Iqbal Survé’s Independent Media ‘outsources’ staff to tap Public Investment Corporation billions
Iqbal Survé’s Independent Media – and other companies in his Sekunjalo Investment Holdings stable – have moved dozens of workers to the legally unrelated but Public Investment Corporation-subsidised payroll of AYO Technology Solutions. Among them is at least one journalist – the controversial former Sunday Times investigator Mzilikazi wa Afrika.
Yet more evidence has emerged that AYO, which scored R4.3-billion from the Public Investment Corporation (PIC) in December 2017 under controversial circumstances, is being milked by the wider group of companies under Survé’s control.
The allegedly massively overpriced investment was pushed through by a friend of Survé, the PIC’s then chief executive Dan Matjila. The state-owned investment manager is now in court trying to recoup the money.
In the meantime, it appears that AYO is subsidising the payroll of the beleaguered Independent Media as well as some employees of its own parent company, Survé’s African Equity Empowerment Investments (AEEI).
AEEI’s travel agency, Tripos, and events company, espAfrika, also apparently have employees on the AYO payroll.
An internal list of AYO “shared services” employees dated 17 September 2020 shows 85 individuals employed by the PIC-funded company in a number of “verticals”.
Only 11 of them, however, are identified as actual employees of AYO while eight more work for AEEI, which is Survé’s main JSE-listed holding company and the controlling shareholder of AYO.
A total of 31 employees of “Indy” make the list – some of them easily identified as employees of Independent via, for instance, LinkedIn.
It appears that much of the media group’s IT and administrative staff now “work for AYO”.
Among the more inexplicable AYO employees is Leonard Mzilikazi Ndzukula, otherwise known as Mzilikazi wa Afrika.
Wa Afrika was one of the trio of investigative journalists that broke the now-discredited “SARS rogue unit” stories at the Sunday Times newspaper. He and colleague, Piet Rampedi found their way to the Independent group after leaving the Times and Rampedi is now editor of the Pretoria News.
Contacted by amaBhungane, Wa Afrika said, “I know nothing about that.” He told us we should ask AYO.
amaBhungane sent detailed questions for AYO’s response for this story but received no reply.
Wa Afrika is the only editorial employee of Independent on the list although that does not necessarily mean there are not others on the AYO payroll.
Another 12 employees under an “events” vertical are identifiable as staff of espAfrika, an events company owned by AEEI which runs the Cape Town International Jazz Festival.
Another six employees on the list fall under “travel” and work for Tripos, another AEEI company.
Both espAfrika and Tripos have suffered a great deal due to the Covid-19 lockdowns, AEEI had reported in its latest financial results.
Independent Media’s woes are well-known and it is no surprise that Survé would want to subsidise it using the one good asset he has: the cash sitting in AYO. Unlike AEEI, Independent has no ownership relationship with AYO, though both are effectively controlled by Survé.
Not so Independent
amaBhungane has two partially overlapping lists of employees originating from within AYO.
One, which we reported on last year, is dated February 2019 and already appeared to show a large number of Independent staff on the AYO payroll. We have since procured the payslip of an Independent employee which already in December 2018 suddenly started reflecting AYO instead of Independent as their employer.
A newer document dated September 2020, however, actually seems to show how Independent employees formally became AYO employees en masse.
It was attached to an email sent on 4 November last year by AYO group learning and development manager Lucien Jacobs to Hanson Francis, a member of Independent Media’s IT team, and Ebrahim Baba from AYO’s IT department:
“Hi Hanson & Ebi. The attached list of staff must all have corp services email. They must be responding from this e-mail. All other emails to be diverted to here.”
This instruction meant that the individuals on the list would all get new addresses ending with “@corporateservices” from which they send emails even though outsiders would still send mails to their old addresses at, for instance, “@inl.co.za” for an employee of Independent.
A total of 34 individuals appear on both the 2019 and 2020 lists, almost all employees of Independent. On the older list they have “employee codes” that reflect their employment at Independent, largely in the HR and IT departments. On the new list all these employees have codes clearly identifying them as employees of AYO.
These codes are identifiers that for instance appear on payslips. The Independent format starts with “OM” or “MO” while the AYO format is simply “AYO”. One IT specialist who appears on both lists, for instance, saw their employee code change from M033869 to AYO33869 somewhere between February 2019 and September 2020.
These workers did not change jobs and continued to do what they had done previously.
When amaBhungane approached AYO about the older list last year the company responded with a threat of legal action. If later tempered its position in a second response:
“It should be noted that the Sekunjalo Group companies deploy a centralised payroll processing system… AYO also wishes to make it categorically clear that there are no undeclared related party associations within its group.”
There may very well be a centralised payroll system for parts of Survé’s Sekunjalo group. His main JSE-listed vehicle AEEI controls AYO as well as his other listed company Premier Fishing and Brands. It is, however, evident that whatever central system might exist sits in AYO, not at the level of Sekunjalo.
The change in the stated employer of Independent HR and IT staff between 2019 and 2020 also seems to undermine the AYO PR’s explanation. Independent sits outside the AEEI group.
In addition, the odd inclusion of an editorial employee like Wa Afrika also belies the idea that it is purely a case of centralising administration.
At best the apparent change of employer means that the fragile Independent Media fired (and AYO hired) its staff and must now pay another Survé company market-related prices for services it used to have in-house.
More likely it means that AYO “hired” Independent staff in order to pay their salaries with the dwindling cash pile at AYO which is once again being used to prop up and subsidise other companies in the Sekunjalo group despite there being no basis for it to do so.
According to one affected employee speaking under condition of anonymity it really was that straightforward. Staff were informed in 2018 that they were being moved to a company called African Technology and Media Holdings and in 2019 formally moved to AYO after signing new contracts.
“Absolutely nothing changed other than the name on our payslip,” the employee said.
A rand here, a rand there
There are potentially simple mechanisms for subsidising Independent that can be gleaned from AYO’s financial statements although these statements have been inconsistent in how they treat related party transactions from year to year.
On the one hand, there is straightforward overt support. In the 2019 financial year, AYO bought R15-million in advertising space and another R14-million in “hardware and managed services” from Independent.
In the same year, AYO made a prepayment to Independent for advertising but then immediately impaired the expenditure because of “the uncertainty of the going concern and business operations of a related party who was prepaid to provide a service”. This suggests the payment was made in exchange for nothing.
There have, however, ostensibly been transactions both ways.
AYO charged Independent R3,1-million in both the 2019 and 2020 financial years (which end on 30 August) for “corporate services”. This makes it appear that AYO is receiving money from Independent. However, at the same time as this “income”, AYO impaired R7.5-million it was owed by Independent.
The corporate services fee AYO charged Independent escalated enormously to R8,7-million in just the half-year to February 2021. It remains to be seen how much Independent actually pays.
None of this would be particularly out of character. amaBhungane has previously reported how AYO has seemingly been used to fund companies that used to be units of Independent, rebranding them as investments in cutting-edge new start-ups. DM