ANC government acknowledges it will be buying into Independent Media with government employees' pension fund
In a reply to a question asked by the Freedom Front Plus in parliament, the minister of Finance acknowledged that funds of the Government Employees Pension Fund (GEPF) will be used to invest in the Independent News and Media group in conjunction with the ANC orientated Sekunjalo Independent Media consortium.
This means in effect that the ANC, through government pension funds, will be gaining influence over a newspaper group which could be used as a powerful ANC propaganda medium. Prominent newspapers such as The Star, Pretoria News, Cape Argus and The Sunday Independent are all newspapers of Independent Media which the Sekunjalo consortium will be purchasing.
According to Adv. Anton Alberts, the Freedom Front plus' parliamentary spokesperson on finance and the media, it is shocking that the ANC will be using public funds to gain a foothold in the country's mainstream media. "There are however also questions about the sensibility of this type of investment in a time where the majority of newspapers are experiencing a decline in circulation figures. All the signs are pointing to this being a politically inspired transaction in an attempt to set up another pro-government newspaper in addition to the Gupta-owned The New Age newspaper," Adv. Alberts said.
Although no official figures have been released, media reports indicate that the transaction is valued at R2 billion.
From a submission made to the Competition Commission, which had been reported on earlier, it appears that the pension fund, through the Public Investment Fund (PIC) will obtain a share of 25% in the transaction. This would amount to approximately R500 million.
It is already well-known that the three persons who are involved in the Sekunjalo consortium have close ties with the ANC. They are Dr. Iqbal Survé, the executive chairperson of the Sekunjalo Investment Group, the prominent businessman and ANC fundraiser, Sandile Zungu and the ANC parliamentary member, Mr. Mandla Mandela, the grandson of former president Nelson Mandela.
The ANC has already been in the cross-fire for its controversial funding of The New Age newspaper through government advertisements and sponsorships of state-owned enterprises.
In the reply of the minister of Finance, he confirmed that the PIC had approved of the investment, subject to the approval of the Reserve Bank and the Competition Commission.
The final investment amount could not be revealed by the minister as funding arrangements with other potential funders have not been finalised.
The minister also stated that the transaction was agreed to in accordance with the pension funds' Private Equity Mandate which is aimed at investing in companies with the potential of generating investment returns and the funds' Developmental Investment Policy which allows for investment alongside and supporting broad based black economic empowerment.
Statement issued by Adv. Anton Alberts, FF Plus parliamentary spokesperson: Finance, June 19 2013
Text of Finance Minister Pravin Gordhan's reply:
NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
QUESTION NUMBER: 1357 [NW1687E]
DATE OF PUBLICATION: 31 MAY 2013
1357. Adv A de W Alberts (FF Plus) to ask the Minister of Finance:
(1) Whether the Government Employees Pension Fund (GEPF) will be making an investment in conjunction with a certain company (name furnished) in a certain media group (name furnished); if so, what are the relevant details;
(2) what amount will the GEPF be spending on this transaction;
(3) in terms of which (a) mandate and (b) investment strategy will this investment be made?
NW1687E
REPLY:
1. The Public Investment Corporation, acting on behalf of the Government Employees Pension Fund ("GEPF") has approved an investment in Independent News & Media (Pty) Ltd in conjunction with Sekunjalo Independent Media (Pty) Ltd ("SIM"), subject to approval from the South African Reserve Bank and the Competition Commission of South Africa (the "Transaction")
2. The final investment amount by the GEPF is still subject to the finalisation of funding arrangement with other potential funders.
3. The Transaction was approved in accordance with the GEPF's Private Equity Mandate which seeks to invest in established companies with the potential to generate appropriate risk adjusted investment returns. The Transaction also satisfies the GEPF's Developmental Investment Policy by investing alongside and supporting a Broad Based Black Economic Empowerment Consortium in the Transaction.
Issued by Parliament, June 19 2013
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