Spar is in a dubious doghouse. Last week, the Supreme Court of Appeal shot down its special leave application to overturn a high court ruling over its ill-fated decision to cut off its biggest franchisee, the Giannacopoulos Group.
The court found that the decision was done in bad faith and left the Giannacopoulos Group wide open for Spar to swoop in and seize their stores over fears of loan payments defaults. The ruling stopped short of outrightly accusing the company of sabotaging the group, but handed extra weight to the Giannacopoulos Group’s R2bn damages lawsuit. In the Spar 2024 earnings report, the lawsuit popped up as a possible liability.
In 2019, Spar made the draconian decision to cut off the group, citing alleged labour law violation, disloyalty and other flimsy justifications. A particularly egregious move was Spar’s abrupt alteration of the credit and supplier terms. Timing is everything. The changes were made during the peak festive season, leaving the group with stock and fielding customer complaints.
The allegations are thinly veiled attempts to mask deeper, more personal vendettas. The Giannacopoulos Group argued that the real motivation behind Spar’s action stemmed from animosity between one of their own and two Spar directors. The appeal court judgment suggests Spar had no legitimate reason for these changes, implying a calculated effort to drive the Giannacopoulos Group out of business.
Spar should take a long, hard look in the mirror. Its corporate overreach and disregard for fair play are highly objectionable and ethically questionable.
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