The BBS saga: Did Molefe take a page out of Ram’s book?
Recent events at BBS Limited were almost a point-by-point replay of what happened at Choppies when Ram courted shareholders to oust board chair Festus Mogae and his band and proceeded to appoint people of his own choice to the board who returned the favour by installing the battering ram of Botswana’s retail sector back as CEO. Staff Writer KITSO DICKSON reports on the cruelly of how Pelani Siwawa-Ndai had to preside over her own demise while Pius Molefe must have struggled not to show his glee
There is something eerily familiar about BBS MD Pius Molefe’s victory against his ousted board that was chaired by Pelani Siwawa‐Ndai at last week Friday’s dramatic Annual General Meeting (AGM). It is something extremely relatable that took place two years ago. Fight for control. Bloated egos. Vanity.
Much as the debate about who was out of line between the BBS old board and the MD, the public is keeping an eye on the developments as corporate wars continue to be a plague on Botswana’s corporate firms.
The tale of last week’s events at BBS almost mirrors those that happened back in 2019 at Choppies. Somehow, but not least because we followed the Choppies saga closely, we knew how it would end: in tears for Ndai. Just as it did with former board chair of Choppies, Festus Mogae and his colleagues, at the retailer’s Extraordinary General Meeting (EGM).
Mogae knew then what Ndai knows now. That when shareholders are used to fight back, it matters not who is right or wrong. The Brink family holds a 17.3 percent stake in BBS. They are even more powerful than institutional shareholders such as Botswana Privatisation Holdings and Botswana Police Savings and Loans Guarantee Scheme, which have 14.9 percent and 9.2 percent shareholding respectively.
Believe it or not, much as he is being celebrated, there are some who still feel the MD of BBS was out of line and there are those who believe everyone should go. But the new board, which is made up of appointees of the MD and the Brink family, does not think so. These are shareholders who sided with the MD. The ultimate story of Molefe’s glory was when he was reinstated as MD.
This is the story of a cast of characters who redefined how battles are fought and a reminder that when shareholders fight back, the stakes go high. The tale resembles the one that was cleverly orchestrated by Choppies CEO, Ramachandran Ottapathu (Ram), when he also used shareholding to muscle out the board and install a new one of his choice that backed him fully. You’d be forgiven for thinking that Molefe and Ram have been exchanging notes of how a CEO can fire his employer. Ram would have been a proud teacher, afterall.
Ahead of the AGM, Molefe knew how it would end. But there was a scare when the meeting almost didn’t take place. The board argued that it was not constitutionally called, given that some shareholders did not receive the notice of meeting. But when Ndai and Co tried to involve the court, a key shareholder, the Brink family, sought and obtained a court order to proceed with the meeting. It became obvious on whose side the shareholders were as fear suddenly marked the faces of Ndai and her colleagues.
Perhaps at that point, Molefe was joyed. He didn’t come this far to lose. Management of BBS and a key shareholder were reportedly the ones who put forward the names of the now new board as nominees. This is the board that ultimately lifted the suspension of Molefe this week.
Infact, this is where the saga all began in the first place. The board had initially felt that the management was doing their own process ahead of the AGM which did not involve the board when it came to nominating new candidates for election to the board. But it is important to note that some of the terms of the board members were ending in April. However, they were entitled to offer themselves up for re-election. They failed the test because of an acrimonious fight for control with the MD who was allegedly close to the Brink family. Some nominees, like Duraiswamy Kalyanaraman, are reportedly representatives of the Brink family.
Voting results issued by BBS this week show that Kalyanaraman, Lebole Mokoto, Bernard Mzizi, Colm Patterson and Victor Ramalepa managed to pass the test at 68.35 percent, 67.79 percent, 68.44 percent, 68.49 percent and 67.75 percent respectively. Ndai, who chaired the proceedings, failed to be re-elected after scoring 32.19 percent. Michael Tlhagwane, who was also seeking re-election, scored 31.58 percent. James Kamyuka, Richard Molosiwa, Kgalalelo Monthe also failed to secure re-election, tallying 31.49 percent, 31.51 percent and 32.27 percent respectively.
It was a cruel end of the road for Ndai who had to preside over her own demise and a mighty victory for Molefe who must have struggled to hide his glee at the sight of defeat for his adversary and her entire band.
While the old board had appeared to challenge the AGM, arguing that the meeting was unconstitutional, it seems they have now accepted defeat. It’s a new dawn at BBS with the new board setting aside the suspensions of Molefe with immediate effect. Board chair Mzizi says they reached this position after considering and receiving legal opinion on the issue. Mzizi has assured shareholders and other stakeholders that his board has full confidence in Management.
The MD returns with his right hand man Sipho Showa, the Company Secretary & Head of Marketing and Communications, who has always stood by him and who was also suspended.
Mzizi says the board “looks forward to working with them in the coming days to restore confidence in the business by engaging with shareholders, customers, investors, and other stakeholders. Communication in this regard will be shared with the relevant parties”.
This harks back to days after Ram used his shareholding to elbow out Mogae and his team from the Choppies board and also had his own people lift his suspension. The return of Ram as CEO was as good as done when the elected board of Choppies - which was made up of appointees of Ram himself - met and considered reappointing the immortal phoenix after he was suspended by Mogae and his band.
Ram and his bosom buddy Farouk Ismail held 34 percent of Choppies. Those close to developments say at the EGM, Ram said there was a 13 percent shareholding held by family and friends. Ram had also been busy canvassing for votes, which is said to have given him a glut.
Using his shareholding, Ram ensured that the board which he was fighting were voted out at the EGM. Wilfred Mpai scored 47.90 percent, Dorcus Kgosietsile 5.8 percent, Ronald Tamale 48 percent, Heinrich Standar 48.6 percent and Kenny Nwosu (nominee by institutional investors) 48 percent. After his colleagues failed to pass the required threshold, Mogae resigned with immediate effect, right there at the EGM. Botswana former president must have been a sorry sight as Ram struggled not to smack his lips.
Of all those seeking reappointment, only Ram and Farouk succeeded.Ram scored 52.06 percent, Farouk 55 percent. There were three nominees proposed by Ram himself. Using his shareholding, he managed to appoint two - Tom Pritchard with 77.75 percent and Carol Jean Howard with 51.2 percent. The Choppies board went into its first meeting comprising Ram, Farouk, Pritchard and Howard. Perhaps to return the favour, the board wanted Ram back as CEO. Days ago at BBS, perhaps also returning a favour, Mzizi and colleagues similarly wanted Molefe back.
As a mopping-up operation, Mzizi says the board decided that through the BBS Limited’s legal advisors Armstrong Attorneys, the former Board of Directors should be requested to submit all records of BBS Limited Board Minutes for insertion in the Minute Book and other records, including correspondence and round robin resolutions generated during the month of April 2021 as they are official BBS Limited records in line with its constitutive documents and the Confidentiality Agreements previously signed by each of the former and continuing directors respectively.
“BBS Limited legal advisors Armstrongs Attorneys have also been requested to seek a detailed report from Bookbinder Business Law on legal costs incurred by the former Board of Directors,” he says, adding that the mandate of Bookbinder Business Law in respect of all matters relating to the recently held 2020 Annual General Meeting has been terminated forthwith.
This episode is a reflection of power struggles that have come to characterise Botswana’s corporate world and is an alarming development of the present times that will hopefully make way for a proper corporate culture of probity to take root.