Oakbay chair Atul Gupta and President Jacob Zuma (Photo: GCIS)
Cape Town – Save South Africa and the Democratic Alliance (DA) have expressed concern regarding the Guptas’ sale of broadcaster ANN7 and The New Age (TNA) newspaper to Mzwanele Manyi.
Gupta-owned Oakbay Investments announced on Monday that Manyi – through a shelf company he took over in June – had bought the entities for R450m through a vendor financing deal.
Purple Group trading specialist Musa Makoni explained that vendor financing is finance offered by the seller of a business, to finance the sale of its assets to a buyer.
“Typically, the buyer would pay an initial amount and the balance, which might include interest, is settled over an agreed period of time, through payments at different agreed intervals,” he told Fin24 on Monday.
“A good example of this would be BEE transactions where typically buyers of shares were loaned the initial purchase funds by the companies they were buying shares in, with stipulated future repayment dates.”
Mail & Guardian associate editor Phillip de Wet spoke to Manyi on Monday, who said that the Times of India still has a 7% “residual” stake in TNA, while management has 10%. "Otherwise all him," he tweeted.
Save SA: Sale amounts to fronting
Reacting to the deal, Save South Africa said it amounted to fronting and was a “disgrace to the notion of real black economic empowerment”.
“The ‘sale’ of the Guptas’ propaganda machine to … Manyi is an outrageous example of what Jacob Zuma and his cronies really mean when they talk about ‘radical economic transformation’,” the group, headed by Sipho Pityana, said in a statement. “It is true to form for the crony capitalists who are clustered around Zuma.”
DA communications spokesperson Phumzile Van Damme told Fin24 on Monday that the party is concerned about the sale.
“From a media perspective, the DA is quite concerned about the sale given the fact that Mr Manyi is a complete and utter ANC hack (and Jacob Zuma faction, specifically),” she said. “He will sink ANN7 and TNA's already very poor quality even lower.
“Another concern for us is the fact that TNA, in particular, appears to be propped up by government funding. Mr Manyi will likely facilitate even more government funding for TNA and ANN7,” she said. “We will be giving some thought to how to remedy this and will announce action, in due course.”
Save South Africa accused the Gupta family of using vendor finance to “effectively pay Manyi to take ANN7 and The New Age off its hands”.
“Given that most of the family’s money has been siphoned from the public purse, they are effectively using dirty public money to hand over an asset from one rogue business to another, and using a questionable financial model to do so.
“From a media point of view, ANN7 and The New Age are contaminated propaganda vehicles and highly damaged brands. And if the Guptas, or the Zuma clique, believe a change in ownership will change perceptions of their propaganda arms, they can forget it. Under Manyi – a failed talkshow host on the channel until recently – it will just be more of the same.”
Manyi hopes government and business will support media firms
Manyi did not respond to media queries regarding the deal.
He told SAFM on Monday that he hoped government and business will come on board and added that the plan is to make ANN7 and The New Age powerhouses in the near future, according to SAFM on Twitter.
EWN reported that Manyi said he "will ensure that ANN7 and The New Age reach their full potential as media agencies that report the truth".
In an earlier statement, he said he is "delighted to have reached agreement with Oakbay and look forward to successfully completing the deal.
“These are two strong businesses which are full of potential and, under the right external circumstances, can become an increasingly important and relevant part of the South African media landscape.
“In addition, I am particularly impressed that the shareholders of Oakbay have agreed to do a vendor financing at acceptable terms as part of their commitment to transformation and to expedite the transaction.”
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