/ 30 August 2013

The Independent media group deal’s unanswered questions

In a politically pressured environment for print media

News coverage of the buyout of the Independent media group is being caricatured as a "war" between newspapers. But serious questions remain – the biggest being: Who, exactly, now owns and controls South Africa's second-largest media group?

Independent was purchased this month in a deal led by Iqbal Survé and his Sekunjalo Independent Media Consortium.

The consortium has 55% and South African and Chinese state-owned companies the rest.

The state funders, are South Africa's Public Investment Corporation, the Chinese-Africa Development Fund and Chinese International Television Corporation.

The new owners have refused to answer questions, including:

How will the Chinese 'control' Independent?
The Competition Commission said the Chinese will have "control" over Independent.

When states control independent media, the risk increases of their being used as state mouthpieces. Foreign state control, out of reach of local voters, is even more concerning. Survé denies the Chinese will have control.

Why is the Chinese 20% stake housed in Mauritius?
Mauritius is a tax haven and secrecy jurisdiction.

Will these foreign investors pay their taxes and remain open to legitimate scrutiny in South Africa?

What are the terms and value of the South African and Chinese state loans?
Has most of the Sekunjalo consortium's stake been financed by the local and Chinese state companies?

If so, they would effectively own most of Independent, which would be worrying given that South Africa's and China's rulers are hostile to critical media organisations.

Did the Public Investment Corporation influence the structure of the Sekunjalo consortium?
Imagine if the PIC, under political pressure, told Survé: "We'll support your bid – if you cut X, Y and Z into the deal and give X a board seat."

This hypothesis is worth probing given that the PIC has previously pressured target companies on empowerment. In addition, many broad-based empowerment deals have been politically influenced, while the Sekunjalo consortium has a political make-up.

Who does Lindiwe Ngcobo represent in the consortium?
Sekunjalo named Ngcobo as a representative of unnamed women's business groups. She shares, or shared, business interests with two of President Jacob Zuma's sons as well as Zuma benefactor Vivian Reddy and ANC treasurer general Zweli Mkhize.

Reddy and Mkhize deny links to Sekunjalo.

How will a fishy conflict of interest be managed?
Sekunjalo has a cut in the MK Military Veterans Association, whose treasurer, Desmond Stevens, is acting head of fisheries. Survé holds extensive fishing interests.

Stevens and Survé have denied any conflict of interest.

What are the untraceable entities?
Manemele Maria, Sekunjalo Digital Media and Western Cape Development Trust are named as consortium members but could not  be traced. Who benefits from their involvement and how?

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