CAPE TOWN – No amount of pleading will create transformation and Tiso Blackstar, as well as other anti-transformation units, know this.
Tiso released a statement a few months ago claiming that the Public Investment Corporation (PIC) had asked Tiso to assist with managing Independent.
The PIC in a sharp retort released a public statement stating that Tiso had lied and it had, in fact, approached the PIC with the intention of acquiring Independent Media.
Sources within Tiso said if Tiso were to acquire Independent Media it would retrench two-thirds of its mainly black workforce and use Tiso’s current mainly white management to publish selected Independent Media titles. Sources confirm that at least three Independent Media titles would be shut down should Tiso succeed, and a merger of other titles would take place.
Black business leaders are appalled by this.
Kaya Cishe, founding member and secretary-general of the Black Business Chamber, said Tiso had launched a campaign against Independent Media chairperson Dr Iqbal Survé and the Sekunjalo group to prevent it from supporting the media unit and black business in South Africa.
Sello Rasatebha, the chairperson of the African Entrepreneurs Council described Tiso’s campaign as a criminal campaign designed to undermine democracy and taking advantage of the freedom of expression in the constitution. He said the attack on independent Media and Sekunjalo investee companies was a blatant attempt to influence public perception to aid Tiso’s sinister anti-transformation agenda.
Dr Dennis George, general-secretary of the Federation of Unions of South Africa (Fedusa), described the Tiso campaign as transparently obvious in its intent to destroy the character and business of Survé and the Sekunjalo Group. He described Survé as a transformative black businessman that has served to disrupt the business status quo, particularly when it came to investments in technology. “The current media campaign against Survé and Sekunjalo as disgraceful and toxic for media freedom in South Africa.”
Various business leaders and economists that Independent Media spoke to last week, said that it was unprecedented for a national weekly paper such as the Sunday Times to, on three consecutive weeks, lead with a story on Survé, a businessman, at a time of the electricity crisis and other major issues facing the country.
Moreover, a media analyst said that the Sunday Times and Business Day stories were a gross violation of the press code. “It is clear that Sunday Times, Business Day are working in concert with third parties to present information in a certain biased way. This is why mainstream media is no longer trusted by the public and is repeatedly accused of peddling fake news, the analyst said.
Analysts pointed out in recent times “that two large English-speaking media groups such as Tiso and Independent Media could not exist in a tough trading environment and would find it difficult to survive”.
Declining circulation and advertising, inflationary costs relating to staff, printing and distribution costs have meant that print media is in a battle for survival. In the case of Tiso, this is made worse by it having bank debt of more than R1.5 billion.
What has created an even bigger crisis is that the shareholders of Tiso including chief executive Andrew Bonoumour had bought shares from various parties including Caxton a few years ago for about R24 a share and the shares are currently trading at R3.50, which means that Tiso shareholders are struggling to make payments to their lenders, who gave them the money to buy the shares.
Tiso has a dual problem of significant debt owed by the company to banks plus debt to the lenders to buy shares.
What has largely gone unnoticed in the media issues around Independent Media and the PIC is that the PIC owns 25 percent of Tiso directly and through other asset managers such as Kagiso Asset Management. These shares, at the time of the Mvelephandha purchase, were R48 a share giving Avusa – Tiso’s predecessor – a market capitalisation of just over R12 billion with the PIC stake valued at R4 billion.
Today the PIC’s stake in Tiso is valued at R250 million. This is a far greater loss than what the Government Employees Pension Fund (GEPF) has had to write off with the R850 million invested in Independent Media. The Tiso stable has yet to publish this information yet it repeatedly focuses on Independent Media and the PIC.
Meanwhile, Independent Media compared to Tiso has no bank debt and the company is only indebted to shareholders who have a vested interest in the future of the company. Its shareholder debt is to the PIC, Interacom and Sekunjalo.
Contrary to media reports it is Sekunjalo that has been funding Independent Media for the last few years to help reposition the business and to ensure that it remains a viable business. Support to Independent Media is from other profitable investments of the Sekunjalo group portfolio of investments.
Analysts said after Tiso came to the sobering realisation that it would not acquire or merge with Independent Media – which was the original intention – it started a campaign to undermine the business of the Sekunjalo group so that Sekunjalo withdraws or limits financial support to Independent media.
Rasethaba said the hidden agenda of those who were attacking Independent Media and AYO Technology Solutions needed to be examined. “They are attacking the only Black Information Technology company of note listed on the JSE. They are daily writing and commenting about the financial situation at Independent Newspapers. Their tactics are akin to the US Tea Party movement.”
Cishe said: “It is really disheartening to learn how, in this democratic dispensation, some media companies can involve themselves is such a biased reporting.
He said it would be incorrect for the PIC Commission of Inquiry to fall into the trap of bowing to the undue pressure of being influenced by the media towards a direction that it was not set for.
Of note is that Amabhungane’s Sam Sole admitted at the end of his interview with SAfm’s Bongi Gwala that the PIC issue was not only about AYO but about probing various PIC Investment decisions.
Survé said that Independent Media and himself would resist all attempts vigorously to stop transformation in South Africa and ensure that the values of the Bill of Rights are protected.
BUSINESS REPORT ONLINE