Spin does business no favours – why we need an educated media

Ann Crotty, veteran financial journalist and Steven Nathan, CEO of 10X Investmentson, the panel Business of Truth at the Daily Maverick Gathering in Cape Town, 15 August 2018. Photo: Leila Dougan

By Marianne Merten

15 Aug 2018

Business in South Africa should fund independent media more than it does at present because the muckrakers are key to a thriving society. That’s not just financial support to independent media, but also training and resources so journalists have the skills and means to dig into financials, rather than just reporting what companies want to spin. The business of truth came under the spotlight at Daily Maverick’s The Gathering Media Edition in Cape Town.

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Against the backdrop of not only State Capture, but also private sector financial scandals from the tens of millions gone from VBS Mutual Bank to the 2017 Steinhoff saga, the business of business and truth – and media – remains key in South Africa’s democracy.

And while business is there to make money, CEO of 10X Investments CEO Steven Nathan argued on Wednesday that companies could do more to be a good corporate citizen.

Looking at how much business are giving to political funding – “I’ve seen a figure of R1-billion in political donations,” he said – nowhere near that is received by independent media which had been digging up some of the key issues facing South Africa today.

“What is more important for South Africa – more politicians or more independent media?” said Nathan, suggesting that perhaps half of the money that’s being spent on political funding should be re-directed to independent media.

And Ann Crotty, a veteran financial journalist now at Tiso Blackstar, told the audience how she was part of an attempted employee-backed take over of the then Irish-owned Independent Newspapers, from 2008/9. And while business was interested, it fell flat over a requirement to have a major black economic empowerment partner as part of this. “Business wanted a major BEE partner. It wasn’t enough to have majority black employees (among the 600 signatures supporting this bid).”

Mzwanele Manyi, Chairman of Afrotone Media Holdings on the panel Business of Truth at the Daily Maverick Gathering in Cape Town, 15 August 2018. Photo: Leila Dougan

For Afrotone Media Holdings chairperson Mzwanele Manyi, the business of media is business, and being a black-owned business often meant being on the back foot because of unequal playing fields. The Cape Town hotel where he was staying, Manyi said, did not offer his television channel.

“Why do guests not have the choice?”

Manyi bought the New Age– which received millions of rands from government departments and State-owned Entities for its business breakfast - and ANN7 from the Guptas. New Age recently closed down, ANN7 remains on air, rebranded as Afro Worldview.

And there should be no shyness from government to support black business. “As we speak right now Afro WorldView does not get much from government right now. Almost 95% of our revenue is from the private sector….”.

But Manyi dismissed questions that his media empire had been dependent on government funding. Or as panel moderator, Daily Maverick Associate Editor Ferial Haffajee put it: “Was it ever anything else than the PR wing of the Guptas?”

No, said Manyi. “We as Afrotone Media, we do not apologise for government business. Let’s start there… Actually, the Sunday Times would close down without government funding (through advertising). City Press would close down.”

But questions about media being captured have also arisen in relation to Independent Media.

Crotty said the only reason questions around Sagarmatha arose, was because it had failed to adhere to the requirements of the Companies Act.

“It’s quite disturbing… that a company that had not made a profit for a few years and had massive negative equity would get listing…” she said, adding later: “It’s a contrived market.”

Another deal, Ayo, remains under scrutiny, also by the Public Investment Corporation (PIC), the manager of around R2-billion in government pensions in savings, that is exposed in this transaction, as it is in the acquisition of Independent Newspapers.

Ann Crotty, veteran financial journalist and Steven Nathan, CEO of 10X Investments on the panel Business of Truth at the Daily Maverick Gathering in Cape Town, 15 August 2018. Photo: Leila Dougan

The PIC has a R4.3-billion share purchase in Ayo Technology Solutions, previously known as Sekunjalo Technology Solutions. It came under scrutiny, including from the PIC investment committee as the deal as lost R800-million in value for the PIC, which on Tuesday, however, told MPs it remained “comfortable” with the acquisition in a R230-billion information technology (IT) sector.

amaBhunganein late April raised questions whether the Ayo share acquisition was related to generating income for Independent Media owner Iqbal Survé, whose Sekunjalo Investment Holdings led the black economic empowerment consortium 2013 acquisition of the national newspaper group. The PIC is also exposed to the tune of R1.25-billion at the end of March 2018, although it has publicly confirmed there would now be an exit strategy.

Critically, media has played an important role not only in putting the spotlight on such transactions, but also State Capture through #GuptaLeaks – and dodgy private sector dealings.

But more resources, skills and time are needed for journalists to unpack companies’ financial statements and balance sheets.

“I’m told Markus Jooste (Steinhoff ex-CEO) does not believe he did anything wrong… I can’t begin to understand how his mind works. It is a really disturbing thought,” said Crotty.

“We (journalists) need a lot more resources, we need more skills to be able to interrogate (companies’ financials).

“The easier thing to do is to accept what is told by the companies, but that does not even serve the companies.” DM

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