President Jacob Zuma’s friends, the Guptas, claim they are entitled to a 27.5% stake in the “Independent” Media Group, which owns many newspapers, including The Star.
This means two pro-ANC camps are contesting a multibillion-rand advertising cake, which is paid for by you, the taxpayer.
When Iqbal Survé and company bought the Independent Group in August 2013, they did so with an R888-million loan from the Public Investment Corporation (PIC). The PIC is, among other things, custodian of government pension fund money.
This is the same PIC that lost R99 billion when Zuma fired Nhlanhla Nene as finance minister on December 9 last year. Some salient points about the PIC loan to Survé.
First, not one cent has to be paid back for the first five years.
Second, the loan was partly premised on the assumption that a more ANC-friendly Independent Group would attract government (taxpayer-funded) advertising. This would help the group’s profits and enable it to repay loans when necessary.
Third, the loan was part of an attempt to create a “black Naspers”. PIC chief executive Dan Matjila, answering DA MP David Maynier last week, said it was “only fair we should give blacks a chance”.
He wanted to create a giant similar to the way he believed Naspers had been given a leg-up by Afrikaner nationalists.
He said this was the motivation, rather than any “immediate returns” on the investment. The anticipated surge in government advertising has not materialised.
The Guptas, rather than Survé, have been adroit in cornering that market. They have “captured” Zuma through familial patronage.
They have also ensnared a raft of provincial governments and other bodies, who use taxpayers’ money to advertise in The New Age. Advertising spend in The New Age is disproportional to circulation.
Last year, it was disclosed in parliament that government had spent the same amount in The New Age as in The Sowetan, even though The Sowetan had 11 times as many readers as The New Age.
Well, it turns out the Guptas want more. According to amaBhungane investigative journalists, the family is claiming it had a conditional agreement with Survé for a 27.5% stake of the Independent Group, plus the right to appoint Independent’s top managers.
Like the sacking of Nene, the Independent Media gamble on government advertising is another example of where taxpayers and pensioners have lost billions of rands, through the PIC, because of ideology.
Survé, along with Sekunjalo, plus Chinese and union connections, paid R2 billion for Independent. That was too much, especially in a market where both circulation and advertising were in decline.
Survé is no doubt a persuasive salesman, able to convince gullible takers. But in the matter of government advertising, the anticipated lifeblood of the so-called Independent Group, he has been outsmarted by the Guptas.
All this would be amusing if taxpayers and pensioners weren’t the victims, while the Guptas and Survé enjoy the high life at our expense. What fun to play with other people’s money. All in the name of the struggle, of course.