Independent News and Media looks set to sell its South African media assets to a consortium led by Iqbal Survé of empowerment group Sekunjalo. MANDY DE WAAL spoke to the BEE player with massive media ambitions.
On Sunday, the debt-laden Independent News and Media (INM) in Dublin announced that, on the back of restructuring aimed to offset some of its financial troubles, the global media company with assets in Ireland, Australia, New Zealand and South Africa had signed a heads of agreement with “Sekunjalo Independent Media Consortium for the sale of INM South Africa for a consideration of R2 billion”.
The deal must still get approval by INM shareholders and SA’s Competition Commission, but if it does go through, a man called Iqbal Survé will be the Indy’s new boss and South Africa’s new media mogul. A load of suitors have had their eye on Independent News & Media SA including (reportedly) Shanduka, founded by ANC deputy president Cyril Ramaphosa; Jacob Zuma’s benefactors the Gupta family; Thabo Mbeki’s younger brother Moeletsi who is both political analyst and executive chairman of book publishers KMM; as well as former NUM official and eTV boss Marcel Golding, who is also the executive chair of Hosken Investment Holdings Limited.
Other contenders said to be interested were Andrew Bonamour of Blackstar, who led the take-over bid for Avusa-cum-Times Media Group, and is now sweeping the decks. (Recent casualties include FM editor Barney Mthombothi, Sunday Times editor Ray Hartley, and editor-in-chief Mondli Makhanya, together with a raft of Sunday Times old-timers.)
But it is Survé, the former ‘struggle doctor’ who, after the necessary approvals, will bring ownership of the Indy back home. This completes the narrative for Independent News Media SA – which owns the Cape Times, Cape Argus, The Mercury, The Star, Daily News and Pretoria News. In 1994 Irish media mogul Tony O’Reilly acquired Argus Newspapers, a major media player at the time. But the deal only went through because of O’Reilly’s friendship with Madiba, and because the acquisition received the ANC’s blessing.
But who is Iqbal Survé, and more importantly, what does he want to do with Independent News & Media South Africa?
Survé was at one time Mandela’s physician, as part of a team that cared for Robben Island inmates. The founder of empowerment investment vehicle the Sekunjalo Group, he leads Sekunjalo Investments Limited, which is listed on the JSE, and which has investments in the telecommunications, marine, technology, healthcare, and biomedical sectors. The listed entity has investments in, or local partnerships with, the likes of Siemens, Microsoft, GlaxoSmithKline, Pioneer Foods, Premier Fishing, British Telecoms SA and Saab SA.
Also part of the Sekunjalo Group is an eponymous private investment holdings company which is the controlling shareholder of JSE-listed Sekunjalo Investments Limited; and an equity fund. The latter “supports specifically influential black individuals and black-owned businesses that have significant influence in the South African economy, good deal-flows and access to good transactions, but who don’t want to access public capital markets and prefer private shareholders.”
But do Survé’s interests with the Swedish defence company Svenska Aeroplan AB, which retails the “next generation fighter aircraft Gripen E” have anything to do with his bid for the Indy? Sekunjalo is invested in industries that fit hand in glove with government, while the ANC’s media aspirations are well known.
Is Survé’s a business or political decision?
When Daily Maverick puts it to him that the market could read this as a political move, Survé’s response during a telephonic interview is definite. “That is absolute nonsense. Anybody that knows me knows I am very independent,” he says emphatically.
“The decision about what goes into the newspaper won’t be mine. It is that of the editorial team. I have gone on record as saying there will be an editorial advisory board which is independent, will have a policy and a charter and will provide independent guidelines for journalists and editors. Anyone that suggests otherwise clearly doesn’t know who I am. It is ironic that this is being said while the people I was competing against have very strong political affiliations,” the one-time medical doctor says.
For Survé, there’s no doubt that this deal makes good business sense. “Independent is a highly profitable business – the profits are publicly disclosed and you are talking almost R350 to R400 million a year in profitability. If you look at what we’re paying for the Independent, we are probably paying two thirds of what those other guys paid for at Avusa (now Times Media Group),” Survé says on the phone from Cape Town, adding: “I have had Citibank’s global media team as my advisors. They are not ‘Mickey Mouse’ by any means, and it has cost me a fortune to engage twenty of them in London, New York and Africa partners. We have looked at this business thoroughly. We are the only people that have done an extensive due diligence, and I think that is why the Irish thought we were very serious, even though the offer was much lower. We know the business well, by the way. We are excited by it, but it is a business that needs a SA shareholder – that’s what it needs.”
But isn’t R2 billion a little rich to buy what is essentially a legacy business; aren’t newspapers the world over in trouble?
Survé balks at the question. “People who are saying that we paid a high price don’t know what they are talking about. If you look at the three other major bids we were up against, they were R2.6; R2.5 and R2.4 billion. We came in at R2.0 billion and there was another bid that came in just as they (INM) signed the agreement with us. I doubt that all these parties are mistaken about the price. We bought at the right time. If we bought this business two or three years ago, we might have paid a hell of a lot more. It is a super business with a strong title base, a strong content platform, good history and there are good people in the organisation.”
Surve’s primary interest is in business development in Africa, he says – and he believes that there is ample opportunity to expand media interests here. “You may know that I am invested in oil and gas in Africa, and that is where I created my wealth. I was one of the first to go into a number of African countries to get those kinds of concessions, and eventually sold it to the Qatari Royal Family. I am very bullish about Africa and Independent is a platform for expansion into Africa in the media sector. If you look at newspapers in India, Brazil, Vietnam, they are growing, they are not declining. It is a question of where and how you position the newspaper,” says the founder of Sekunjalo. (The Qatari Royal Family is headed by the Emir of Qatar, Sheikh Hamad bin Khalifa, who gave Al Jazeera a QAR 500 million life boat after its launch in the mid-nineties.)
“Take a look at Isolezwe (the Zulu daily owned by Independent). What I love about Independent is that the KZN team that have built the Isolezwe brand have done a phenomenal job – it is almost as big as the Sunday Times now. If you take that same model and replicate it in Limpopo, Free State and the Eastern Cape, and it is not just about making commercial sense – it is also about the heritage of languages. I think it makes good commercial sense to do that, I think it makes good media sense… For the price we are getting it at, Independent is a good deal.”
But Survé is quick to add that this deal isn’t just about commerce. He’s a patriot, he says, a nation builder. A man who wants to leave a legacy and believes that a media business that creates mass market newspapers in the mother tongue of the every man and woman could be the work of a true patriot.
Self-described as a person who grew up in poverty “like virtually all non-white South Africans during Apartheid”, Survé’s profile says that he served in the ANC’s leadership structures during the seventies and eighties. It was during this time that Survé earned the moniker ‘struggle doctor’ because of his care for activists tortured in detention as well as Robben Island prisoners.
In the mid-nineties Survé left medicine to start Sekunjalo. “Survé, like many of his comrades, grew frustrated by the huge economic disparities that existed in South Africa, even though its progressive constitution afforded all citizens equal rights. It seemed the government’s Black Economic Empowerment (BEE) policies were only enriching a few,” a corporate history reads. At the time the former doctor wanted to “find ‘a gentler capitalism’ that stressed putting people before profits and talent development as a means of raising the lives of previously disadvantaged South Africans”.
“Since I left medicine many years ago, I have done probably about 40 acquisitions, some large, some small. Some have been spectacularly successful, some have not been so great – but by and large 90% have been winners,” Survé tells Daily Maverick.
By far the worst investment Sekunjalo made was at its genesis, when it bought a minority stake in a company called LeisureNet, the owners of a chain of fitness centres called Health & Racquet. What followed was a corporate scandal of massive proportions which cost the empowerment company some R180 million and which very nearly felled them. What happened subsequently – Sekunjalo’s recovery – has become the stuff of a Harvard Business School case study.
This could be why Survé rankles when he’s asked whether his decision to buy the Independent was politically motivated in a country where doing business with government automatically casts an unfavourable shadow, given the levels of graft and tender manipulation SA’s facing. Survé’s been badly burnt by a breach of trust before.
“If you know anything about me you know that I operate with incredible integrity. I have a standing rule in Sekunjalo: if you do one thing wrong you are out of this company. And never once has Sekunjalo been found guilty of anything improper ever, because my management knows that. I have a guideline, we have policies, we have charters and I personally don’t believe in that kind of nonsense,” Survé asserts.
But Sekunjalo was embroiled in controversy late 2011 and early 2012 after a consortium led by the investment company was awarded an R800 million tender to maintain and support the maritime protection assets of the Department of Agriculture, Forestry and Fisheries. The DA declared that this would make Sekunjalo – which owns Premier Fishing – both the “player and referee over” the country’s marine resources. The contract was subsequently dropped by Agriculture Minister Tina Joemat-Pettersson, and the DA’s Pieter van Dalen was lambasted by Sekunjalo for raising the matter.
But what about Sekunjalo’s long association with Siemens, the German company that paid $1.34 billion in fines after bribery investigations?
“Siemens globally had some issues, but South Africa was one of the businesses globally that was cleared. And by the way, that was because of me, because I insist that under no circumstances will I participate in anything that is irregular. You have a morality and people have struggled for this country, and if you start doing that you start stealing from ordinary people. You mustn’t do that and my management will tell you that when they meet with me on a regular basis, I emphasise this point,” Survé states.
What makes sense about the Sekunjalo bid for Independent Media is leveraging the company’s technology prowess (its medical technology investments have become quite the cash cow of late).
“I have invested in about 11 technology companies to date. I chair the World Economic Forum’s Community of Global Growth Companies, which has a lot of technology companies on there, which includes Google and others. So I have managed to make friends with a lot of tech billionaires globally, and I am a techie myself. I love technology and I am excited by the convergence of print and online. Independent has a strong online presence but I don’t think they have used it as much as they could.”
Does Survé have Koos Bekker-type aspirations?
“I have great admiration for what he has done, and what he has done serves as a great inspiration for what can be done in Africa. I think we are going to compete head on with Naspers and others that are going to expand into the continent. I go to China at least twice a year in my capacity as chairing the Summer Davos meeting, and I can tell you that I only admire what Naspers has done. I think it is a great company, and even their Media24 company – Esmare Weideman is very clued up, she knows what she is doing,” he says.
“I am not buying this to sit on it. It is a live organism, if you like. It has got to have energy (using an analogy from my past as a medical doctor), and it has to morph into something more beautiful and successful. I think the growth lies in Africa and we have to take it there. I have taken lots of other businesses there, and we have done very well out of that, and we want to continue to use the same formula for taking other business into Africa for the media business,” Survé adds.
“I live in the same house that I lived in since I was a doctor. I have the same family. I have the same car. At the end of the day I could live anywhere in this country or anywhere in this world. The point is that I choose to live my life like this because I believe you lead by example. You don’t focus on material things – you focus on what matters in a country. To me what matters is uplifting the economy of our country, taking people out of poverty. I am strongly optimistic about this continent and media is very important for that because we need to start attracting very strong foreign investment into our continent and into our country. We need to do that in order to create jobs, to lift our society, to get away from this black and white nonsense, to get away from all these divisions in South Africa,” he adds, when Daily Maverick asks Survé about his ideological stance.
“The media can play a very important role in nation building – I want to live on this continent. I think you do, and I think that our children do, and I think we must create that environment. You know I was very close to Madiba, and we were gifted in having someone like that in our midst. I think it would be a travesty of justice if we didn’t take that goodness and do something with it.”
And then he talks about his wealth. “I don’t even spend one thousandth of the wealth which I have. I still live in the same place that I used to live. What am I to do? My process is to invest back into businesses, to grow them, to create employment and to grow our country. And I want to say this in a very modest kind of way – I wish that more of our business people would do that, because we have to give back. We have to build our societies. This thing of conspicuous consumption must stop now.”
Survé says all the right things. That he’s a moral and values-loving patriot who wants to make South Africa (and Africa) great by building a mighty media empire that will uplift the masses, while creating jobs and contributing towards the local and continental economy. Only time will tell what will come of those dreams. One thing is sure, however: things can hardly get worse for the company that’s been so badly mismanaged by their cash-hungry Irish owners for 19 miserable years. DM
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