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R25m for breakfast

Jan 20 2013 10:46 Loyiso Sidimba, City Press

Atul Gupta, one of the three Gupta brothers. Picture: Leon Sadiki

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Johannesburg - Three of the country’s biggest state-owned companies are paying millions of rands to bankroll business breakfasts hosted by President Jacob Zuma’s close friends, the Gupta family.

The Guptas, who own The New Age newspaper, have been hosting speakers like Zuma, Justice Minister Jeff Radebe and Public Enterprises Minister Malusi Gigaba for publicly broadcasted interviews.

City Press can reveal that:

»Transnet forked out R17.5m for 18 breakfast sessions;

»Eskom paid R7.2m to sponsor six sessions (at R1.2m each) between November 2011 and last year; and

»The SABC doesn’t charge The New Age a cent to broadcast their breakfasts live on SABC2.

It was previously reported that Telkom sponsored 12 business breakfasts to the tune of R12m in the 2012/13 financial year.

The revelation comes in the same week the National Energy Regulator of SA (Nersa) held ­public hearings into Eskom’s proposed 16% tariff hike.

Eskom’s sponsorship for The New Age breakfasts was paid from its 49M energy-efficiency initiative budget.

Gupta family spokesperson Gary Naidoo said he found it “very strange and unethical” that City Press focused on their clients.

“These same clients appear in your newspaper and it would seem your questions are driven by the fear of losing market share.

“It would seem that your motive is one of finding a mechanism to place a ‘chilling effect’ on those clients who have bought into our vision of being proudly South African, and fiercely independent through the publication of news in a balanced fashion.”

The multimillion-rand sponsorships were revealed by Gigaba in response to a parliamentary question by DA MP Kenneth Mubu.

Mubu said the newspaper was an “ANC Gazette”, and Transnet and Eskom’s dealings with it compromised the government’s image.

“The New Age’s owners have a very close and cosy relationship with President Zuma,” Mubu said.

He said it was wrong for government to sponsor the newspaper’s business breakfasts.

Zuma is a family friend of the Guptas and his son Duduzane serves on at least nine boards with members of the Gupta family, including Sahara Holdings and Shiva Uranium.

One of Zuma’s wives, Bongi Ngema, is the communications and marketing head at the Guptas’ JIC Mining Services.

The Mail & Guardian reported in November that there were “three sets of Gupta fingerprints” on a R3.8m bond registered on Ngema’s Waterkloof Ridge property.

The New Age’s official circulation is unknown as the paper is yet to register with the Audit Bureau of Circulations (ABC).

ABC vice-president Gordon Patterson estimated last year, in a report by the Daily Maverick, that the paper sold between 7 800 and 13 000 copies a day.

Both Transnet and Eskom ­defended their sponsorships of the breakfasts this week.

Transnet received a proposal, which it says was considered through the company’s normal channels, according to spokesperson Mboniso Sigonyela.

Eskom’s Hilary Joffe said the decision to sponsor the briefings was reached after mutual discussion over a period of time.

Transnet and Eskom claim the 24 sessions they sponsor “encourage thought leadership, highlight the need to conserve electricity and build their brands”.

Transnet has also spent more than R8.5m on advertising with The New Age between October 2011 and November last year, according to documents in City Press’ possession.

Eskom has spent about R4.4m on advertising with The New Age between December 2010 and October last year.

Sigonyela said Transnet saw the breakfasts as a branding opportunity in the newspaper and on SABC2.

Joffe said the main benefit for Eskom and its shareholder was brand awareness and highlighting the need to conserve electricity.

“We did not pay the SABC for the Morning Live broadcasts. This was one of the benefits of the sponsorships,” Joffe said.

In October, the Sunday Times reported the 45-minute briefings were broadcast for free, when the SABC normally charged R18 000 for 30 seconds on the programme.

Two inside sources confirmed to City Press that the newspaper did not pay for their SABC TV slots.

SABC spokesperson Kaizer Kganyago, however, said the broadcasts were not for free.

“The agreement between the SABC and The New Age is a win-win agreement as we get content that helps us inform the public.”

Naidoo said other newspapers were jealous of their success.

“We know that our loyal partners will see through this bullying by competitors and continue their support of our newspaper.”

He didn’t deny that the SABC gave them free publicity.

“Using the cover of journalism to understand our model is not the way we choose to do business and we would urge yourselves to consider the ethics of your approach.”

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transnet  |  eskom  |  telkom  |  jacob zuma  |  gupta family
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