Charges filed against Spar execs in latest case over 'false' claims in court

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  • Criminal complaints of fraud and perjury were filed against three Spar executives.
  • This relates to alleged misrepresentations in court amid a bid from Spar to take over certain supermarkets, which was unsuccessful.
  • This is just the latest allegation against the group, whose business practices and governance have recently come under the spotlight.
  • For more financial news, go to the News24 Business front page.

Fraud charges have been filed against three senior executives of Spar, amid allegations that the grocer falsely claimed in 2019 it was owed money in order to gain control over certain supermarkets.

This is just the latest blow for the JSE-listed retailer, which is also facing off with one of its store owners in Johannesburg amid allegations it inflated the price of a store, though the group strenuously denies wrongdoing. The governance of the company also under scrutiny after Graham O’Connor became Spar chair in March 2021, a month after retiring as CEO, which is at odds with the King Code's recommendation of at least a three-year break.

The civil rights group AfriForum said in a statement its private prosecution unit had helped Chris and Harry Giannacopoulos and their family’s group of companies, the Giannacopoulos Group, file criminal complaints of fraud and perjury against these executives in Gauteng. Further complaints will soon be filed in KwaZulu-Natal, it said. 

Spar said on Thursday it was unable to comment, as it had not seen the formal complaint.

The Giannacopoulos Group owns a group of 13 companies that operate 45 Spar supermarkets and Tops liquor stores in three provinces. The JSE-listed Spar is a warehousing and distribution business which owns several country licences for the Spar retail brand. The brand is used by a network of independent retailers who trade under its brand and are supplied on a voluntary basis through its distribution centres. As of its 2022 year, the group had a network of just over 2 500 stores in southern Africa, while also operating in Switzerland, Ireland and Poland.

It is alleged that Spar, through its executives, falsely claimed in affidavits in 2019 that companies in the Giannacopoulos Group owed it money in order to convince the courts to grant Spar control over the supermarkets owned by the companies. 

Two of the implicated parties who filed affidavits in the legal matters in 2019 are Spar’s managing director Desmond Borrageiro and chief executive Brett Botten, AfriForum's statement reads. O’Conner signed certificates of balance in support of summonses. "The alleged misrepresentations – attributed to ignorance by their legal team – have been admitted by some of the suspects and described as an 'honest and unfortunate mistake'," alleged AfriForum. "More executives will be implicated when another case is filed in KwaZulu-Natal."

In the court applications filed in Pretoria and Pietermaritzburg in 2019, the Giannacopoulos Group has alleged that there were false statements made about development loans, while its retailer membership had been terminated without a promised hearing.

"Acting on orders obtained from the courts and based on the alleged misrepresentations, the Spar Group in 2019 immediately took steps to take over the stores. Only after a successful urgent court application by the Giannacopoulos Group were the businesses returned to their control," AfriForum said.

Nel said on Thursday AfriForum had been briefed to monitor the matter and consider private prosecution should the National Prosecuting Authority fail to pursue the matter. 

Spar's shares were down 2.06% at R134.06 in afternoon trade on Thursday, when Shoprite was down about 0.8%, but Woolworths and Pick n Pay had managed modest gains. Spar's shares have fallen almost a fifth in 2022.

Click here for details on Spar's shares as well as other info.

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