In relation to the court case between the Southern African Clothing and Textile Workers Union (SACTWU) and Independent Media Consortium (IMC), we would ask the media to please take note of the following facts so as to avoid relying on uninformed opinion when writing articles on this matter:
1. In 2013, the Independent Media Consortium (IMC) was formed to purchase Independent Media from its Irish owners.
2. IMC was at the time known as Sekunjalo Independent Media (SIM).
3. SIM/IMC was a special purpose vehicle (SPV). This SPV was completely separate from Sekunjalo Investment Holdings (SIH/Sekunjalo) thus had nothing to do with Sekunjalo.
4. The SPV would own 55% of Independent Media in exchange for the consortium’s financial consideration.
5. This stake in Independent Media is the consortium’s only asset.
6. IMC included union groupings such as COSATU’s investment arm, Kopano, the military veteran’s association, MKVA and several women’s groups and black business groupings as well as community organisations.
7. For the investment consideration of R150m, SACTWU requested to be part of the IMC, which would provide an effective 8% shareholding in IMC.
8. SACTWU through its SACTWU Investment arm duly transferred the R150m.
9. IMC’s investment into Independent Media was fully secured by Sekunjalo.
10. When the final agreement was signed, SACTWU requested to change the equity into a loan of R150m, having suffered a severe setback as a result of a failed investment in Trilinear where they lost R400m.
11. Additionally, SACTWU also committed a further R250m+ investment, the purpose of which was to establish a dedicated workers publication. SACTWU reneged on this commitment.
12. SACTWU’s reasoning for its investment in Independent Media was to ensure that workers had a share of voice as to issues relating to them, and to bolster its existing other media investments, which included its shareholding in Hosken Consolidated Investments (HCI)– owners of eMedia holdings, which include e.tv, eNCA, Open View HD and eSat.tv.
13. It is worth noting that HCI’s founder is Johnny Copelyn, also a former general secretary of SACTWU and a member of Parliament.
14. In 2017, André Kriel, general secretary of SACTWU, signed an irrevocable undertaking to convert its shares in Independent Media to shares in Sagarmatha Technologies.
15. SACTWU received 18 million shares worth an investment value of R700m.
16. The transaction was funded by Sekunjalo through a vendor financed transaction.
Other investments that SACTWU has with Sekunjalo that have yielded returns for SACTWU include:
- Receiving 12 million shares in Ayo Technology Solutions (AYO) at the time of the ICT company’s listing in December 2017.
- Shares were allocated at R1.50 per share amounting to a total cost of R18m, which was initially covered by Sekunjalo.
- These shares had a street value of R500m – nearly three times that of their investment in IMC.
(De)Merits of SACTWU’s case:
- In suing IMC, SACTWU’s action also includes action against other IMC partners such as Kopano, black empowerment women’s groupings and NGOs.
- Andre Kriel, as General secretary of SACTWU, signed for the initial contract with IMC for a stake in Independent Media – this contract is not in question therefore it is assumed he had the designated signing power to enter into any and all contracts, including the Sagarmatha and AYO contracts.
- Andre Kriel’s signing of the agreement constitutes a contract: An offer can be defined as a proposal constituting specific terms for one party to enter into an agreement with another party, which is essential to the formation of an enforceable contract. A valid contract requires an offer to be accepted. The requirements of an offer are that an offer must be made with
- Acceptance is an agreement to the specific terms of an offer. Offers do not have to be accepted through words, they can be accepted through conduct. The acceptance must normally be communicated to the offeror, silence cannot be treated as an acceptance. A good example can be a letter to accept an employment offer. The Requirements of acceptance are
- Further, that in swapping shares out of IMC for a stake in Sagarmatha, there can be no case in its entirety since it no longer has any rights in Independent Media.
Independent Media Consortium is firmly of the belief the courts will rule in its favour and has full confidence in the power of the law of South Africa to uphold said law.