14 June 2024 | 01:27 AM

Guptas sue for 27.5% of Independent Media

Key Takeaways

Picture: Iqbal Survee – David Harrison, M&G

The Gupta family is “fighting tooth and nail” for a large stake in Independent Media, South Africa’soldest and one of its most prominent newspaper companies.

The dispute centres on a pact thatthe company’s chairperson, IqbalSurvee, made with the Guptas in2012, when a consortium he led was negotiating to buy thenewspaper group.

Surve conditionally offeredthe Guptas a stake that wouldhave amounted to 27.5% of theIndependent group.

Under the agreement, the Guptas would also have appointedIndependent’s top managers, wellplaced sources told amaBhungane.

But the deal was not consummated and for the better part of three years, the Guptas and Surve have been locked in a dispute thatincluded a protracted secret arbitration process.

The fight has now moved to the North GautengHigh Court, where Oakbay Investments – the Guptafamily’s holding company – is suing Surve, acompany in the Sekunjalo group and an accountantlinked to the arbitration.

The Gupta family, which has been publicly accused of abusing its relationship with PresidentJacob Zuma, already owns The New Age newspapergroup and TV station ANN7.

A company in the Sekunjalo group has been engaged in a protracted legal battle with Oakbay Investments”

In 2012, Surve and his Sekunjalo group led abroad-based consortium that bought Independent from its Irish owners for R2-billion.

The deal was supported by the Public Investment Corporation, which  said in Parliament this week that it committed R888-million on thepremise that the new, black owners would attract a biggershare of state advertising.

But, according to theinvestment corporation’spresentation to MPs: “This increased spen[d] by government[has] not materialised yet.”

Companies linked to theChinese government also took a20% stake in the newspaper group.

The  political nature of the transaction sparked public controversy, but whatwas not known at the time was that Surve gave theGuptas’ Oakbay a conditional option to take half ofhis consortium’s 55% stake in the newspaper house.

What value the Guptas brought in return for theiroption is unclear.

This week, Surve’s lawyer Adam Ismail confirmedthe dispute, saying: “A company in the Sekunjalogroup has been engaged in a protracted legal battlewith Oakbay Investments.”

“Surve and the Sekunjalo group are of the emphatic view that Oakbay Investments has no legal right to any shares in the Independent Media”

Ismail said the arbitration was “but one chapterin a legal tussle spanning almost three years now”.

A number of sources told amaBhungane that Surve had lost a first round of arbitration.

Despite this, Ismail said: “Surve and the Sekunjalogroup are of the emphatic view that OakbayInvestments has no legal right to any shares in theIndependent Media.

“The legal battle continues, having now moved tothe high court. As the matter is sub judice at thisstage, Dr Surve does not want to say too much.”

Ismail declined to share the court papers orreveal further details.

At court, amaBhungane was able to identify a 2015case in which Oakbay Investments is suing “Firer, S”and three others, but the file could not be found.

Steven Firer, an accountant with audit firm Nkonki,confirmed that it was him but said that he “cannotgive details until the court issues are dealt with”.

Several sources agreed that the other defendantsincluded Surve and a Sekunjalo group company.

“Expert witness and consultant”

Firer’s LinkedIn profile describes him as an “expert witness and consultant in commercialdisputes, particularly those involving issues ofapplication of International Financial ReportingStandards and International Standards on Auditing,valuations and financial analysis”.

It is understood that he played a role in theOakbay-Sekunjalo arbitration, helping to assess whatthe Guptas should pay for their would-be stake.

It is understood that Oakbay is now suing Firerbecause it argues his valuation was much too high.

AmaBhungane’s sources said that, as a majorshareholder, the Public Investment Corporation thismonth told those involved that it did not favour theGuptas’ attempts to grab part of Independent. Itsspokesperson Sekgoela Sekgoela declined to comment.

In 2013, Surve told Bloomberg that theinvestment corporation said it “won’t allow” theGuptas a stake in Independent.

Ismail said: “Dr Surve also wishes to make itclear that Oakbay and the Gupta family providedno assistance [financial or otherwise] whatsoever inthe acquisition of Independent Media.

“Dr Surve does wish to point out that OakbayInvestments was also a bidder for the IndependentMedia when it was up for sale in 2012/2013and that such bid by Oakbay was unsuccessful.

“Dr Surve also wishes to point out that theSekunjalo Group has no other business dealingswith Oakbay or the Gupta family.”

Oakbay spokesperson Yolanda Zondo said: “Weare not able to comment on this matter as doing sowould be in breach of a confidentiality agreement.”

The amaBhungane Centre for Investigative Journalism produced this story. Like it? Be an amaB supporter and help us do more. Know more? Send us
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Before joining the amaBhungane team in 2017, Micah was the national coordinator for media freedom and diversity at the Right2Know Campaign. He holds a Masters in African Studies from Oxford University and a BA Honours in History from Wits University.

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