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Naspers pays a R12bn price for doing the right thing by...

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Naspers does the right thing by axing its Russian platform, but pays a R12bn price

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Toby Shapshak is publisher of Stuff (Stuff.co.za) and Scrolla.Africa.

What is the price of doing the right thing? It’s an eternal question that has plagued philosophers and businesspeople for generations. Now, thanks to Naspers, we have an answer: R12-billion.

That’s what Naspers has written off for its 27% stake (worth $769-million) in VKontakte, the Russian social media website that is that country’s answer to Facebook.

Until three weeks ago, Naspers’ investment in Mail.ru – as it was then called – was hailed as prescient. Then Vladimir Putin committed Russian economic suicide by invading Ukraine.

Putin has badly misplayed his hand, overestimating his armed forces’ prowess while underestimating his enemy and the ferocity of economic sanctions from an emboldened West. Putin’s aggression has given Nato’s petulant and squabbling children an enemy to unite against and a reason for being again.

If only the refugee crises in the past two decades in Congo, Syria, Libya or anywhere else where the refugees weren’t “European people with blue eyes and blonde hair being killed” – as Ukraine’s deputy chief prosecutor David Sakvarelidze told the BBC – had inspired the same outpouring of help.

This is a no-win global conflict where everyone is the poorer for the bare-chested Russian president’s show of military prowess – or lack thereof. Through the unfiltered lens of TikTok, the world is now seeing the brutality of the Russian shelling – as well as the incompetence of the supposedly mighty Red Army in the first few days. Clearly a less brilliant fighting force than Putin and his generals believed, the Russian soldiers have resorted to indiscriminate shelling of residential housing blocks. It is misery to see.

Against this backdrop, no company that holds human rights dear nor believes in the rule of law can dutifully continue to operate in Russia – even if it costs R12-billion to do the right thing.

There has been a lot of criticism about the Prosus offshoring and Naspers’s leaders, but they will be on the right side of history – unlike the ANC, which is doing its usual brilliant job of siding with tyrants.

“As a consequence of these sanctions, Prosus asked its directors on the VK board to resign their positions,” said Prosus CEO Bob van Dijk of the three board seats.

It was “extremely concerned about the continued conflict. It is in the world’s interest to find a solution that provides an immediate de-escalation and secures long-term peace and stability in the region and beyond. Our primary concern is the wellbeing of our employees, and we continue to support all of our people in the region.”

It’s an unenviable position to be in – one of many that Putin has forced businesses into. Holding on to the investment, which has always been a jewel in Naspers’s emerging market crown of connectivity, is untenable. It was always considered one of former CEO Koos Bekker’s more adroit investments, demonstrating his ability to spot the good prospects in a range of emerging markets and proof that his bounty investment in Tencent wasn’t a fluke.

But when VK Group CEO Vladimir Kirienko was named in a US sanctions list, Naspers – through Amsterdam-based Prosus – had its hand forced. Unlike the ANC, it didn’t victim-blame Ukraine for not being willing to find a peaceful resolution to being invaded by its gung-ho neighbour.

Now, like BP, Shell, Apple and Samsung, Naspers is doing the morally correct thing – albeit at huge cost, not least to the 4,000 staff it has in Russia.

With Putin rushing into what is being called the first information war, but is really the first economic war, what do you do? How do you react when a deranged and irrational tyrant invades a neighbour while sitting on the second-largest stockpile of nuclear weapons in the world?

You can’t arm or directly help Ukraine – even though the West should have known better than to poke the bear (has that ever been a more appropriate use of the old idiom?) with Nato’s eastward sanction. Don’t poke the bare-chested dictator who has siphoned off his country’s wealth, which only accounts for 2% of the global economy, because he’s deranged enough to indiscriminately shell residential suburbs and mad enough to set off a nuke. The world was duly worried when former US #Presidunce Donald Trump was in charge of the nuclear football, but there were checks and balances against such rashness, if not for his Twitter account. Cofveve.

So sanctions it is. And soon, just like South Africa is holding back the darkness by burning nine million (nine million!) litres of diesel a day, Europe will find out what life without consistent power is like.

The only economic sanction that will cripple Russia’s economy and upend Putin’s aggression is stopping the purchase of Russian oil and gas. That’s the only income the country has. It’s the economic equivalent of a nuclear bomb – and one that will damage both sides, Russia and European gas customers.

Given the pace at which Europe goes through last-resort sanctions – US President Joe Biden banned imports of Russian oil the night I wrote this – it’s likely that we’re going to get to that economic A-bomb sooner rather than later. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

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  • Credit to Naspers for doing the right thing. other major companies should take note of this action like those involved in state capture and corruption.

  • There was no real choice in the decision to shred the mail.ru share certificate. One of putin’s mates sold voting control to a state owned entity in December 2021 already so the write-off was overdue.

    China can do the same and take anything they want in China. Far better to stick to free and competitive markets rather than totalitarian states with state endured monopolies. Eventually you will get squashed.

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