“Their future is in very serious trouble. The future is bleak. They might only be rescued if they can be pulled into another big company.”
That was how Chris Whitfield, the former head of Cape papers at Independent Newspapers, responded to a question about what might be in store for Sekunjalo Independent Media (SIM) after it was reported on Tuesday that the Public Investment Corporation (PIC) lodged an application to liquidate SIM, the company that purchased Independent Media in 2013, partly through a controversial PIC loan.
Whitfield and his co-author, former Cape Times and Business Report editor Alide Dasnois, were speaking on Wednesday evening at the Hyde Park Corner shopping centre during the Johannesburg launch of their new book, Paper Tiger, about the tumultuous past decade at Independent.
The book focuses on the story of controversial Sekunjalo chairman Iqbal Survé’s troubled reign over the Independent media conglomerate over the past six and a half years. Independent publishes numerous major titles in South Africa, including the Cape Times, Cape Argus and Weekend Argus, Isolezwe, Business Report, The Mercury, The Star, the Sunday Tribune, Daily Voice and Pretoria News.
Last month, Survé’s offices in Cape Town were also raided by the Financial Sector Conduct Authority (FSCA).
The FSCA was probing a case involving Survé’s company Sekunjalo Holdings allegedly engaging in irregular share trading against another of his companies, Ayo Technology Solutions.
In the face of all this, how would these titles, established household names in the media firmament of South Africa, survive, the authors were asked.
“Three of the papers can be saved out of the 14 or 15,” answered Whitfield. “That’s probably the best we can hope for.”
Dasnois added that it had always been notoriously difficult to gain insight into the facts behind Survé’s business dealings, but “the Sagarmatha listing showed us that the newspapers are making an annual loss”.
She added that, whatever happened, she believed there would always be a need for a quality English newspaper in Cape Town.
Media veteran Prof Anton Harber, who hosted the discussion, said that in his view the best thing that could happen was that the proposed liquidation would “take down Iqbal Survé and his empire”, but the obliteration of local city and regional titles would be a “big loss”. He said he hoped a “mixture of philanthropists and others will step in … rich people who care … benign philanthropists, to save at least one title in each city”, but with editorial independence somehow maintained.
He said he felt nearly surprised at saying this, since “I would have felt differently about this at another time”.
The authors agreed that Survé had pursued the purchase of the media group despite the fact that it was unlikely to ever be a “big money maker” because it was both a “vanity purchase” and because of his hope that having control over such influential newspapers might lead to other business opportunities.
Said Dasnois: “The idea is to use the papers to curry favour with politicians to get business somewhere else. They become a tool for political and corporate interests, all in the name of profit.”
Survé’s approach was compared to that of the Gupta family, who had also tried to gain ownership of Independent, and later ended up in a bitter legal battle with Survé about a disputed agreement around their shared ownership of the company. Nevertheless, the Guptas continued to run their own national newspaper, The New Age, and their own news channel, ANN7, with the blessing and support of then president Jacob Zuma’s government. Both titles went out of business, however, soon after Zuma was succeeded as president by Cyril Ramaphosa.
Said Harber: “In both cases [the Guptas and Survé], that business model failed dismally.”
Whitfield countered that, arguing that in the Guptas’ case, they hadn’t experienced a total failure. For several years, they had made a great deal of money out of government advertising and generous sponsorships, including The New Age’s business breakfasts.
“Iqbal could not match them,” said Whitfield, partly because it had been harder for him to force his editorial staff to toe the line. Nevertheless, Survé’s papers did later successfully transition to becoming closely aligned with Zuma and his supporters in the ANC, but were left floundering after Ramaphosa’s rise to power.
“They are now aligning with the EFF.”