Downfall of The New Age a sign of white collar state capture says Manyi

The New Age newspaper fell victim to white-collar corporate capture of the state, former Government Communication and Information System (GCIS) head Mzwanele Manyi told the commission of inquiry into state capture on Monday.

During his testimony before the commission — chaired by Deputy Chief Justice Raymond Zondo — Manyi spoke about the 2018 liquidation of the Gupta-linked media entity, explaining that The New Age (TNA) Media had become unpopular for reporting on alleged malfeasance at national treasury.

In August 2017, a company owned by Manyi forked out R450-million to buy TNA Media and ANN7 from Gupta-owned firm Oakbay. In July, Manyi applied for the liquidation of Afro Voice, formerly The New Age newspaper.

Manyi referred to the newspaper’s coverage of treasury’s failed integrated financial management system (IFMS), which reportedly cost government R1.7-billion as evidence of his assertions. An internal audit report which was leaked to the media found that there were extremely poor financial and operating controls for the IFMS project.

It was as though the IMFS project “was on auto-pilot” and within the first six months almost half the project’s budget had been spent, Manyi explained.

After The New Age and ANN7 exposed the IFMS saga, they became unpopular, he said.

Treasury said that it was being unfairly targeted, but TNA Media was telling the truth, Manyi argued.

In a reference to Public Enterprises Minister Pravin Gordhan who testified last week, Manyi said: “When we root out cancer we must root out all of it.” Manyi said that he agrees with Gordhan and that the IFMS matter is part of cancer.

READ MORE: Gordhan — Connect the dots to uproot state capture

“It is my contention … that actually there has never been a time in which the state has not been captured,” Manyi told the commission, explaining that state organs function to exclude black business.

Manyi added that the impression is that when people talk about white-collar corporate capture, they are deflecting from the Guptas. If the Guptas are found to have participated in any wrongdoing, they must face the full wrath of the law, Manyi said. Before buying TNA Media, Manyi had said in an interview that he hoped to cure South Africa of “Guptaphobia”.

His testimony’s focal point was disproving allegations that TNA Media had captured GCIS.

In September, treasury accounting officer Jan Gilliland gave evidence showing that GCIS paid R260-million to Gupta-owned media companies between 2011 and 2018.

READ MORE: #StateCaptureInquiry: GCIS paid hundreds of millions to the Guptas

Gilliland told the commission that after tracking and tracing amounts paid to the two companies through treasury’s Basic Accounting System (BAS), he found that the amount was paid to a number of accounts under some variation of the names Infinity Media and TNA Media. 

The BAS is a database in which government transactions are recorded.Around R12-million was transferred to Infinity Media and R248-million to TNA Media. Gilliland found that payments were made to 11 separate accounts under the names of the two companies.

The evidence demonstrated that there was a sharp increase in the amount paid to the Gupta-owned media entities between 2011 and 2013. In 2011, R7-million was paid to these companies and in 2013, they received R30-million from GCIS.

The New Age newspaper was launched at the end of 2010 and ANN7, which was primarily controlled by Infinity Media Networks, was launched in 2013.

On Monday, Manyi presented a number of figures demonstrating the distribution of GCIS business with different media companies. According to the figures, in 2011 and 2012 the SABC was paid about R68-million by GCIS, while TNA received only R8-million. He said TNA only received 4.5% of GCIS. He added that South Africa’s top media companies had captured government.

Manyi said the impression that TNA was “gobbling” government money is incorrect.

Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.
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