Too much emphasis on equity – O’Reilly
“A LOTof people in South Africa and internationally are disappointed by the over-reliance placed on (black empowerment) equity stakes as it has not achieved the hoped-for consequences,” Gavin O’Reilly, the chief executive of Independent News & Media (INM), told Business Report on Friday.
O’Reilly was commenting at the conclusion of a tense annual general meeting, which was held in Dublin on Friday.
The meeting saw a resumption of public hostilities between the group’s two dominant shareholders, the O’Reilly family and Denis O’Brien.
The former holds 13.3 percent while O’Brien holds 22 percent of INM, the holding firm of Business Report.
Despite his significantly larger stake O’Brien was unable to prevent Leslie Buckley, one of his key representatives on the board, being ousted as a director.
The meeting’s dramatic tone was heightened by the presence of South African shareholder activist Theo Botha.
During the meeting Botha questioned what the company was doing about black economic empowerment in South Africa and what plans had been made to include some black economic empowerment (BEE) entities in the South African shareholder structure.
O’Reilly replied that INM management was “looking at its empowerment obligations all the time”. He noted that the group had achieved category 5 on its BEE scorecard. “We have achieved 80 percent but are targeting 100 percent.”
After the meeting O’Reilly said, in response to recent comments about the ownership profile of South African media companies: “There will always be special interest groups that push for equity stakes.”
He added: “If South Africa wants to continue to be open for business there will have to be less restrictions not more.”
O’Reilly said that the recent decision on the Walmart acquisition of Massmart had sent out a clear message that South Africa was open for business and that this would be very well received by multinational companies that were interested not only in investing in South Africa but in southern Africa.
During the meeting Botha also referred to the recent closure, after over 100 years, of the INM’s printing operations in the Cape and questioned what if any plans INM had for any capital expenditure in South Africa.
O’Reilly replied that the group “wanted to invest in its products and not its printing presses”.
He added that INM was very happy with Caxton, which had assumed the printing obligations in the Cape.
O’Reilly remarked that it was likely to be only a matter of time before Caxton provided the printing requirements of the Gauteng operation.