Black groups and mysterious Chinese investor take control of Independent media group

The Star, once South Africa's biggest daily, now also belongs to Sekunjalo
The Star, once South Africa’s biggest daily, now also belongs to Sekunjalo

Sapa reports that Cosatu and its some of its affiliates make up a large portion of Sekunjalo Independent Media’s (SIM) shareholding, the company said on Thursday. But a mysterious Chinese investor is providing some of the funding and could end up with a 20% stake in one of South Africa’s most influential newspaper groups.

Employees of Independent News and Media (INM) would get 10 percent of the shares in company, SIM chairman Iqbal Surve said in a statement.

“We know we can continue to gro

w and run this media group profitably,” he said.

Independent News and Media in Ireland confirmed on June 17 that its shareholders had voted in favour of the sale of the media group to the Sekunjalo Group. The two shareholders of Independent News and Media SA (INMSA) would be SIM, with 75 percent, and the Government Employees’ Pension Fund (GEPF) acting through the Public Investment Corporation (PIC), with 25 percent. This would ensure that INMSA was “firmly in South African hands”, said Surve.

He said 63 percent of SIM’s shares would be held by Sekunjalo Investment Holdings; the Congress of SA Trade Unions’ (Cosatu) investment company Kopano Ke Matlaka, represented by Collins Matjila; the SA Clothing and Textile Workers’ Union Investments Group, represented by Andre Kriel; the Food and Allied Workers’ Union, represented by Basebenzi Investments and Katishi Masemola; and employees, via a special purpose vehicle.

The other 37 percent would be held by a number of “broad-based value adding partners”, he said.

These included the Black Business Chamber (Western Cape) and various independent South African Women’s business community organisations, represented by Lindiwe Barbara Ngcobo, and Manemele Maria.

Sekunjalo Digital Media would help drive a digital and mobile growth strategy; and the Mvezo Development Trust, represented by Mandla Mandela, would provide for the development of the communities of the Eastern Cape.

They were joined by the Umkhonto we Sizwe Military Association (through the Military Veterans’ Trust); and the Western Cape Development Trust, which would focus on the provision of bursaries for journalists from black communities.

Other shareholders were prominent entrepreneurs and business people such as Sandile Zungu, and media and advertising personalities Tim Modise and Groovin Nchabeleng, from the Blue Print Group.

“The Sekunjalo Consortium will at all times have control of INMSA, with a number of funding partners sharing in the equity of the company,” said Surve Funding would come from SIM itself, from banks, the trade union investment companies, the GEPF, and a Chinese consortium.

“To ensure that the business has sufficient capital resources to reinvest in vernacular titles, digital strategy, reinvigorating existing titles and an African growth strategy, additional funding has been arranged which may see a further shareholding/investment of 20 percent placed with the Chinese consortium,” he said.

INMSA owns the Cape Times, the Cape Argus, the Weekend Argus, the Daily Voice, The Star, Pretoria News, Saturday Star, Sunday Independent, Diamond Fields Advertiser, Weekend Pretoria News, Daily News, The Mercury, Post, Independent on Saturday, the Sunday Tribune, the Zulu daily newspaper, Isolezwe, and its Saturday and Sunday editions.

It also owns a number of weekly community newspapers in the Western Cape, and has investments in the community newspaper markets in KwaZulu-Natal and Gauteng.

It also owns and runs Independent Online (IOL) and publishes three Conde Nast international magazine brands: House & Garden, GQ and Glamour.

Surve said he strongly believed in the future of print media in South Africa.

“This is the beginning of a strategy to invest in newspapers across Africa, and to focus on developing digital and other cross-media opportunities.”

The Media Workers’ Association of SA (Mwasa) welcomed the announcement and said it believed the staff share would revolutionise labour relations in the media sector.

“Mwasa welcomes this offer to empower all staff and looks forward to further formal engagements to determine logistical and operational arrangements for the participation of staff in the direction of the new company,” it said.

It looked forward to meeting the challenges and opportunities the announcement presented, and congratulated Surve and the SIM consortium on a “watershed achievement”.