Former GCIS head, Mzwanele Manyi. (David Harrison/M&G)
The sale of Infinity Media and TNA (owners of 24-hour news channel ANN7 and The New Age newspaper, respectively) to Mzwanele Manyi’s Lodidox for a reported R450 million is of manifest public interest.
It seems obvious – news media is a vital component of a democracy and its ability to elucidate and inform the public should always be under scrutiny. (There’s an interesting defence to be made here about the media’s need to navel-gaze, but perhaps another time.) Beyond that is the history of ANN7 and The New Age in South Africa, in particular the conduct of its previous owners, the Gupta brothers, and the role these two publications played in the Cabinet reshuffle in 2017.
Perhaps the entire body politic is aware of state capture and the role of the Gupta-Zuma network (or the shadow state) in the plunder of various state institutions and state-owned entities. What has certainly been less studied is how the media itself was captured and co-opted into the shadow state’s project. The plunder of the SABC was perhaps the most overt – last year, former SABC contributing editor Vuyo Mvoko testified before Parliament how the resources of the incredibly important Morning Live were diverted to The New Age.
Many parliamentary questions from the opposition benches have revealed how the Passenger Rail Agency of South Africa, the South African Airways, Telkom, and Eskom have plunged millions of rands into The New Age via sponsorship deals and enormous subscription purchases. The provincial governments of the Free State, North West and Northern Cape are other generous patrons of the paper. This is no accident. Former Government Communications and Information Systems chief executive Themba Maseko revealed to the public protector last year that the hand that has diverted these funds away from a fair and equitable distribution of government advertising spend and into Gupta coffers reaches all the way up into Mahlamba Ndlopfu, via Ajay Gupta.
Nielsen data also reveals the outsize share of government ad spend that goes to The New Age, according to amaBhungane.
How these two assets have had to sing for their supper. Never mind the bold announcements that they would sing the praises of government when they were launched. Who can forget ANN7’s seminal role in the ouster of Pravin Gordhan from the national treasury, which included a long and ugly campaign to discredit the Public Protector’s state capture report?
Given the provisions of the Public Finance Management Act and Section 217 of the Constitution on government spending, it doesn’t take bravery to predict that these sweetheart deals will not last for a very long time, and the people who signed off on them will be in very big trouble in the near future.
These are the reasons why the sale of these two media assets necessarily attract scrutiny – even if the Guptas had sold to the Pope.
However, Manyi fancies that the scrutiny is because he’s black. He thinks rather too much of himself. He is by no means the only black person playing the media ownership game. If we strip away for a moment all those lofty notions of public interest and a healthy media, the deal stinks. The Guptas reportedly transferred the assets via a vendor financing deal. This is by no means strange or unusual, as long as the underlying assets are a long-term going concern. There are serious questions about that. The reason for the sale is another reason for deep suspicion: at the end of August, there will be no bank left willing to touch the Guptas. This was a forced sale, to what was a shelf company up until a few months ago …
Manyi should not have been surprised that people would approach him under Section 26 of the Companies Act to find out who exactly owns Lodidox. His response has been telling. He accused TimesLive of harassing him for being black, and told Daily Maverick he’d see them in court.
By the way, the media ownership research by Stuart Theobald, Colin Anthony and Phibion Makuwerere at Intellidex should end forever this notion that “the media” is in South Africa is white owned. All the major media players have substantial black economic empowerment ownership structures, and some like Naspers and Independent Newspapers count the Public Investment Corporation amongst their biggest shareholders. The biggest media player by far is the SABC, which is completely owned by the ANC-led government. This notion – like the much-maligned “white monopoly capital” – is a phantasm that exists purely in the minds of those who would wish for us to look away as they loot and rob. It just isn’t going to fly.
Transformation is not a magical wand that excludes black owners from playing by the same rules as everybody else. It certainly doesn’t mean that the repression, looting and editorial interference of yesteryear’s National Party regime should be replaced by a black band of repressive looters and censors.
If Manyi is serious about his court challenge, perhaps he should cut his legal costs by challenging the constitutionality of Section 26 of the Companies Act. The frontal attack is not going to work. The matter is about as clear as it can be in law. Who knows, perhaps he’ll be luckier by trying to persuade the Constitutional Court that real transformation means that a black person shouldn’t be asked how his new company with a murky past managed to raise R450 million to buy media assets of indeterminate value, that have been front-and-centre of state capture for the past half-decade or more. I wouldn’t bet on it.