Mboniso Sigonyela
The R377-million purchase of Kagiso’s media assets by rival empowerment group
New Africa Investments Limited (Nail) could leave the latter in contravention of the Broadcasting Act.
The acquisition gives Nail’s media arm, New Africa Media (NAM), effective control of at least three private stations, Jacaranda (77,7%), Kfm (70%) and
East Coast Radio (90%) in addition to the 22% stake in Khaya FM.
The Broadcasting Act prohibits anyone from controlling more than two private FM
stations. This leaves NAM with no alternative other than to sacrifice or reduce
its controlling stake in one of the three stations, says research house Business
Map.
But Nail intends to use its empowerment credentials to convince the Independent
Communications Regulatory Authority (Icasa) to grant it special permission to
hold more than the statutory maximum of licences. The group says it is confident
that the application will be successful.
”The two-licence maximum was intended to protect and diversify ownership to benefit empowerment, and this will present them [Icasa] with an opportunity to
apply it for that intended purpose.”
This is a true empowerment deal and if the regulator has any discretion there is no doubt that Nail will be allowed to keep the stations, says Business Map.
The deal is likely to go through as Kagiso’s Roger Jardine told Moneyweb that
the two parties will work with Icasa to expedite the process.
Nail representatives would not comment on what it would do if the application
does not succeed, saying only that it is a strategic issue.
The Kagiso deal positioned Nail as a serious media player with assets in excess
of R700-million. Besides Icasa, the deal is subject to a due diligence investigation and Competition Commission approval.