Cape Town - Mzwanele Manyi, sole owner of the company that bought Gupta-owned media units ANN7 and The New Age, announced the shareholding of his company at the press briefing in Johannesburg on Wednesday.
Despite saying he also wants to dispel the myth surrounding the special purpose financial vehicle used to purchase the two media entities from Oakbay Investments, Manyi dodged most of the questions by journalists on how he plans to repay the Guptas.
Oakbay Investments said in a statement earlier this month that Manyi-owned Lodidox bought ANN7 (Infinity Media) for R300m and The New Age (TNA Media) for R150m through vendor financing. This in effect means that the Guptas loaned Manyi the money to acquire the media interests.
Here is Manyi's full statement:
In my capacity as chairperson of Lodidox (Pty) Ltd, I have received numerous demands from several media entities to grant access or make public the shareholders’ register of the company.
These demands notwithstanding that they are not unlawful, are rather unusual to make to a private, start-up company and not often directed to other companies in South Africa in similar circumstances. Two media entities have even sent lawyers’ letters to have access to the shareholders’ register and threatened to institute criminal charges against me if I did not comply.
My initial stance to meet them in court was informed by my right to privacy which I later decided to waive in the public interest. It was indeed disappointing but not unexpected to see rather malicious reporting and demeaning innuendos in media coverage related to the purchase by Lodidox of media entities, The New Age and 24-hour news channel ANN7.
I have decided in the spirit of transparency and public interest to make available to the public the details of Lodidox’s shareholders’ register and other related documents with an express hope that the baseless negative reporting, speculation and the rumour-mongering will come to a halt. I have brought all the shareholder related documents for public viewing by media and trust that the information witnessed will be reported to the public to correct the malicious narrative.
I also want to dispel the myth surrounding the special purpose financial vehicle used to purchase the two media entities from Oakbay Investments. Vendor financing is not an invention of Mzwanele Manyi, it has been a common feature of structuring business deals in South Africa in recent years, especially in affecting black economic empowerment.
Some of the more prominent vendor-financed deals in recent times include Lonmin providing Shanduka with vendor financing amounting to R2.26 billion in 2011. This made it possible for Shanduka to acquire a 50.03 percent stake in Incwala, Lonmin’s designated BEE vehicle.
Patrice Motsepe started his mining business with an $8 million loan from Anglo American. With repayments made from future profits.
There were vendor-financed deals between Dimension Data and Andile Ngcaba’s Convergence Partners in 2012 and Shanduka giving a 10.5 stake in the company to Lilitha, a women’s empowerment group in 2009.
There is nothing unique nor original with the vendor financing provided by Oakbay Investments to Lodidox for the purchase of the two media entities. The hypocritical response to it exposed the ignorance if not malice by those who made the negative comments.
I have concluded the transaction with confidence about the viability of the two media companies. This is based on the resilience and profitable growth potential which The New Age showed over the six years since its launch. In addition, the ANN7 is showing a profit and a reasonable return on the several hundred-million rand capital investments made since 2013.
I reject with contempt the calculations and forecasts made by several publications based on unrelated minority share disposal figures in the public domain versus the profitability of The New Age and ANN7. The intention is clearly to cast aspersions, undermine and denigrate the historically significant purchase of a media entity by a black person and an African.
The New Age and ANN7 employ close to 500 staff whose jobs have been saved by this deal and we plan to attract new talent and grow the business. We are encouraged by the early signs of renewed confidence in our two entities following the acquisition.
In conclusion, my disclosure of the shareholders’ register and related documents is an indication of my commitment to transparency and good corporate governance. I hope that other media companies will demonstrate the same openness in their business dealings when called upon to do so.
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