The Sekunjalo Group, an investor and shareholder in one of South Africa’s largest media houses, Independent Media, has set the record straight regarding its support for its media investment.
The Group also welcomed the settlement reached in the matter between the PIC and Ayo Technology Solutions Limited.
This is in light of an internal memo to Independent Media staff that was leaked over the weekend, and the recent announcement of the settlement.
The Group said there had been “been great confusion caused by certain aspects of the media and a concerted effort to conflate the two entirely independent organisations and their situations”.
“As an investor and shareholder in both AYO and Independent Media (IM), the Sekunjalo Group (Sekunjalo Investment Holdings/Sekunjalo) has also been drawn into the maelstrom and so we would like to take this opportunity to clear the air and make our position known,” Sekunjalo Group said in the statement.
The PIC-AYO Settlement
“The Sekunjalo Group welcomes the recently announced settlement between the PIC and AYO.
“The amicable agreement, as well as the media statement from the PIC indicating they will work together with the management and board of AYO to grow the company, is excellent news and in the best interests of all stakeholders, especially investors such as pensioners of the Government Employees Pension Fund (GEPF) whose monies the PIC manages.
“The Sekunjalo Group (Sekunjalo) is now happy that this challenging chapter is behind AYO, so that its management and board can focus on growing and unlocking AYO’s value and continue its transformation of the South African ICT sector, as was always intended,” it said.
Independent Media
“Sekunjalo, through its subsidiary Sagarmatha, is an investor in several media companies in South Africa and on the African continent. One of those investments, is Independent Media.
“Sekunjalo invested in IM in 2013, as part of a black consortium, along with its other media assets, for the following reasons:
- To broaden the ownership of media in South Africa to include black people in the economy;
- To return ownership of IM to South Africa;
- To ensure that the IM narrative is aligned to that of the emerging economy and the stories of the oppressed black majority;
- To ensure there is a diversity of opinion;
- To ensure that globally, the news and content from South Africa receives the correct and proper context in the international news;
- To ensure IM deepens media freedom and diversity of voices in South Africa;
- Using Independent Media as an important vehicle to convey our shared values and ethos of social justice;
- To ensure IM participates in media for social change projects;
- To grow the employment base for journalists in the South African media industry.
“Together, our media assets represent a combined employment base of some 1500 personnel,” the statement continued.
Investment in Media
“Sekunjalo has invested nearly R3 billion in overall media and media related assets – alone and as part of a consortium. Over and above this, Sekunjalo itself has specifically invested a significant sum approaching R1.2 billion over the last almost decade to support IM through its challenges.
“For the record, Sekunjalo’s other partners in IM – historically the PIC and the Interacom Investment Holdings consortium — have not invested any further funds into IM, other than at the initial stage of the acquisition.
“The initial investment from Sekunjalo, the PIC, union investment groupings, and the Chinese all went to pay the Irish (the previous owners) for the investment. Since then, it has only been Sekunjalo that has contributed to IM whereby other consortium shareholders benefited, and for the following reasons:
- In the early stages, to assist IM to establish distribution networks;
- To navigate IM’s software issues;
- To terminate unnecessary and exorbitantly priced leases;
- Expand printing presses and the publishing business, and into vernacular titles as well as community publications - all done exclusively by Sekunjalo.
“The Sekunjalo Group has not only invested directly in cash in IM and its associated entities, but also provided other group support through its various entities totals to date around R1.2billion.”
Sekunjalo said it did this because it was, and remains committed to employment and media freedom. “We continue to believe that South Africa’s democracy is safest in the hands of diverse media outlets and not just a narrow pool of narrative,” it said.
Independent Media Realignment
Sekunjalo has responsibility to all its businesses, the Group said, which employs some 8500 employees and supports more than 40 000 dependants.
“However, as the principal funder/investor in Independent Media, Sekunjalo informed the management team of IM several months ago, that whilst it had supported the company from inception, and through many external and unforeseen challenges, Sekunjalo cannot continue to support the company without IM itself, taking the necessary steps to become self-sustaining,” Sekunjalo said.
These challenges have included the COVID period, the July unrest, South Africa’s ongoing load shedding, inflation, and importantly, through SAPPI’s monopoly as the sole provider of newsprint, hiking its prices by 30% to 100% over the last few years.
Independent Media makes up less than 3% of Sekunjalo’s overall investment portfolio, the Group said, “but notwithstanding this, we have committed to support Independent Media in the short term, subject to a comprehensive restructuring plan. We have also asked the management team to engage with its employees to actively devise solutions to affect the transition of the business into a self-sustaining future-focused entity.
“It is, therefore, correct that Sekunjalo has put these terms to the management of IM, just as it has to all its investee companies – the world over. At the end of the day, it is only possible for Sekunjalo to achieve its objectives of transformation, excellence, and enhancement if the companies in which it has invested remain profitable and self-sustainable.”
Addressing double standards in reporting
The statement continued: “Over the last while, there have been numerous business and life challenges that have affected our entire economy. The media sector has not been excluded, witnessing mass retrenchments and business restructuring, and in some instances, outright closure.
“Whilst these may have been mentioned in passing in the news, not one of them has been targeted or attacked as Independent Media has been, yet through Sekunjalo’s support, there have been no mass retrenchments within its media assets.
“It is therefore somewhat hypocritical for Independent Media’s critics and competitors to focus their bile and narrow-minded reporting on the current restructuring happening at IM.
“IM and by association, Sekunjalo, are being targeted – there can be no other way to interpret this given the slew of questions that have been asked in the last few days.
“Many of these media outlets have or are, the beneficiaries of the former apartheid state and their subsequent wealth. Whilst we have no issue with the individual funders of these organisations, we do take issue with these funds being used for anti-transformative campaigns.
“Lastly, all print media, all over the world, are undergoing severe challenges. To pick on one to deflect from what is going on in their own organisations is short-sighted and could well sound the death knell to their own businesses, which would be a great pity, since in fact, we do support a diversity of opinion in the media,” the statement read.
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