Cape Town - Independent Media has evidence that senior executives of its competitor, Tiso Blackstar, had plotted to scupper the listing of Sagarmatha Technologies on the JSE.
The evidence specifically alludes to attempts by Tiso Blackstar executives to influence critical stakeholders to stop the listing due to the involvement of Independent Media.
The evidence points to a dirty tricks campaign similar to those employed by Stratcom during the apartheid era to demonise Struggle activists like Winnie Madikizela- Mandela - but in this instance, the campaign was aimed at Independent Media and its executive chairman, Dr Iqbal Survé.
The JSE approved the Pre-Listing Statement of Sagarmatha Technologies on March 28. On April 3, and for the next few weeks, Tiso Blackstar launched a series of articles to deliberately misrepresent the financial position of Independent as “technically insolvent”, the company said in statements.
Tiso Blackstar, formerly known as Times Media Group (TMG), is a direct competitor of Independent Media and is the publisher of the Sunday Times, Business Day, Sowetan and the online news platform TimesLive.
Tim Cohen, outgoing editor of Business Day, revealed Tiso Blackstar’s motive in his column written after the JSE stopped the listing by suggesting that the Public Investment Corporation (PIC) should force a merger between Tiso Blackstar and Independent Media.
Ahead of the listing Independent Media said the PIC was unduly pressured by journalists from Tiso Blackstar, Daily Maverick, and Amabhungane. The PIC eventually caved in to pressure and declined to invest in Sagarmatha Technologies.
Sagarmatha said in a statement that despite the PIC withdrawal, it managed to raise R4.2bn - easily satisfying the onerous listing requirements by the JSE. The normal listing requirement is R500m but the JSE insisted on R3bn.
Cohen’s opinion piece on the front page came off the back of a slew of correspondence by journalists in its employ directed to advisers, regulators and the PIC.
Shortly after the listing was withdrawn the PIC disclosed it would not be investing in Sagarmatha.
On April 13, the day Sagarmatha Technologies was supposed to list, Cohen wrote: “The PIC needs to start thinking about forcing a merger, otherwise a whole bunch of SA’s long-loved newspapers are going to disappear pretty soon.”
Tiso Blackstar’s financial woes are well documented. Its share price has plummeted from R25 to about R4.
This week, Tiso Blackstar delisted from the Alternative Investment Market (AIM) of the London Stock Exchange.
The Tiso Blackstar campaign included articles by Ann Crotty and Sam Sole, writing under the investigation unit of AmaBhungane.
Independent Media has highlighted 29 misleading inaccuracies about Crotty and Sole’s reporting on the listing.
One of the most damaging was that Independent was “technically insolvent”.
Independent does not have debt with the banks but has shareholder debt - all of whom have a residual interest in the business. Tiso Blackstar has bank debt of more than R1.5bn.
Shareholder debt is generally the most junior debt in a company and since it belongs to shareholders, it cannot be viewed with the same lens as bank or third-party debt and the lenders also have residual interest since they are also equity participants.
On Thursday, Survé said it was eerie how the Tiso Blackstar campaign had unfolded in the very week that Madikizela-Mandela was buried.
“Winnie Madikizela-Mandela, in one of the last appearances, spoke about Stratcom and the head of Stratcom, Vic McPherson, indicated that at least 40 journalists were on the payroll of the apartheid state. Winnie was their principal target.
“The aim was to vilify Winnie so that her credibility would be destroyed and she would have no influence in the course of the country’s future,” said Survé.
He said news that Tiso Blackstar had actively attempted to scupper the listing sketched a pattern reminiscent of Stratcom’s tactics.
He said the dirty tricks campaigns extended to the professionals and regulators involved in the listing, including advisers and auditors.
“The patterns that are emerging on the attacks on Independent Media and the Sekunjalo Group and myself reeks of Stratcom. It has all the hallmarks of Stratcom and dirty tricks.
“Firstly, in the words of McPherson, it was important to mix the truth with disinformation and lies so that the story is believed by the reader. Winnie mentioned this was done in the ratio of 70% truth to 30% lies,” said Survé.
He said there were commercial reasons but also political reasons Tiso Blackstar wanted to stop Independent.
He said Independent offered a space to tell an alternative narrative that otherwise would not exist.
Commenting on the similarities to Stratcom, he said: “The past becomes the present to determine the future.”
Approached for comment on Thursday night, Tiso Blackstar CEO Andrew Bonamour denied that he had asked his executives to stop the listing of Sagarmatha.
Tiso Blackstar CEO Andrew Bonamour
“No, not at all. Why would we do that. We share distribution. Why would we want to harm the business?
“We have no contact with the PIC and we have no contact with the JSE. Our journalists are totally independent.
“We have a strict policy. I have no interaction with the PIC. I can promise you now it is nothing,” said Bonamour.
Cohen asked what he had meant by a forced merger between Independent Media and Tiso Blackstar, said: “It’s my view that the newspaper industry needs consolidation. The industry is not in a good shape.
“You know there has been such a terrible fight between the management of Tiso and the management of the Independent Group. There has been a lot of toing and froing between the two.
“I really don’t think it is up to me I have said my say. By all means, I just think it would be inappropriate for me as an employee of one of the parties in this dispute to comment in a news story.
“You are welcome to extract from the piece. I am not proposing an immediate merger between the groups or anything like that, I just think that is beyond my pay grade. I do think consolidation is necessary.”
Asked to comment about the multiple misleading inaccuracies in the articles, including that Independent Media was “technically insolvent”, Crotty said: “I wrote based on the 212 (page) pre-listing statement. It was an amazing amount of information.”
She denied harassing advisers, auditors and regulators.
“How could I harass regulators? I think I did ask them (Vunani) about their involvement about a week ago,” she said.
AmaBugane’s Sam Sole said: “It is not for me to respond now. Independent has already won. As far as I am aware, a point was made that Sekunjalo Independent Media was technically insolvent.
“Whether or not the position is the same with Independent Media, (of) which Sekunjalo is 55% shareholder, we do not know because we haven’t seen Independent Media figures.
“All I can say is there is not a great deal of detail that has been supplied in relation to what is allegedly incorrect in the article.
“The story that I wrote was purely based on the pre-listing statement. The pre-listing statement deals with Sagarmatha and the consolidation of Sagarmatha and Sekunjalo Independent Media.
“It carries that financial details about those two separate companies and how it would look like when they were put together.
“Sekunjalo Independent Media’s own auditors saying the company’s liability exceeds the assets and the company’s continuation is a growing concern based on the director’s securing further investment.”
Pressed, Sole ended the call, saying: “I am driving now and I can’t deal with this while I am driving a car.”