Assets Transfer: Court Asks Shoprite To Prove Why Case Is Urgent

Police protect a shoprite store in Abuja amid protests against Xenophobic attacks on Nigerians in South Africa. Photo: Sodiq Adelakun/Channels TV
Police protect a Shoprite store in Abuja amid protests against Xenophobic attacks on Nigerians in South Africa on September 4, 2019. Photo: Sodiq Adelakun/Channels TV

 

The Federal High Court sitting in Lagos on Tuesday asked South African retail company, Shoprite Checkers (PTY) Limited, to show proof that its case seeking to vacate the injunction stopping the transfer of its assets abroad is urgent.

The vacation judge, Justice Nicholas Oweibo, also adjourned until September 7 for hearing after directing Shoprite’s counsel, Funke Adekoya, to file an application to that effect.

Shoprite had filed an application seeking the discharge of a Mareva injunction granted by the court on July 14, 2020, and stopping it from transferring its assets.

A Mareva injunction is a court order freezing a debtor’s assets to prevent them from being taken abroad.

The injunction was granted by Justice Mohammed Liman of the Federal High Court, Lagos in favour of a Nigerian firm, AIC Limited.

A file photo of a court gavel.

 

In 2018, the company secured a $10 million judgment against Shoprite in a breach of contract lawsuit and obtained the Mareva injunction against the backdrop of Shoprite’s announcement to pull out of Nigeria.

Shoprite has filed an appeal at the Supreme Court to challenge the $10 million judgment.

In the Mareva injunction, Justice Liman, however, restrained Shoprite “from transferring, assigning, charging, or disposing of its trademark, franchise and intellectual property in a manner that will alter, dissipate or remove these non-cash assets and other assets, including but not limited to trade receivables, trade payables, payment for purchase of merchandise, from within the jurisdiction of the court.”

The judge also mandated the second respondent, Retail Supermarket Nigeria Limited, “to disclose its audited financial statements for the years ending 2018 and 2019, to enable the judgment creditor AIC Ltd determine the judgment debtor’s funds in its custody in order to preserve same in satisfaction of the judgment of the Court of Appeal.”

At the proceedings on Tuesday, Adekoya who is a Senior Advocate of Nigeria (SAN) approached the vacation judge with an application seeking to set aside the Mareva injunction.

However, the judge said he needed to be convinced that the matter was urgent enough to warrant being heard during the court vacation.

We Are Only Expanding Our Retail Business In Nigeria, Says Shoprite

Police protect a shoprite store in Abuja amid protests against Xenophobic attacks on Nigerians in South Africa. Photo: Sodiq Adelakun/Channels TV
FIle photo: Police protect a shoprite store in Abuja amid protests against Xenophobic attacks on Nigerians in South Africa on September 4, 2019. Photo: Sodiq Adelakun/Channels TV

 

 

Supermarket retailer, Shoprite, has clarified that it is not leaving Nigeria but rather expanding its business in the country.

The South African retailer in a memo obtained on Monday by Channels Television, explained that the recent expansion move of the company will create room for more Nigerian investors who share in its vision.

According to the company, the move became important so as to “unlock” the potentials in the West African nation’s retail business, explaining that the best way to do such is by involving local investors.

READ ALSO: Air Peace Sacks Pilots, Slashes Salaries Up To 40%

“It has, however, become apparent that the best manner in which to do this is by engaging Nigerian investors who share in the same vision,” read the memo signed by the General Manager, Carl Erickson.

“In so doing, we would be creating a truly Nigerian business run and owned by Nigerians for the Nigerian market.”

Several potential Nigerian investors have been identified and all options are being explored to make the company’s move a reality, the memo further explained.

“Our experienced management, together with the new investors, will continue to build the business in Nigeria,” it added.

This comes as the company said when it reports its results for the year, Shoprite in Nigeria “may be classified as a discontinued operation.”

The company’s business in Nigeria posted a -6.3% decline in sales for the year ending June 2020, according to the update.

The company entered the Nigerian market in 2005 and its exit continues a trend of South African retail business struggling in Africa’s most populated country.

Shoprite in 2020,  said it wants to spend about $205 million on securing new locations in the West African nation and went on to spread its tentacles in many Nigerian cities.

Planned Shoprite Exit From Nigeria Triggers Mixed Reactions On Social Media

Police protect a shoprite store in Abuja amid protests against Xenophobic attacks on Nigerians in South Africa. Photo: Sodiq Adelakun/Channels TV
This picture taken on September 4, 2019, shows police operatives guarding a Shoprite store in Abuja amid protests against Xenophobic attacks on Nigerians in South Africa. Photo: Sodiq Adelakun/Channels TV.

 

Twitter was filled with mixed reactions and debate after news broke on Monday that South Africa retail giant, Shoprite plans to leave Nigeria.

Earlier, Channels Television reported that the company, which is one of Africa’s largest supermarket chains, had begun a formal process to exit – 15 years after it began operations in the country.

Shoprite explained in a trading update it published earlier that it took the decision following approaches from various potential investors.

It stressed that this was in line with its re-evaluation of the Group’s operating model in Nigeria, saying its business in the country “may be classified as a discontinued operation” when it reports results for the year.

READ ALSO: Shoprite Initiates Process To Exit Nigeria

According to the latest update, Shoprite’s Nigerian business posted a -6.3% decline in sales for the year ending June 2020.

The announcement to exit the comes about two months after another South African retailer, Mr Price, said it would close its Nigerian business.

However, the news of Shoprite’s exit has sparked various reactions from Twitter users, including Senator Shehu Sani who represented Kaduna Central senatorial district in the 8th National Assembly.

Shoprite dominated Twitter trends in Nigeria on Monday morning after the company said it would exit Nigeria.

 

While some Twitter users debated whether the government should be blamed for the decision taken by the South African firm, others gave hilarious reactions.

See some of the tweets below:

Shoprite Initiates Process To Exit Nigeria

Police protect a shoprite store in Abuja amid protests against Xenophobic attacks on Nigerians in South Africa. Photo: Sodiq Adelakun/Channels TV
Police protect a ShopRite store in Abuja amid protests against Xenophobic attacks on Nigerians in South Africa on September 4, 2019. Photo: Sodiq Adelakun/Channels TV

 

One of Africa’s largest supermarket chains, Shoprite, has begun a formal process to exit Nigeria.

In a trading update published on Monday, the South African-based company said the decision was made after “approaches from various potential investors, and in line with our re-evaluation of the Group’s operating model in Nigeria.”

The company said when it reports its results for the year, its business in Nigeria “may be classified as a discontinued operation.”

The company’s Nigerian business posted a -6.3% decline in sales for the year ending June 2020, according to its Monday update.

The company entered the Nigerian market in 2005 and its exit continues a trend of South African retail business struggling in Africa’s most populated nation.

Mr Price, another South African retailer, announced plans to close its Nigerian business in June.

In 2014, South African retailer, Woolworths, also pulled the plug on its Nigerian operation, citing high rents and duties, as well as marketing difficulties.

In 2012, Shoprite announced plans to spend up to $205 million on securing new locations in Nigeria.

The supermarket chain went on to spread its tentacles across most of Nigeria’s largest cities.

In 2016, the Nigerian economy suffered a recession, severely affecting consumer spending power and foreign exchange reserves.

In 2019, Shoprite stores were attacked in Lagos as part of reprisal actions for xenophobic-induced attacks against Nigerians in South Africa.

Shoprite’s expected closure in Nigeria comes amid the coronavirus pandemic, which has forced economies across the world into a slump and devasted entire industries.

‘Bad For Investor Confidence’

Head of Research at Afrinvest Securities, Abiodun Keripe, said Shoprite’s exit could have been precipitated by a number of factors.

“Nigeria is one of the economies that has a large consumer market and that’s why you find most of these retail brands trying to penetrate the Nigerian economy,” he said in an interview with Channels Television on Monday.

However, the country’s population doesn’t necessarily translate to increased purchasing power.

“In recent years, consumer purchasing power has fallen,” Keripe said. “It has been down significantly in tandem with weak economic growth since the last recession in 2016.

“The economy has been trying to crawl back up, but the growth has not been up to the historical average growth of about five to six percent.

“Since 2016, Nigeria has been growing at an average of about two percent every year, which is significantly low.

“And this speaks to consumer purchasing power, especially when you have a population growth rate outstripping economic growth rate. That means a larger percentage of the population is getting poorer.”

He added that Shoprite’s struggles in Nigeria could have been exacerbated by government regulation, including increased taxation and foreign exchange system.

“The last three to four months, the economy has been on a lock-down and not a lot of foot-soldiers have been going to the mall to shop,” he said. “People have been relying on online orders. That will affect their business model, which is designed around people coming in physically to the mall to shop.”

According to Keripe, Shoprite’s exit from the country will negatively affect the confidence of foreign investors.

“At this point, I don’t think there will be any major investor coming into Nigeria now, particularly when we have the foreign exchange risk hanging over us. That’s a major disincentive for now.

“We still have a large population base and growth, but how much can they consume? What is their purchasing power?

“If we compare this to some of our African peers, Nigeria still ranks significantly low.”

 

 

Xenophobia: Police Arrest Alleged Shoprite Looters In Lagos

 

Police authorities in Lagos have paraded suspected looters of Shoprite in the Lekki area of the State.

The police area commander of Shangotedo, Mr Gbolahan Olugbemi says between September the 3rd and 4th, a total of 125 suspects have been arrested in connection with the attack on Shoprite with 90% of the stolen goods recovered.

READ ALSO: Police Arrest 87 Suspects For Looting Outlets In Shoprite

According to the police, 112 of those arrested were found in possession of stolen items and have been charged to court.

Meanwhile, the Lagos state Governor, Mr Babajide Sanwo-Olu has also visited the looted shopping malls.

Police Arrest 87 Suspects For Looting Outlets In Shoprite

 

 The commander of the Police Rapid Response squad in Lagos has said that about 87 suspects have been arrested for looting various outlets of shoprite in the Lagos metropolis.

Mr Tunji Disu said 75 of the suspects are male while the remaining 12 are female.

He said they are currently being detained at the Lagos state taskforce office and will be transferred to the state criminal investigations department later on Wednesday.

According to him, the security situation in the affected areas are under control while officers from the Lagos state taskforce.

“The Rapid Response Squad, Anti Riot Mobile Police Unit, men drafted from operations department, the area command and all divisions around the area are working to ensure safety of lives and property in the area”.

Shoprite Showcases Made In Nigeria Goods

In line with the Federal Government’s push to buy, patronise and invest in locally made goods, Shoprite stores has opened an exhibition to showcase its goods which are now 80 per cent made in Nigeria.

Several entrepreneurs from across the country attended the exhibition which took place at the Ikeja City Mall.

Meanwhile, the management of Shoprite stated that they are committed to encouraging more production and patronage of indigenous products and booting SMSE’s in Nigeria.

Obiano Commissions Onitsha Shopping Mall In Anambra

Obiano Commissions Onitsha Shopping Mall In AnambraGovernor Willie Obiano, on Wednesday commissioned the Onitsha Shopping Mall in Anambra State, southeast Nigeria.

Commissioning the project amidst fanfare and celebration, Governor Obiano restated the major blueprint of his administration which includes trade and commerce.

He noted that his target was for the people of the state to begin to enjoy shopping activities in the best environment with quality and standard being the hallmark.

The Governor added that the mall, which already has heavy security presence, would have two additional Police patrol cars while the Ministry of Works would commence the construction of an exit route at the back of the mall for easy accessibility in and out.

Commissioning Shoprite Mall which is an anchor tenant, the Governor expressed hope that among other things, the mall would decongest the open market, break shopping traffic from Anambra to other states and attract more investors for increased revenue generation.

In his statement, the Development Manager of Capital Alliance, Osita Okonkwo, said that the project was a shining example of what could be achieved when a proper synergy exists between government and private investment partners.

Onitsha Mall is the largest retail shopping center in Onitsha and one of the most iconic malls in Anambra State and it was initiated by the immediate past administration.

Four Dead, 14 Injured As Tension Rises In Kano

JTF Raid kanoTwo explosions caused by two suicide bombers occurred in Kano on Monday.

The first attacker walked into a filling station in Hotoro, where people, most of whom were women cued for kerosene.

The Police Commissioner, Aderenle Shinaba, said that the bomber and two others died while eight sustained various degrees of injuries.

Shortly after, another female suicide bomber attempted to pass security check at Shoprite on Zoo road, killing herself and injuring six others including two policemen.

Kano State in recent days has been under tension after the discovery of explosives at Eid ground but the Police say it is still under high alert as few arrests have been made since recent attacks.

No group has claimed responsibility for the attacks.

However, the deputy governor of the state, Abdullahi Umar, who visited the scene of the blast, said the government was conscious and fully aware of the new techniques now used by the terrorists to attack innocent people.

Following the attacks, Sallah celebrations in Kano have suffered a setback as people are being cautious. Also, most recreational parks appeared empty as check-points have been set up within the metropolis.

 

MINT Countries: Nigerian Government Must Build Human Capacity – Economist

Financial Analyst, Pascal Odigbo, has called on the Nigerian Government to build its internal capacity in order to achieve its potential as one of the World’s emerging economies, tagged the ‘MINT’ countries.

The MINT countries, made up of Mexico, Indonesia, Nigeria and Turkey have been categorized as emerging economies that would become super powers by the year 2050.

Odigbo said that the World is always looking for the next big thing and the rationale for such projection was for investors to take position as the evaluation is based on the demographics in those countries.

He noted that this is a major pointer to the fact that other nations are showing attention to Nigeria. He said, “If you don’t have a I won’t call you.

“I think very strongly that there is absolute need for politicians to understand that this is not about personal gains but about our nation and our destiny” as this kind of declaration brings focus on what the country is doing and the world is watching.

He laid emphasis on ‘Potential’ using an analogy from the principles of Kinetic Energy in Physics. He explained that with the availability of power, one still needs to press a switch to light a bulb.

Therefore, with the world putting so much attention on Nigeria, “you need to know that you are doing something right, but now we need to be able to dimension it rightly.”

In analysing Nigeria’s potentials, he said that the strength of Nigeria is in its population, and this makes it a major ground for retail business, citing the successes of the many shopping malls that have sprung up in recent times in the country.

The ‘Sunrise Daily’ crew drew his attention to the dangers this may pose to the service and manufacturing sectors, and he agreed that things were wrong in those sectors but commended the Federal Government for its Automotive Policy which he sees as a step in the right direction towards improving the country’s manufacturing industry.

He however noted that the most important area was human development. He said, “We need to develop the people, we are putting so much into the assets rather than the people.”

He admitted that nothing was wrong with infrastructural development but it is counterproductive to build roads and other infrastructure without building the internal capacity of the people to work with these structures.

He pointed out that over a million students sit for the Joint Admission Matriculation Board (JAMB) examinations every year, but admission into the universities are available to about 500,000 people. He warned that Nigeria’s lack of human capacity would force foreign builders to bring their own people to man the country’s infrastructure, consequently leading to second slavery.

He added, “Most of the people in leadership, whether at state or local government level do not have a clue as to why they are there.”

“Government must begin to see this as a mission, developing a country is not in the mantra but in the things that you do. ”

Nigeria’s Economy Is A Reverse Of What Is Obtainable Globally- Economist

A lecturer from the Pan Atlantic University, Dr Austin Nweze today (Thursday) described Nigeria’s economy as the “reverse” of what is obtainable in other parts of the world.

Commenting on the increase of price on products and services during the Christmas period, Dr Nweze recounted his time as a student in Canada where “Christmas time is the best time to get things cheap; really really cheap”.

He said that there were usually so many discount, as “so many items are discounted just for the period” insisting that the end of the year should be “the best time to shop”.

He noted that in such climes, the Christmas period is regarded as “spending time” after saving from January to November period, which is regarded as “saving time”. He added that “even the stock exchanges feel the impact of the expenditures that go on during Christmas”.

He went on berating the discount tactic employed by retail and wholesale marketers in Nigeria.

“They will pretend to give discounts, but what they usually do is to increase the price first of all, and then (maybe) return it to a normal level or higher than the normal” maintaining that ‘’it is not supposed to be”.

Noting that a service economy is imperative, he berated the low impact manufacturing has made to the Nigerian economy which he pegged at 2.4 to 3 per cent compared to the United States of America’s 80 per cent.

Dr Nweze, quoting statistics from the International Trade Centre, said that by 2050, 80 per cent of the minimum global work force would be in services, which means “that you have to move from production to service” adding that “even when you are producing, you are also providing service; they work hand in hand”.

He further noted that Nigerians do not produce, he said “we consume too much” because “nobody is thinking of producing anything here,” a situation which he said also “extends to policy making”.

He advised policy makers to stop indulging in the habit of making policies that would not benefit the people because of the mode of operation used in implementing the policy. He said: “they make policies to encourage businesses, but they use the other hand to collect it back through interest rates”.

He said that if given the opportunity to run the economy, he would not “worry about inflation” but he would “make sure that the productive capacity of the nation; businesses are producing at the optimal level”.

He further said that he would look at other areas in the country and put in place a “factor-endowed based development strategy” to see what could be done to encourage production and manufacturing.

Shoprite Ramps Up Africa Expansion As Home Market Slows

Shoprite (SHPJ.J), Africa’s biggest grocer, is ramping up its expansion across the continent with 47 new supermarkets as its core South African consumer base grapples with high personal debt levels and growing fuel and transport costs.

Nearly half of South Africans failed to pay back their debts for three straight months this year, prompting banks to tighten their lending criteria, while a weaker rand currency fuelled inflation and higher petrol prices.

“It’s tough out there,” Shoprite deputy managing director Carel Goosen said at the presentation of the company’s full-year results.

Cape Town-based Shoprite, which reported an 11 percent rise in full-year profit that fell slightly short of market expectations, said it could double its stores outside of South Africa in the next four years.

Shoprite has 153 supermarkets in 16 countries outside South Africa. Those foreign outlets registered a 28 percent jump in sales in the 12 months to the end of June, nearly three times the rate of growth in its home market during the same period.

The bulk of the new stores would be in oil-rich Nigeria and Angola. The company sees scope for 44 new outlets in Nigeria and 21 in Angola in the next three to four years, Chief Executive Whitey Basson said.

After more than two years as an investor favorite, South African retailers are fast falling out favor due to concern that high personal debt levels and reluctance among banks to lend more will squeeze spending in Africa’s biggest economy.

South African retail sales grew by a smaller-than-expected 1.9 percent in June, data from the government statistics office showed last week. ZARET=ECI

Shares in Shoprite, which are down about 20 percent this year, gained 3.3 percent to 166.73 rand in what analysts said was a recovery from oversold levels and optimism that its Africa focus would help it ride a slowdown in consumer spending.

“In Shoprite, you have a company that’s still growing profits and paying dividends even in a tough environment and the results were not that far away from the consensus,” said Reuben Bleeders, an analyst at Cape Town-based Gryphon Asset Management.

The stock is trading close to its intrinsic value, according to Thomson Reuters StarMine valuation model, which takes into account the company’s most likely earnings trajectory over the next five years.

Shoprite posted an 11 percent rise in headline earnings per share to 675.4 cents in the year to the end of June, a touch below the 681 cents forecast in a Reuters poll of 11 analysts.

Headline EPS, South Africa’s primary profit gauge, excludes certain one-time items.

Sales rose 12 percent to 92.7 billion rand ($9.11 billion) and the company lifted its annual dividend by the same amount to 338 cents per share.