Inside Enrich’s chaos

MASERU – THE battle for Enrich Stores escalated yesterday with Maine Maine, the suspended chief executive, insisting that he is going nowhere.

The board has fired back, telling Maine that he will leave office whether he likes it or not. And so battle lines are drawn with a court battle highly likely.

The board was locked in an emergency meeting last night to discuss how to respond to Maine’s defiance.

While the board was discussing its next move Maine was conducting business at the shop as if nothing had changed.

Meanwhile, the company’s brand, once celebrated as a shining example of collaboration among Basotho, is taking a beating.

Shareholder value is evaporating as stock runs out while the board squabbles with the managing director. The more than 3 000 shareholders can only watch as their company faces imminent collapse.

But with the gloves off none of the parties is pulling out of the fight.

Last night Maine told thepost that the board members don’t care if the company collapses because some of them have very few shares and those who have many didn’t buy them but were given as donations by the shareholders for starting the company.

He said the board has been frustrating operations by refusing to approve contracts with companies that supply stock.

The result, he said, is that the company has run out of stock and sales have plummeted from a peak of M4 million a month last year to M2 million.

He said he is worried that if it accepts his suspension the company will collapse because “none of the directors know anything about the business’ operations”.

“In any case, the shareholders trust me because I am the one who persuaded them to buy the shares,” Maine said.

“These board members were elected by shareholders to look after the interests of the company but they are now spending their time fighting and sabotaging me as the chief executive instead of growing the company.”

“They just don’t care about the welfare of the company.”

Refuoe Monaheng, one of the shareholders who resigned as chief operating officer in February, told thepost that the board is aware of Maine’s defiance.

“That attitude is inappropriate and unethical. He was contracted by the board as an employee and he should abide by its decisions,” Monaheng said a few minutes before the emergency board meeting last night.

“He is not the chief executive because he is a shareholder and founder. He holds that position as an employee of the board.”

“The board will therefore take the necessary action to deal with the situation.”

Maine received the suspension letter on Tuesday.

The board accused him of failing to file for taxes on time, withholding rentals, making decisions without board approval and mismanaging the business.

The board repeated the same allegations at a press conference yesterday. Monaheng said Maine’s management borrowed M1.8 million to start a gym without the board’s approval.

He said they later took M700 000 from Enrich Stores, again without approval, to buy more gym equipment.

Monaheng said the board only read about the gym on social media and when they demanded evidence of the transaction Maine could not deliver.

He said the gym is now drowning in debt which has to be paid by the store.

“Currently, the gym is running low on funds and it sometimes fails to pay its rent.”

He revealed that the company has a M500 000 tax bill that the board did not know about. This, Monaheng said, is in addition to the M400 000 owed in rentals.

Maine however has a different story. He says he withheld the rentals after discovering that they were overpaying for their store.

He says he sold some of his shares to raise the M400 000 to help the company buy the additional gym equipment.

He alleges that after raising the money some board members tried to block the payment for the gym equipment. He then removed some of the bank signatories, approved the payment and submitted his resignation letter a few hours after the transaction.

Maine said his resignation was meant to scare the board but he discovered that they were actually happy that he had left.

“I then changed my mind, pleaded with the board to withdraw my resignation letter and they accepted,” Maine explained.

He traces his tiff with the board to two years ago when he and other founders were awarded free shares as compensation for their efforts.

“Some were not happy with that decision and they made it clear that they were opposed to the decision made by shareholders. They started fighting and frustrating me from thereon.”

He said the fights escalated in July last year when board members refused to sign a contract with a major supplier. Due to the lack of stock sales dropped from M4 million to M2 million in August.

“I told them that we were approaching the festive season and we still didn’t have stock but they ignored my pleas.”

In November Maine wrote to the board again, this time giving them an ultimatum.

“I said since they don’t want to sign contracts for us to get stock they should resign or allow themselves to be removed. I said if they don’t do either of those things I will tell the shareholders that they are the ones frustrating the business.”

“I knew that the shareholders would blame me if the business failed to perform. I am the one who brought all these shareholders and they want to see their company grow.”

Maine said after that letter three directors resigned within 12 hours.

He said matters came to a head in February this year when he accused the board of failing to report to the shareholders.

“I said they were failing the company because they had not submitted even a single report to the shareholder. That is what made them angry.”

He said he wrote that letter after the board refused to sign a contract with Pioneer Foods, a major grocery supplier from South Africa.

Maine said only the shareholders can decide his fate. He has called a shareholders’ meeting for April 8.

“I am looking forward to a fair judgment of shareholders, especially on the suspension matter,” he said.

“Even if the shareholders decide to take me out of the management I would not have a problem as long as it will be beneficial to the company.”

Refiloe Mpobole