The rags-to-riches story of a Greek family could amount to little because a multinational supermarket chain has allegedly used “devious” methods to kick them out of business.
The Giannacopoulos family feared that the 41 Spar stores they operate, 10 of which are in KZN, might be lost forever through the “clandestine” court action brought by The Spar Group Ltd.
Spar applied for ex parte orders at the Pretoria and Pietermaritzburg high courts respectively, which were granted on October 16.
Ex parte orders are usually granted on request of one party for their benefit, and Spar accused the Giannacopoulos family with bringing their brand into disrepute in their application.
Spar claimed that the family owned and managed Food Lover’s Market and OK stores, which is not permissible.
They were also accused of not complying with labour legislation and trading in expired goods.
But two days later, the family, who are represented by Saul Shoot of law firm Fluxmans Attorneys, denied those claims and got the decision of the North Gauteng High Court overturned.
They were also granted a costs order in their favour.
On the same day, the Pietermaritzburg High Court ordered Spar to hand back control of the family’s KZN stores, and also requested further affidavits from both parties for the continuation of the matter.
However, the Giannacopoulos family have since filed an urgent two-part application with the Pietermaritzburg High Court to overturn Spar’s decision to terminate their membership and have their status quo with the corporate giant reinstated.
Spar has 2308 stores in SA and has, over the years, developed inextricably linked agreements and contract documents, “on a take it or leave it basis”, which has been approved by the Spar Guild and Spar SA.
No Spar store can trade or access the company’s credit and other facilities without being a member of the guild, which is a governance and decision-making body comprising directors.
While the guild positions itself as a non-profit body, it is an intrinsic part of Spar’s business machinery.
The Giannacopoulos family were now relying on the courts to preserve their membership with the guild, which already spans 20 years.
Haralambous (Harry) Giannacopoulos deposed an affidavit on behalf of the family.
Giannacopoulos, his brothers Yianni and Chris and the various businesses the family controls, comprise the 17 applicants in the matter, while the guild and various Spar directors are among the 25 respondents.
Haralambous said his elderly father Kleomenis grew up as a goat herder in a rural village on a Greek island, did not attend school, but taught himself to write.
Having worked as a cleaner, Kleomenis and his family relocated to Naboomspruit, Limpopo, in 1993, where he opened a café.
Haralambous said he and his brothers have no tertiary education but got their business acumen from their father, the founder of their group of companies.
The family got their first Spar store in Empangeni and Kleomenis signed the agreement having not read or understood the documents content.
Haralambous said he and his brothers, over the years, also signed Spar agreements in “good faith”.
But their troubles with Spar began when Chris had a fallout with two directors based in Gauteng. Haralambous said the directors threatened to take control of all the family’s Spar stores and ruin them financially, about 18 months ago.
In terms of their agreement with Spar, members are permitted to use alternative suppliers of products that Spar SA offered, provided it was cheaper.
With Chris purchasing cheaper products elsewhere, it meant that Spar SA was losing rebates they earned from suppliers.
This resulted in the two directors performance bonuses being negatively affected and they responded by “spearheading a vendetta against Chris”.
In one instance, the directors allegedly orchestrated a smear campaign against Chris, where he faced sexual assault and other criminal charges, which received media coverage.
Haralambous said the charges eventually came to naught because they lacked merit.
He also claimed that at a secret Guild meeting in November last year, the two influenced other directors to have Chris banned and having no association with Spar.
But the Guild recanted that decision after receiving a written response from Shoot.
Haralambous emphasised that allegations that his family had flouted labour legislation and Spar rules made by one of the directors, were baseless and were the result of the dispute with Chris.
He said the alleged campaign to unseat the Giannacopoulos family from the Spar Guild gathered momentum thereafter.
They were informed in April that the guild was considering terminating the family’s membership and would be given an opportunity to make representation.
The guild then informed the family that they would be invited to a hearing, set for October 1 and 2, where their fate would be decided, but the hearing did not take place.
The guild apparently met secretly on October 15 and decided that the family’s membership be terminated on one month’s notice.
The next day Spar secured the ex parte orders, which received media attention.
Haralambous claimed that Spar did not make full and honest disclosures in the application, which he described as “unlawful and akin to looting”.
The outcome received media attention and he believes it was done to hurt the family’s reputation and resulted in banks substantially reducing their overdraft facility.
Upon receiving the order, Spar representatives together with sheriffs arrived at their various stores, which employs 2800 workers and requested keys to their premises and safes.
Haralambous claimed locks were broken and replaced, security officers at the 41 stores, contracted to the family, were dismissed and alarm and security camera systems were disconnected.
Cash and float were removed and allegedly not returned. Staff were informed that the Spar group had “taken over” and some of them were threatened with dismissal if they were not co-operative.
Spar then compelled staff to do stock takes, which Haralambous claimed were done haphazardly and resulted in the quality of goods, especially food items, being compromised and stolen.
He said Spar representatives brazenly consumed cigarettes, food, drinks and liquor items without paying. At one outlet, they had a braai outside with products taken from the store.
They also recruited staff previously dismissed by the family and made promises of substantial increases and benefits to staff.
This created an expectation, and when the family regained control, some staff staged protests and demanded that the promises be honoured.
When the ex parte orders were overturned, Haralambous said Spar drastically reduced the purchases repayment period and informed their banks that their membership was terminated.
He accused Spar with acting unlawfully and contrary to the values of “fairness and reasonableness” enshrined in the Constitution.
He said the contracts they signed were not in line with the principles of ubuntu, contract law and the Competition Act.
Haralambous denied that they flouted labour legislation and traded in expired goods.
He also said that they no longer had interest in a business that owned the Food Lover’s and OK stores, but they belonged to his sister Dimitra, who is not a member of the family trust.
Because the family’s livelihood depended on it, Haralambous asked that the court set aside the termination of their membership with the Guild and their status quo be reinstated.
Spar’s secretary Mandy Hogan said her company denied the allegations made by the Giannacopoulos family.
She said: “The relationship between The Spar Group LTD and the Giannacopoulos Group has not been acrimonious and Spar has endeavoured over the years to create a positive relationship.
“The Spar Guild of Southern Africa made a decision, after considering the evidence, to terminate the membership of the Giannacopoulos Group based on them bringing the Spar brand into disrepute.
"Spar places great emphasis on its values as a responsible South African retail brand. Adverse findings were made by the departments of Labour and Home Affairs against the Giannacopoulos Group which were in contravention of Spar’s principles which resulted in the termination of their membership.”