Naspers: Two issues unfairly conflated
As a regular reader of the Mail & Guardian, I often admire your excellent work i n investigating and exposing malfeasance. But the article “Unveiled: Naspers’s Dutch courage and BEE belly flop” (September 2) lacks basic research and fact-checking.
The article vilifies Naspers for being commercially savvy and managing its tax affairs like any multinational corporate entity. It further conflates two unrelated matters and uses that as the basis for innuendo. The separate matters are: • “Naspers is in a tax dispute in the Netherlands where it supposedly has a token presence.” In various countries Naspers sometimes gets tax rebates; sometimes it pays in more. It is constantly discussing elements of tax with several tax authorities and some aspects will go to arbitration in courts. Unlike some internet companies, Naspers has a high effective tax rate — the consolidated rate has consistently been between 30% and 35% of profits in the past years.
Naspers recognises that the tax it pays is an important element of its broader economic and social contribution to the countries it operates in. In the past financial year, the group paid more than R12-billion in taxes in the key countries in which it operates. The innuendo of a token presence in the Netherlands is rather humorous — the group employs 128 people in Hoofddorp, including the chief executive, Bob van Dijk.
• “An investment in the Media24 Welkom Yizani BEE share scheme was less profitable than an investment in Naspers shares on the JSE would have been.” This is obviously true and amounts to comparing apples and oranges.
In South Africa, Naspers has two group subsidiaries: MultiChoice and Media24. Both companies launched black economic empowerment share schemes in 2006. MultiChoice’s Phuthuma Nathi scheme is very successful: a person who invested R2 000 when the scheme was launched now has shares valued at close to R30 000, having yielded a total dividend of R10 400 to date. Because pay television has performed better than print media (which is in decline globally), the MultiChoice scheme has obviously outperformed the Media24 scheme.
When Welkom Yizani was launched, it was oversubscribed fivefold. In 2008 the global financial crisis slowed economic growth and the print media was disrupted by the internet. In light of this, and the effect on Welkom Yizani shareholders, Naspers has forgiven a total of R762-million debt in the scheme. The scheme is now debt-free.
Although the media i ndustry globally will remain challenging, Media24 is widely respected for its innovation and diversification to ensure growth for its shareholders.
I am disappointed that the M&G has conflated two entirely separate issues in an attempt to fabricate a narrative that simply cannot be substantiated.