Did Sekun­jalo breach terms of takeover?

CityPress - - Business - MOYAGABO MAAKE moyagabo.maake@city­press.co.za

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 Glaxo-Smith Kline’s South African op­er­a­tions sub­ject 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.

The busi­ness had been stripped ‘to its barest skele­ton’ by its for­mer own­ers and fur­ther ‘eman­ci­pa­tion’ would not ren­der it sus­tain­able

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