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M&G goes to war after Survé rejects title bid

Mail & Guardian had offered to by these titles from Indipendent newspaper.photo by Simphiwe Mbokazi 8

Mail & Guardian had offered to by these titles from Indipendent newspaper.photo by Simphiwe Mbokazi 8

Published Aug 26, 2013

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Johannesburg - A nasty spat has arisen between the Mail & Guardian (M&G) and Iqbal Survé, the chairman of Sekunjalo Independent Media Consortium, which recently bought Independent News & Media South Africa for R2-billion.

The Mail & Guardian was incensed after Survé refused to sell to its chairman, Trevor Ncube, and his funders, three flagship titles in the group, Business Report has learnt.

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They had proposed that Survé sell to them the Pretoria News, The Mercury and the Cape Times.

This past Friday, the newspaper vented its anger at the rejection of Ncube’s offer by running articles saying that Survé allegedly implied in a telephone interview that the Mail & Guardian was funded by the US Central Intelligence Agency. Ncube has denied this.

Another article said the 20-percent stake in the consortium bought by two Chinese companies and the make-up of the rest of Survé’s consortium had raised questions about media independence.

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Ncube started courting Survé just before the transaction between Sekunjalo and the Dublin-based Independent News & Media, the immediate former owners of Independent Newspapers, was to be considered by the Competition Commission.

Implied in Ncube’s offer was a veiled threat that if Survé did not consider selling the three titles the competition authorities might block the Sekunjalo-led consortium’s acquisition of Independent Newspapers.

Detractors of Survé hoped the transaction would not be authorised by the regulator.

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In the hope of broadening the scope of their business, Ncube and Hoosain Karjieker, the chief executive of the Mail & Guardian, made an unsolicited bid to Survé in an undated letter, which was forwarded to him on May 16.

Initially, the two had made a verbal offer to Survé for the three titles but he insisted that they must put the offer in writing, according to people familiar with the matter.

In the letter, a copy of which is in the possession of Business Report, the two express their ambition to extend the scope of their media business from the current weekly publication of the Mail & Guardian to include various additional titles.

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But the letter makes no mention of how much Ncube and his funders were offering for the three flagship titles.

Independent Newspapers is the biggest English-language newspaper publisher in the country, with 18 titles, among them Business Report and IOL.

Ncube and Karjieker said they enjoyed the support of potential funding partners, particularly the Media Development Loan Fund (MDLF).

That MDLF is now called the Media Development Investment Fund (MDIF). It owns 10 percent of the Mail & Guardian and 39 percent of Ncube’s Alpha Media Holdings (AMH), which owns four Zimbabwean newspapers.

The MDIF says on its website that it is a mission-driven investment fund for independent news outlets in countries without a free press.

Asked why the MDIF was investing in the Mail & Guardian, which operated in a country with a free press, Karjieker said: “This is clearly one of a number of factors they take into consideration when making investment decisions of this nature.”

Ncube said the MDIF provided an interest bearing finance facility to AMH. “There are fixed terms and conditions applicable to the loan finance.”

AMH made monthly repayments to service the loan funding, he said.

Survé said on Friday: “These guys are being vindictive because I said no to them. The fact that I said they must put the offer in writing did not mean we would sell to them.”

Subsequent to the rejection of the offer, Nic Dawes, who was the editor of the Mail & Guardian until the middle of the month, led a campaign under the banner of the South African National Editors Forum (Sanef) to have the commission extend its scrutiny of the Sekunjalo bid for Independent Newspapers because of a lack of information about funding, the identity of Survé’s consortium and its shareholders and concerns about independence.

A petition circulated by Sanef, which at the time was chaired by Dawes, also said “the company has a monopoly in the English-language newspaper markets of Cape Town and Durban, as well as arguably Pretoria and Kimberley” and because of that “serious scrutiny of its plans” was required.

But when the campaign raised the ire of outside observers and staff members of Independent Newspapers, who were not contacted about the matter, Dawes decided to back off, saying in a June 4 statement that “while we will not be pursuing formal engagement with the Competition Commission, we look forward to further discussion with Dr Survé and other stakeholders on these matters”.

The latest revelations will serve to underscore concerns that Survé has raised in recent months.

He has consistently claimed that there was something sinister about the criticism and the scrutiny that competitor newspaper groups directed toward his purchase of Independent Newspapers. - Business Report

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