There are a number of interesting things about the consortium buying Independent Newspapers and its funding, announced this evening by Dr Iqbal Survé of Sekunjalo.
Twenty-five percent is held by the Government Employees Pension Fund. Of Dr Survé’s consortium, which will hold the balance of 75%, there will be lead shareholders, who will share 63% of the consortium (or 47% of the company). These are Dr Survé’s private company, three trade unions companies – the investment arms of Cosatu, Sactwu and Fawu – and a staff shareholding which will have 10% (or 7,5% of the company).
The remaining 37% will be a number of broad-based and smaller shareholders, including the Black Business Chamber, “various independent South African women’s business community organisations”, Sekunjalo Digital Media, Mandla Mandela’s Mvezo Development Trust, the Umkhonto we Sizwe Military Association, the Western Cape Development Trust and “some prominent” individuals.
This introduces a number of new players to media ownership and certainly adds to the diversity of the industry.
Dr Survé has chosen to go with an older model of broad-based empowerment, through mostly politically-aligned interest groupings, rather than the large numbers of individual shareholders – a true BBBE – as one has seen recently in some other companies.
Dr Survé’s lead grouping holds a minority, and one wonders why they let it go below 50%. It is not clear how much he personally controls. He does, however, seem to also have a shareholding in the smaller grouping through something called Sekunjalo Digital Media.
It is noteworthy that the staff share trust lies within his lead grouping. Presumably this was to prevent the Trust being a swing shareholder in a company without a majority.
The most notable element is the state pension fund’s 25%, not just because Dr Survé told me and others that we had got it wrong when we quoted his own Competition Commission documents to say they held this amount. This is a high-risk, high-price investment in a declining industry – not the kind of thing one normally spends pensioners’ money on. We will be eager to hear from the GEPF how this fits in with their strict mandate.
The other major surprise is funding from “a Chinese consortium”, which may also acquire a further 20% to fund a growth strategy. It is odd – to say the least – to be so cryptic, telling us only that they are Chinese, with no further details. We can assume that this is tied to the Chinese authorities, and their push for a greater media presence in Africa as part of their “soft diplomacy” drive for influence on the continent.
The Chinese government, let us say, is not a friend of a free, open and critical media. They are very clear about their national interests, and their firm hand on ensuring their media interests serve them. One has to wonder what will happen when their national interest does not align with ours. This is relevant when Dr Survé has been so vocal about bringing ownership back home.
One can safely say now that Independent Newspapers, the country’s second biggest newspaper groups, is in hands which are closely tied to our ruling party, the ANC. This in itself is neither here nor there, depending on how Dr Survé plays that out and interprets his and his newspapers’ roles.
At least this is now out in the open and we can have the debate about newspaper ownership – despite those who have been arguing that we must debate ownership unless it is black.
What should be up for discussion as well is whether Independent should be allowed to keep such dominance in the secondary cities: Cape Town and Durban, where they own all the major English-language papers. For real diversity, they should be made to sell off one title in each of these cities.