dollar in the business, yet enjoyed all the benefits of ownership.

In 2012, Choppies was looking to expand its operations into Zimbabwe and was introduced to businessman Raj Modi, who wanted to sell his SPAR outlets in Bulawayo.

Impressed by the proposal, Ramachandran agreed to acquire the outlets, and thus Choppies Zimbabwe was born. But the company faced a significant obstacle—the indigenisation law. To comply, Choppies needed a local partner to hold 51% of the business.

This is where the Mphokos entered the picture. Ramachandran, who knew Siqokoqela Mphoko from work circles in Botswana, turned to him to fulfill the legal requirement.

According to court papers, Siqokoqela was financially struggling at the time, making him an ideal candidate to serve as the local partner.

However, Ramachandran made it clear that the Mphokos’ involvement was purely to meet the government’s legal requirement.

“I knew Siqokoqela from work circles in Botswana and at the material time, he was struggling financially,” Ramachandran said in an affidavit. The Mphokos became 51% shareholders, without paying anything.

To set up the business in Zimbabwe, Choppies invested US$66m, including loans. The Mphokos had no such burden.

“We must state from the onset that no cent was contributed by the accused or his father into the business and their presence was purely to comply with the country’s Indigenisation Law. His mere contribution was nationality as Zimbabwean”, Ramachandran said in court papers.

Siqokoqela’s job, Choppies said, was only to “build the good name and brand Choppies in Bulawayo and Zimbabwe.”

Despite contributing nothing, the Mphokos received lavish perks, according to court papers.

 Siqokoqela was given a salary of US$10,000 per month, a company car, fuel allowances, school fees for his children, and even his phone bills were covered. In addition to this, the Mphokos were entitled to 3.53% of Choppies Zimbabwe’s annual profits in dividends.

But Siqokoqela’s demands did not stop at this generous compensation. According to court documents, he began requesting even more benefits from the business, including groceries and cash.

His behavior led employees to believe that he was the actual owner of the business, not just a figurehead.

 He allegedly used his perceived power to intimidate workers, threatening them with dismissal or deportation if they did not comply with his demands.

Siqokoqela’s wife, Nomagugu, also became embroiled in the scandal. She was accused of withdrawing US$50,000 from the company’s POS machines, further deepening suspicions of financial misconduct. The Mphokos’ increasing interference in the day-to-day operations of Choppies Zimbabwe prompted the company to consider legal action.

In 2019, Ramachandran ultimately chose not to pursue fraud and extortion charges against Siqokoqela and his wife. However, his  court papers revealed a damning picture of how Zimbabwe’s indigenisation law had been exploited for personal gain.

 The Mphokos’ involvement in Choppies became a prime example of how political elites used their connections to benefit financially without contributing a single cent to the business.

Choppies now finds itself exiting Zimbabwe.

The company’s exit is tied to years of financial struggles, legal disputes, and an attempt to sever ties with the Mphokos, whose role in the company ultimately contributed to its downfall.

The case has brought to light the corruption and exploitation within Zimbabwe’s business environment, where political patronage allows the well-connected to profit at the expense of legitimate investors.

The Mphokos’ involvement in Choppies serves as a stark reminder of how the indigenisation law, rather than empowering local entrepreneurs, has been weaponized by political elites to extract wealth without any real contribution to the economy.

The Mphokos’ role in Choppies Zimbabwe, where they paid no cent for their stake but enjoyed all the perks of ownership, remains a troubling chapter in Zimbabwe’s corporate history.

The scandal underscores the depth of corruption and how political connections can be leveraged to secure wealth without effort or investment.

As Choppies exits Zimbabwe, the Mphokos stand as a symbol of the deeply flawed system that allows individuals to profit without paying the price.