Mbeki+men+in+R7bn+bid+to+own+S+Times,+Naidu+and+Piliso,+S+Times



=Mbeki men in R7bn bid to own Sunday Times=

Buddy Naidu and Simpiwe Piliso, Sunday Times, Johannesburg, 4 November 2007
//Media group owned by top state officials makes huge offer for newspaper’s holding company//

President Thabo Mbeki’s political adviser and a top government official are among a group who want to take over the company that owns the Sunday Times.

Koni Media Holdings, a company belonging to Mbeki’s adviser Titus Mafolo, Foreign Affairs spokesman Ronnie Mamoepa, former chief of state protocol Billy Modise and a businessman have launched a R7- billion bid for 100% of Johncom. This is despite Mvelaphanda Holdings acquiring 30% of Johncom this week.

Following Tuesday’s announcement that Mvela had bought the stake, the Koni shareholders scrambled to raise money and have their bid considered by the Johncom board.

The bid, likely to go before the company’s board this month, has been slammed by media analysts and at least one senior ANC MP as a way of seizing control of the country’s most influential newspapers.

Johncom also owns The Times, Sowetan, Daily Dispatch and the Herald and is a 50% owner of Business Day and the Financial Mail.

The Sunday Times has established that Koni Media has been in talks with the Public Investment Corporation (PIC) — which manages more than R700- billion of assets on behalf of the government employees’ pension fund — to raise cash.

ANC MP Kader Asmal said it was “astonishing that civil servants are able to develop time and energy for what is really a takeover bid”.

Asmal said that at issue was the danger of control of newspapers by politically active people. He urged the Department of Public Service and Administration to “scrutinise this very carefully”.

Approached for comment, Mamoepa said: “No chief, no chief, no comment.”

The PIC’s chief executive, Brian Molefe, said no deal to fund Koni Media’s bid had been concluded. “The PIC has not agreed to any funding. There is no truth that funding has been approved by the PIC for this [deal],” he said.

Koni has also approached Rand Merchant Bank and Old Mutual for funding.

Coronation Fund Managers, which has a 6% holding in Johncom, was startled by the news yesterday.

Johncom chief executive Prakash Desai said he had not been approached by Koni Media. Attempts to contact Johncom chairman Mashudu Ramano yesterday were unsuccessful.

On Tuesday, presidential hopeful Tokyo Sexwale’s Mvelaphanda Group reached agreement with fund management group Allan Gray to buy up to 30% of Johncom’s media unit for about R1.4-billion. Mvela made a pledge to uphold editorial independence.

Mvelaphanda chief executive Yolanda Cuba said yesterday her company had heard about other interest in acquiring a stake in Johncom only after signing its deal this week. She said: “We cannot stand in the way of anyone wanting to make a bid.”

Asked if Mvelaphanda would now try to increase its stake, she said: “I cannot comment. That is speculation.”

Rajay Ambekar, a portfolio manager at asset management company Cadiz African Harvest, estimated that the 70% of Johncom not in Mvelaphanda’s hands was worth between R3.5- billion and R4.2-billion. Koni’s R7-billion offer therefore signals serious intention to take control.

Hennie van Vuuren, head of corruption and corporate governance at the Institute for Security Studies, said there were similarities between this bid and the way the former apartheid government had pumped money into setting up the Citizen newspaper to counter negative media coverage.

“With the Info scandal, government money was laundered into the hands of one individual to buy a newspaper as well as to influence national and international opinion. It may ultimately be dressed up as a simple business transaction, but buying a large stake in the most influential media group in South Africa at this moment must raise alarm bells.”

Yesterday Koni Media’s chief executive, Groovin Nchabeleng, said his company had been in discussion with Johncom for “months or weeks”. He refused to divulge who they had been negotiating with at Johncom.

The decision to buy “integral media assets” came after Koni bought a majority stake in international advertising group Leo Burnett SA last year.

He said he was the majority shareholder and said that Mafolo and Mamoepa “added value” to the company, which was set up last year.

Mbeki’s spokesman, Mukoni Ratshitanga, said he did not know if the President knew that Mafolo was involved in this bid.

Nchabeleng would not confirm the R7-billion offer, but said an announcement would be made soon.

“We want to build a media company that can be flagged as African and in a very positive light,” he said.

The Sunday Times, in particular, has recently come under heavy criticism in government circles and even sparked a threat by Minister in the Presidency Essop Pahad to withdraw government advertising from the newspaper.

Yesterday Wits University journalism professor Anton Harber said the Koni deal was “worrying” and was a clear attempt by “surrogates of the government and the ruling party to get control of one of the most important independent voices” in the media.

“Not just democracy, but the government itself will be weakened if the purpose is to prevent the Sunday Times from its habit of publishing stories that can be embarrassing to government, its members or the ruling party.

“One can only hope that shareholders recognise the importance of keeping the paper’s independence.”

Author and former Cape Times editor Ryland Fisher said: “If you [own] the SABC on one hand and the Sunday Times on the other, public opinion can be controlled, and that is what’s scary.”


 * From: http://www.thetimes.co.za/PrintEdition/Article.aspx?id=604481**

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