Setting the record straight – once again
This campaign has surfaced as overt racism, in our opinion
LAST week, Independent Media journalists reported on an apartheid-era style dirty tricks operation aimed at Independent Media, Sekunjalo Investment Holdings, Sagarmatha Technologies, AYO Technology Solutions (AYO) and Dr Iqbal Survé. This disinformation campaign, originating from journalists at competitor media houses (Ann Crotty of Tiso Blackstar, publisher of Sunday Times, Business Day, Financial Mail etc and Sam Sole from amaBhungane), has similar patterns to Stratcom.
Stratcom was a media strategy run by apartheid technocrats using journalists in mainstream media to discredit prominent individuals and organisations that fought against apartheid, thereby undermining the legitimate fight for freedom and democracy.
In the last two weeks, Independent Media and Sekunjalo have twice set the record straight and pointed out that the above individuals had selectively extracted information from the published Sagarmatha pre-listing statement (PLS) and deliberately distorted the facts to scupper the listing of Sagarmatha Technologies on the JSE.
We pointed out there were 29 inaccuracies in the articles by these journalists.
Despite widely disseminating our responses to competitor media houses, almost without exception they did not publish our response and continued to peddle the lies, thereby denying their audiences the right to our viewpoint. This is, of course, the most basic tenet of journalism and the lack of being permitted a fair response shows the unethical journalism that is paramount at our competitors. Hence our drawing of a parallel with Stratcom.
Yesterday, Sole once again published factually incorrect information with our competitors about AYO, a company in which Sekunjalo has invested, knowing full well that AYO is currently in a closed period, as per the JSE listing regulations, and not in a position to respond. This was communicated to him by the AYO executives.
He failed to inform his readers about this vital fact and instead purposefully created the impression that AYO was not willing to respond.
Sole again used selected information from an AYO PLS statement published by the JSE, information publicly provided by the company with the utmost transparency and which is required in public markets, to distort the real investment case.
As an example, he misrepresents the facts about the net asset value (NAV) of these companies and its relationship to the valuation.
Any reasonably intelligent investor would know that technology companies the world over are not valued on NAV but are valued using different market valuation methodologies. The current top five companies in the world (as we have reported on several times) have a market capitalisation of $4 trillion (R48 trillion) and, should we use Mr Sole’s approach, these companies would be valued at less than $100 million in total.
Similarly, he suggests that one shareholder can benefit to the detriment of others, thereby completely disregarding the regulations of the JSE by which all shareholders, including the Public Investment Corporation (PIC), must be treated equally.
The ultimate irony is that Sam Sole publishes this with Naspers and Media 24 (News24 and City Press), the very same media houses which had a corrupt relationship with the apartheid state and its security apparatus, according to recently revealed documents and books.
Had Sole bothered to use the same NAV calculation on Naspers, for example, then the value of Naspers (excluding its investment in Tencent) would not be R1.3 trillion but closer to R1 billion rand, thereby nullifying his very argument.
More importantly, he fails to point out that Koos Bekker (the chairperson of Naspers) and many other wealthy Afrikaner families, benefited from the PIC investment into Naspers when it was loss-making, just prior to its Chinese investment.
The PIC capital allowed Naspers, along with the licences given to Naspers by the government, to invest in Tencent in China.
Sole is silent about the fact that Naspers’ wealth has benefited these families and that they were given the opportunity, with investment from the capital markets, to drive innovation and entrepreneurial investments in South Africa and globally.
He denies Sekunjalo this right and calls into question the support for the investment strategy by investors such as the PIC. It is a case of the pot calling the kettle black.
Is it Sole and our competitors’ real agenda to deny Sekunjalo and other black companies access to the capital markets, especially the JSE, by intimidating the JSE’s largest investor, the PIC? If so, this is manipulative, racist and anti-transformation, and against the constitution we fought so hard to achieve.
For the record, the JSE has a market capitalisation of more than R12 trillion for all its listed companies. Less than 1% of these companies are founded by black entrepreneurs and are majority black-owned, controlled and managed.
Assuming the average PIC investment in JSE listed companies is 20% and the PIC is invested in about 12.5% of the JSE (R1.6 trillion), then the total PIC investment in companies founded by black entrepreneurs and majority black-owned, controlled and managed, is R24 billion.
Thus 24 years into our democracy, the PIC’s investment in JSE-listed companies founded by black entrepreneurs – and which are majority black-owned, controlled and managed – is a mere R24 billion out of a market capitalisation of R12 trillion.
This should be a concern for all South Africans. It also speaks to the need to fast-track access to capital markets for black entrepreneurs and companies.
Put differently, the PIC has invested R1.574 trillion in white companies and corporates and companies whose owners and controllers are white trusts and white managers vs R24 billion into black companies. White families, including the Rupert, Oppenheimer, Wiese, Jooste, the Moutons and Saad families and others, have become wealthy with the help of the PIC investment. Essentially, these businessmen utilised the capital markets, including the capital of the PIC, to create family wealth for themselves. Now, there is nothing wrong with that. This is how the market economy works. These businessmen were entrepreneurial (sometimes with a bit of help from the state, as with Naspers) and hard-working and have built up businesses over the years and they deserve their success.
Despite this, Sam Sole and other journalists have run a campaign against the PIC investing in majority black-owned, controlled and managed companies. What could be classed as underlying, subliminal racism has surely now surfaced as very overt racism, in our opinion.
The PIC and others, such as regulators, should not be intimidated to achieve anti-transformational and anti-competitive collusive agendas. This undermines our constitutional democracy and the right for all South Africans to be given equal opportunities.
It is time journalists who were used by apartheid-era security services and intelligence agencies – and who continue to be used today, by others, to peddle disinformation and lies – come clean. A failure to do so undermines the good work being done by most journalists who are decent and who strive to give a balanced view. South Africa is owed an explanation. We call on you to have the decency to be honest about what you have done and continue to do. South Africans are forgiving and will forgive you.
We will not be intimidated by the blatant agenda to undermine legitimate businesses and attempts to deny access to the capital markets, especially the public capital markets, to black entrepreneurs and black-owned businesses. We will continue to run our business with entrepreneurial skill, innovation and creativity; and follow the highest standards of integrity, as we have done for more than 20 years. We will continue to provide work and employment and training for tens of thousands of South Africans and Africans. We will continue to lead the way and provide hope for the millions denied access to the market economy by their colour, their history and their lack of resources – a direct consequence of apartheid-era policies and strategies. We cannot allow the past to become the present to determine the future.
Sekunjalo