Shoprite Zambia Review: Outlook and dividends

MINORITY shareholders of the Lusaka Stock Exchange (LuSE) listed Shoprite Checkers have taken up legal action against Africa’s largest retailer for failure to pay them the 2011 and March 2012 dividends, the Zambia Daily Mail has learnt.
The legal action was taken out on the retail giant – with 18 outlets in Zambia – last week on Thursday after Professor Patrick Mvunga’s law firm was engaged by the 250 Zambian minority shareholders to act on their behalf.
The minority shareholders are complaining that while their South African counterparts had been paid for the duration in question, the giant retailer for unknown reasons chose to allegedly not pay them in direct violation of the Zambian Securities Act on the equal treatment of shareholders of a company listed on the bourse.
This is the second time Shoprite is appearing in the news for all the wrong reasons after its billionaire chairman Christo Wiesel – one of the richest men in the entire world – was stopped by security at an airport in London for being illegally in possession of some 670,000 pounds or K5.5 billion in cash against United Kingdom laws that prescribe that a person can only carry 1,000 pounds.
Mr Wiesel, who is eyeing Nigeria as he spreads his wings and rolls out shops – in addition to his current 78 outlets – said he was carrying the hard cash for tax purposes.
The company employs about 1,000 people in Zambia presently in its 18 outlets spread over the country but the 250 shareholders are not even sure on whether they have shares in Shoprite South Africa as they were told when they bought Zambian shares.
This matter of holding shares in both Shoprite Zambia and South Africa is also in contention.

My view on this matter is that this spectacle is really dampening shoprite's prospects as a retail stock in zambia because there is a high chance investors will not get their dividends when they invest which raises its risk profile.Investors are looking for stable dividend payouts and fair value stocks.

As for the LUSE index it still shows Shoprite trading at K55,000 ..fairly flat during the year reaffirming the fact that this spectacle may not be inciting investors to sell given shoprite's price but rather just collect dividends owed to them.
 Shop rite has always been a favourite retail stock of mine but given that over the recent short term it hasnt shown any decent growth and dividend payouts are risky I wouldnt consider it a buy right now.