The SCA has ordered Sekunjalo Independent Media (SIM) to pay the investment arm of the Southern African Clothing and Textile Workers’ Union (Sactwu) R458.6m – plus interest and legal costs.

It has been reported that it ruled that a key subordination agreement was never properly authorised – clearing the way for Sactwu to pursue repayment.

Sactwu’s investment arm, SIG, in 2013 loaned the media group R150m to help fund a deal to buy Independent Media (Cape Times, The Star and Isolezwe) from its Irish owners.

News24 reports that the loan was supposed to be settled by 2020, by which time it would have been worth about R300m.

A legal battle has been raging for years over a contract that was signed by Sactwu secretary-general André Kriel in 2017.

As part of the agreement, SIG – which is now known as the Independent Media Consortium – ceded its R150m loan for shares in Sagarmatha, an IT group in the Sekunjalo stable that was set to list on the JSE in early 2018. SIG would have then sold its shares.

However, the listing never happened: the JSE cancelled Sagarmatha’s planned listing after the group failed to submit audited financial statements.

Sactwu then learned that even though the listing didn’t go through, the contract contained an open-ended subordination agreement, which meant that the R150m loan would only be paid back whenever SIM’s assets exceed its liabilities.

Sactwu contended that Kriel did not have authorisation to sign the agreement, with Kriel testifying that the details of the subordination agreement were misrepresented. 

News24 reports that he said he was put under the mistaken impression by SIM’s CFO that it was related to the listing agreement and would lapse.

Instead, it was a separate issue and open-ended. In 2024, the High Court rejected these arguments.

It found that the union had to be held to the agreement, even though the results would be ‘unfortunate’.

Full News24 report