Did Sekunjalo breach terms of takeover?

2014-08-10 15:00

Questions are being asked about the competition commission’s plans to re-examine the Independent Group’s takeover by Iqbal ­Survé’s Sekunjalo Independent Media Consortium after news surfaced of planned retrenchments at the newspaper group.

Last year, the commission established the ­acquisition of the local operations of the Independent Group?–?which publishes The Star, ­Pretoria News and The Mercury?–?from its Irish owners would not result in retrenchments

and approved the deal with other conditions related to Sekunjalo’s ownership structure.

But last week, members of the Media Workers’ Association of SA (Mwasa) and the SA Typographical Union (Satu), who work at the group’s production department, received notices of possible dismissal due to ­operational requirements.

According to the letter, the group is “lagging substantially behind its competitors in the production of content across multiple platforms in a streamlined manner” due to the proliferation of digital media.

Consumers were finding news online,creating a crisis of relevance for the company’s print publications, it said.

But Mwasa general secretary Tuwani Gumani said everyone was aware that the business had been stripped “to its barest skeleton” by its former owners and further “emaciation” would not render it sustainable.

Satu’s Sarel Venter said it would do “anything possible” to avoid retrenchments and to minimise the number of staff to be retrenched.

The deputy executive chairperson of Independent Newspapers, Tony Howard, did not respond to requests for comment.

Hardin Ratshisusu, the competition commission’s divisional manager for mergers and acquisitions, said when the commission investigated the merger, there was no information at its disposal suggesting it could lead to job losses.

“If it is now uncovered that certain information was not provided to the commission that would have led to the commission taking a different decision on employment, the commission could investigate this to determine whether the losses are the result of the merger,” said Ratshisusu.

But if it turns out Sekunjalo did not adhere to the conditions agreed on with the commission, it would not be the first company to do so.

Five years ago, the commission approved the merger of Aspen Pharmacare and GlaxoSmithKline’s South African operations subjec to Glaxo granting nonexclusive licences for the manufacture and import of Abacavir, an anti-HIV drug, to other generic manufacturers on the same terms as Aspen.

Vicki St Quintin, a spokesperson for Adcock Ingram?–?one of the manufacturers listed by the commission in its ruling?–?said this week it did not have any agreements with Glaxo on ­Abacavir.

“We do not know the history as the person involved has left the company and we cannot find any correspondence on this matter,” said St Quintin.

Cipla, the parent company for Cipla Medpro –?another manufacturer listed in the ruling?– and other manufacturers, did not respond to ­requests for comment.

Massmart’s 2011 takeover by Walmart was ­approved by the competition tribunal on ­condition there would be no retrenchments for two years.

Preference was also to be given to re-employing 503 employees retrenched when merger talks commenced and Massmart was asked to set up a R100?million supplier development fund.

Ratshisusu said Massmart had missed several deadlines to ­reinstate the 503 workers and the matter is still before the commission and subject to drawn-out negotiations between Massmart and the union.

But according to Massmart’s annual reports, a R240?million supplier development fund is up and running.

The commission asked Glencore Xstrata to limit retrenchments to 80 managers and specialists when the global commodities giant took over the miner two years ago.

It also asked that there be no retrenchments of any of the 100 lower-level ­employees for two years.

Glencore Xstrata has indicated that it shed jobs globally after the merger, but has not quantified the number.

It plans to slash its staff across its iron ore operations by half. It is not clear how many of these will be in South Africa.

Ratshisusu said that the commission issued a “notice of apparent breach” when it seemed there had been noncompliance with a merger condition.

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