Choppies Enterprises Exits Zimbabwe: Legal Issues Behind the Departure?

Choppies Enterprises Limited announced its plan to end operations in Zimbabwe, pointing to strong competition from the informal sector and other challenges. Siqokoqela Mphoko, son of former Vice President Phelekezela Mphoko, challenged this explanation, suggesting deeper legal issues are at play.

In a post on X (formerly Twitter), Mphoko criticized Choppies’ reasons for exiting, highlighting two ongoing court cases—HB 209/22 and HC1829/20. He claimed these legal matters are central to the company’s decision to withdraw. Mphoko stated, “Let’s set the record straight. The truth is in the letters and court cases, not just competition.”

One critical document addressed in his comments is a letter from the Reserve Bank of Zimbabwe (RBZ). Dated August 17, 2020, it raised concerns about share transfers between local shareholders and Choppies. The RBZ noted that the company failed to seek necessary approvals for the transaction, which violated Exchange Control regulations.

The RBZ’s letter confirms, “We have no record of the transaction where Mr. Phelekezela Mphoko and Mr. Siqokoqela Mphoko disposed of their 51% shareholding in Nanavac Investments to Choppies Investments of Botswana. This absence of authority violates Exchange Control regulations.”

Mphoko implied that Choppies may have violated currency regulations. He pointed out, “Buying foreign currency on the parallel market is illegal under the Exchange Control Act,” underscoring a potential regulatory breach.

Choppies has faced rising competition from informal businesses in Zimbabwe, especially in retail, where many vendors operate without licenses or taxes. This competition has made it hard for larger companies to thrive. However, Mphoko suggests that legal and regulatory issues may significantly influence Choppies’ exit more than the competitive environment alone.

This situation highlights challenges in Zimbabwe’s regulatory landscape, which affects foreign investment. As Choppies manages its exit, it must address these legal issues. The Zimbabwean government must also confront the informal sector’s role and its impact on legitimate business operations.