In its court application this week to liquidate Sekunjalo Independent Media (SIM) – which controls the country’s largest newspaper group – the PIC annexed an extract from minutes of a 29 October meeting by its portfolio management committee.

The minutes noted that if the liquidation application was successful, ‘the PIC would have an ability to investigate the actions of the directors (of Sekunjalo Independent Media)’.

Those directors include Iqbal Survé, who is cited as the second respondent in the application, according to an amaBhungane report.

Survé’s family investment company, Sekunjalo Investment Holdings (SIH) dominates SIM, despite the inclusion of some smaller union and community shareholders.

SIM in turn owns 55% of Independent News Media SA (INMSA), the publisher of 20 newspapers.

The PIC itself owns 25% of INMSA while Interacom Holdings owns the balance of 20%. Interacom consists of a previous Survé backer, the China Africa Development Fund, and Chinese state-owned China International Television Corporation.

It is SIM, not Independent, that stands to be liquidated although the potential effect on the newspaper group is unclear.

Technically, notes the report, SIM’s share could be sold to a new investor by a liquidator.

In September the PIC demanded repayment of R609 203 987 from SIM, but to no avail. This money from SIM was due more than a year ago in terms of a 2013 loan agreement which called for an initial advance R579 683 083 to be repaid within five years.

SIM has repaid R325 750 000, but interest larger than that has also accrued, leaving an outstanding balance of R609 203 987 as of 30 June 2019.

In his affidavit accompanying the liquidation application, PIC acting CEO Vuyani Hako made a straightforward case.

‘The applicant is in possession of some of the first respondents financial statements which show that the first respondent's debts are larger than their assets resulting in the first respondent's inability to honour its debts in terms of the loan agreement. The respondent continues to trade notwithstanding the fact that they remain indebted to the applicant for payment of the outstanding loan amount. In the circumstances, I respectfully submit that the only conclusion to be drawn from the respondent’s failure to pay the applicant is the fact that the respondent is commercially, if not factually, insolvent and unable to pay its debts when they become due.’

AmaBhungane notes newspapers in the Independent stable have attacked the liquidation application as part of a political conspiracy to stop transformation in the media. While SIM is yet to respond in court, it has hinted at its legal strategy in media reports.

Takudzwa Hove, one of SIM’s four directors, was quoted as saying that SIM in fact does not owe the PIC anything at all. His argument is that the PIC has already swopped the debt for shares in Sagarmatha Technologies, the company Sekunjalo tried and failed to list on the JSE last year with handsome PIC backing.

Survé’s friend Dan Matjila was at the time still chief executive of the PIC. Whether or not Hove’s argument makes it into court papers, it seems incongruous, notes amaBhungane, because the set of transactions that were meant to take place between Sagarmatha and SIM were conditional on the listing, which never happened.

Full amaBhungane report

ANC deputy secretary-general Jessie Duarte has slammed the PIC liquidation threat.

She said although the threats were absurd, they were nevertheless concerning, notes a Cape Argus report.

‘The Independent Media brand has existed for decades and decades, under different ownership. Is it a problem now that it is owned by the indigenous people of SA? As the ANC we are applying our minds to what the cause of this really is but I can tell you that this makes no sense,’ Duarte is quoted as saying.

Full Cape Argus report (subscription needed)