Owners of 44 Spar shops go head-to-head with HQ.
Spar Group Ltd and the group of stores owned under the Spar banner by the Giannacopoulos family, are involved in a dirty war of words and actions that could eventually reflect on the share price of the JSE listed company.
The 44 Giannacopoulos-owned Spar shops, that employ close on 3,000 people, claim in documents submitted to the KwaZulu-Natal High Court in Pietermaritzburg, that there has been an orchestrated series of attacks on them driven by the Spar Guild of Southern Africa (an association of Spar shop owners) and Spar Group Limited.
Spar in turn accuses the family group of bringing the brand into disrepute because of the numerous and ongoing labour court cases brought against them.
But it seems as though even the Labour Court cases could be part of the onslaught because once the newspaper headlines have subsided, the outcome of Labour Court cases is often a much watered-down version of what was originally claimed and reported in the media.
The trouble started more than a year ago when Spar decided at a closed meeting to cancel the Giannacopoulos Group’s membership of its Guild. Spar then took over all the Giannacopoulos-owned stores on the back of an order obtained in the North Gauteng High Court, without prior notice to Giannocopoulos. After hearing the other side two days later as a matter of urgency, the very same court overturned the order and the stores were returned to the legal owners.
Shortly after the Guild lost in court they proceeded nevertheless to cancel the membership of the Giannacopoulos Group, who, when faced with the real possibility of losing their businesses, instituted a court action of their own against both Spar Ltd and Spar Guild, asking the court to overturn the guild’s decision because it would force them to close down their stores.
The case was set to start on 13 March in the High Court in Pietermaritzburg when it was postponed until late May.
In yet another move, Spar also changed the family group’s terms of trading from a 30-day to a seven-day credit line, claiming that the group was about to go into liquidation. They also kept the shops short-supplied of bread and milk.
“This meant our stores, that buy stock of around R40m per week from Spar warehouses, had to fork out R160m to honour the new terms of trading,” says Harry Giannacopoulos, one of three brothers in the family business. (They paid cash on the turn.)
|The Giannacopoulos owners; Harry (left), Kleomenis and Chris|
In an affidavit before court Harry Giannacopoulos says the dispute is the result of a personality clash between his brother Chris and Spar directors Desmond Borrageiro and Brett Botten.
“The real reason for kicking us out is money,” he says. “Our group is sourcing stock from suppliers other than the Spar Group, which we are entitled to do, but this has led to Spar losing revenue. The loss of revenue has negatively affected the performance bonuses of Borrageiro and Botten.”
But the fight with Spar is not the group’s only concern. Inspectors of the Department of Employment and Labour have been arriving almost daily at their stores to investigate alleged contraventions of the labour laws. At one point the police, inspectors from Home Affairs and the labour department raided 11 of their stores, and in February the CCMA hit them with eight arbitration awards totalling R12m.
These were granted without the group’s labour law attorney Mary Erlank being informed that the arbitration matter was due to be heard. The group then launched an urgent application in the Labour Court asking for a review and a stay of payment of the R12m. The judge ruled in their favour as Noseweek went to press.
The Giannacopoulos family, on a more personal level, has had to deal with house robberies, death threats and extortion. Aggressive social media campaigns, even aimed at their young children, have forced them to obtain court interdicts and restraining orders against the ringleaders of about 60 disgruntled former workers who are staging ongoing protest action at the family-owned stores in Gauteng, North West and KwaZulu-Natal.
The protesters have recently joined hands with the Economic Freedom Fighters (EFF) but are allegedly being steered by the Hartbeestpoort Community Development Initiative (HCDI), a non-profit company based in Schoemansville in North West. Its chairman, Mmeli Mdluli, is one of the people against whom the family has obtained a restraining order.
Mdluli says it is clear his organisation is a threat to all businesses that do not adhere to labour laws and the Constitution.
“Right now the EFF is at the companies’ head office in Sinoville, Pretoria where they will close them down today,” the 47-year-old told Noseweek during a phone call, not short of big talk about his organisation’s ability to trigger the red overalls into action, in order to once again cause chaos at Spar and Tops stores owned by the family group.
Mdluli introduces himself as the HCDI’s human rights ambassador on the letters he has written to government ministers and heads of departments, complaining about alleged human rights abuses by the Giannacopoulos brothers. But in spite of the ambassadorial title there is no sign of diplomacy when his cronies protest at the stores. They focus on a specific shop, scare off the staff, the customers and the passing public, lock the doors and even take hostages, all seemingly without any consequences.
The ringleader’s first lieutenant is Daniel Ademulegun, a former Spar employee who was fired after he allegedly failed to report for work in March 2019. Noseweek has established that Ademulegun tried to lodge his case at CCMA offices in three provinces and in all instances the case was dismissed.
Ademulegun lives in Richards Bay and it seems as though the Nigerian has made it his mission to try and trash the Giannacopoulos group. In a verbally abusive and convoluted reply to questions from Noseweek, he says he has contacted the relevant law enforcement departments to start investigations based on evidence he supplied.
When asked about his role in the on-going dispute between Spar and Giannacopoulos Group, Ademulegun said Spar had invited him to present his evidence of how the family runs their business and treats their staff. Some of this evidence was also forwarded to Noseweek in response to what Ademulegun called our “suspicious, malicious and biased questions”.
We received 19 screenshots of WhatsApp conversations on chat groups named “Manager group” and “Spar managers group” but there was no proof that the messages and names were indeed authentic.
Last year the Giannacopoulos family obtained an urgent high court order to confiscate Ademulegun’s phones and shut down his defamatory WhatsApp groups and Facebook pages where death threats were made against them. A professional data analyst has since compiled a 60-page report that shows who Ademulegun contacted and where some of his money came from.
According to the report, Spar senior legal advisor Gordon Pentecost and the MD of Spar North Rand distribution centre Desmond Borrageiro, were members of the chat groups, “Anti Giannacopoulos Match” and “The Whistleblower Hotline”.
The report states that Pentecost received and read 1,621 messages and, while he never participated in the conversations, he also never disagreed or denied any of the highly inflammatory statements made against the Spar Group and the Giannacopoulos-owned stores. In one conversation on the chat group Ademulegun tells someone that he had received money from Pentecost.
Pentecost and Borrageiro did not reply to questions but Ademulegun told Noseweek the money he received was for travel costs.
However, the collusion between Spar, the Department of Employment and Labour and Ademulegun can clearly be seen in a WhatsApp message from Edward Khambudi of the Department of Labour, who asked Ademulegun about annexures to which his memorandum referred.
Ademulegun answered that he had asked Gordon Pentecost to share the annexures with Khambudi. “This included statements from South Africans of this slavery in our land by the Giannacopoulos family. Let me ask Spar to assist.”
The following is a conversation on WhatsApp between Ademulegun and someone called Brightness:
Ademulegun: “Spars in Empangeni and Spars in Richards Bay, why are we not telling customers this is hippopotamus meat they are eating?”
Brightness: “Shall I post it now or [is] it already posted [?]
Ademulegun: “Now, now comrade, wake up! We are saving South Africans’ lives”
Brightness: “Post on your Facbook now. Let [’s] start to win.”
In response to questions sent to Mdluli this was presented as fact to Noseweek and one of several accusations that he made against the Giannacopoulos family.
“Evidence of game meat such as hippos, zebra, kudu, wild pig and giraffe was circulated by workers from Empangeni in 2019. This game meat is processed and sold to unsuspecting consumers.”
Giannacopoulos lawyer Mary Erlank responds: “Harry (Giannacopoulos) has a permit to sell game meat as such. To suggest that has included giraffe and hippo is ridiculous.”
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