PIC is 'at odds with common practice'
CAPE TOWN – The Information and Communication Technology Union (ICTU) has said the move by the Public Investment Corporation (PIC) to liquidate a fully operational entity, albeit loss-making, is almost unheard of.
The PIC has invested significantly in companies related to Sekunjalo Investment Holdings (SIH). However, of late the PIC and SIH are at loggerheads over various agreements and processes.
The PIC has gone as far as filing an application for the liquidation of Sekunjalo Independent Media (SIM), which owns Independent News and Media SA (INMSA).
“The best practice is that investors back their investment and management with further investment should the company face challenges and what PIC has done is at odds with common practice,” said spokesperson Thabang Mothelo.
A process in these circumstances would have been better served by appointing a business rescue manager in terms of the provisions in the Companies Act of 2008, said Corrie Kruger, an independent analyst.
Mothelo said SIM newspaper group, being run by a black-owned company, was the country’s pride and represented progress in transforming the media space. “The move to liquidate INMSA could be counter-revolutionary,” he said.
“SIM as an entity offers a unique interest from loyalty to the country in broad terms. This means in the event it manages to make a profit, such profit would be reinvested in the country as opposed to foreign investors whose profits are taken to their host countries. Retrenchments could be mitigated but foreign investors are pure capitalists who have no loyalty to workers so SIM should be saved for all intent and purpose.”
Mothelo said the union was not aware of other media business having paid their loans from the PIC in full. And if they had not, yet they are in a similar industry, the risk is, therefore, more or less the same. “The question would be why are they being excluded?”
Mothelo slammed the PIC for not handling the SIM/INMSA matter with the necessary discretion so as not to alarm its workers and customers, as well as protecting its value. “Skilled workers don’t like to be attached to shaky business when they can utilise their skills elsewhere, so it is absolutely important that PIC treads cautiously in this matter.”
He warned that public spats were a constraint to executive management whose sole business was to focus on continuous improvement of services and products and to inspire confidence in potential customers.
Analysts were of the view that the PIC and its legal team were finding it difficult to prove that erstwhile chief executive Dr Dan Matilja did not use his discretional powers correctly.
They said the negative publicity from the squabble between Africa’s largest asset manager, South Africa’s largest newspaper group (a threat to media freedom) and a fully black-owned conglomerate did not do well for South African business confidence.