At a Glance
- PwC declined to sign 2018 audit over irregularities, triggering trading suspensions on BSE, JSE.
- Choppies’ share price plunged 74.8%, erasing over $250 million in market value.
- Botswana regulators, courts, and executives launched investigations and legal action against PwC’s conduct.
In one of the most consequential corporate governance crises in Botswana’s financial history, a protracted audit delay by global accounting firm PricewaterhouseCoopers (PwC) triggered a catastrophic collapse in the market value of Choppies Enterprises, erasing over BWP2.44 billion ($253 million) in shareholder wealth in 2018.
The delay led to Choppies being suspended from trading on both the Botswana Stock Exchange (BSE) and the Johannesburg Stock Exchange (JSE), following PwC’s refusal to sign off on the company’s financial results for the year ended June 2018.
Audit impasse triggers multi-million-dollar fallout
As investor confidence plummeted, Choppies’ share price nosedived from BWP2.56($0.191) to BWP0.63($0.05), representing a 74.8 percent drop. This translated into a market capitalization decline from BWP3.26 billion ($242.18 million) at the close of 2017 to just BWP821.29 million ($61.06 million) during the setback.
This crisis at Choppies Enterprises was set in motion in 2018 when the company appointed PricewaterhouseCoopers (PwC) as its new external auditor. Shortly after taking over from KPMG, PwC said it uncovered series of significant accounting irregularities, including undisclosed related-party transactions, questionable bulk inventory accounting practices, and the presence of more than 100 previously unreported business entities tied to Choppies’ operations.
Citing an inability to obtain sufficient and appropriate audit evidence under international audit standards, PwC ultimately declined to issue an audit opinion on Choppies’ financial statements for the year ended 30 June 2018. This refusal prevented the company from meeting multiple regulatory deadlines for the publication of its audited results.
The consequences were swift and severe. With more than 1.3 billion outstanding shares according to its 2017 and 2018 reports, Choppies was automatically suspended from trading on both the Botswana Stock Exchange (BSE) and the Johannesburg Stock Exchange (JSE). The market reacted sharply to the lack of financial disclosure, triggering a 74.8 percent collapse in the company’s share price—from BWP2.56 to BWP0.63—and wiping out over BWP2.44 billion (approximately $253 million) in market capitalization.
The audit stalemate dragged on for more than a year, culminating in PwC formally resigning as Choppies’ external auditor in September 2019. The resignation came amid escalating tensions with company leadership and mounting scrutiny from shareholders and regulators.
Trading in Choppies shares on the BSE finally resumed on 27 July 2020, after the company released long-overdue audited financial statements for the years ended 30 June 2018 and 30 June 2019, as well as interim results for the half-year ended 31 December 2019. However, the damage had already been done—both to investor confidence and the retailer’s market valuation.
The drawn-out audit delay not only exposed deep-rooted governance failures within Choppies but also highlighted broader vulnerabilities in audit oversight frameworks across Southern Africa’s capital markets.
Executive backlash and regulatory scrutiny
The financial blowout led to the suspension of Choppies CEO Ramachandran Ottapathu, who was later reinstated after an independent investigation by EY cleared him of misconduct.
However, tensions escalated further when Ottapathu and Executive Director Farouk Ismail filed a lawsuit against PwC, seeking between BWP450 million($33.6 million) and BWP653 million($48.76 million) in damages.
The suit accuses PwC of deliberately delaying the audit to coerce Choppies into hiring PwC partner Rudi Binedell as CFO and offering him equity incentives—a move critics claim compromised audit objectivity.
Botswana’s High Court has taken a dim view of PwC’s conduct in the Choppies audit controversy, characterizing the firm’s alleged pressure tactics as a serious breach of auditor independence. The court has ordered PwC to file a comprehensive defense in response to accusations that it withheld audit sign-off in an attempt to secure executive-level positions and equity within the retail group.
Simultaneously, Botswana’s Accounting Oversight Authority has launched a formal investigation into PwC’s handling of the 2018 audit, aiming to determine whether the firm violated professional standards and contributed to the $250 million market value plunge at Choppies.
The scrutiny facing PwC in Botswana comes amid a series of reputational setbacks for the global audit firm across multiple jurisdictions.
In March 2025, the Financial Times reported that PwC had delayed capital repayments to recently retired equity partners in Hong Kong and mainland China—leaving several former partners without access to the capital they had contributed to the firm. These delays have highlighted financial pressures within PwC’s Asia operations and raised concerns about its internal governance.
Globally, the firm has come under increasing regulatory fire. In 2024, the UK’s Financial Reporting Council fined PwC £15 million ($19.3 million) for failing to report potential fraud at London Capital & Finance (LCF) ahead of the firm’s collapse, which cost British taxpayers hundreds of millions of pounds.
Earlier in 2022, UK-listed advertising group S4 Capital suffered a share price collapse of more than 40 percent after PwC delayed its audit, citing insufficient financial documentation and control issues—yet another example of how audit complications involving PwC have had direct financial consequences for listed companies.
Crisis underscores audit sector risks
The Choppies case reflects a broader crisis of confidence in the audit profession across global and regional markets. While PwC maintained it was upholding international audit standards, stakeholders argue the delay itself—regardless of motive—caused irreparable harm to the company’s valuation, reputation, and investor base.
For Choppies, the scandal prompted a comprehensive internal restructuring and intensified focus on corporate governance. Though the company’s shares were reinstated on the BSE in July 2019, the JSE delisting continues to cast a long shadow.
In the first quarter of 2025, the Gaborone-based supermarket chain led by Botswana retail tycoon Ramachandran Ottapathu, officially exited Zimbabwe after finalizing the sale of its 30-grocery stores managed under its wholly-owned subsidiary, Nanavac (Pty) Ltd, to Sai Mart, a local retail chain owned by Bulawayo-based businessman Raj Modi.
In its half-year 2025 report, profit margins came under pressure as gross profit margin dipped slightly by 10 basis points to 20.6 percent due to competitive pricing strategies in Botswana and Liquorama segments. Net finance costs dropped to BWP52 million ($3.9 million) as debt reductions improved the balance sheet, though higher lease interest from new stores limited those gains.
Together, these cases reflect a pattern of growing scrutiny and reputational damage for one of the world’s largest professional services firms, and underline the systemic risks that audit failures or delays can pose to companies, investors, and regulators alike.
Investor lessons and lasting implications
The PwC-Choppies audit saga serves as a stark reminder of the systemic risks that delayed disclosures pose to capital markets. It also underscores the importance of maintaining auditor independence, timely reporting, and transparent governance in safeguarding shareholder value.
As lawsuits proceed and regulatory reviews continue, the $250 million value wipeout stands as both a cautionary tale and a watershed moment in Botswana’s financial markets.
