Gupta sale a toxic deal with Manyi
It is highly unusual for a seller to also provide the new buyer with money to keep operations running.
Mzwanele Manyi. Picture: Gallo Images
Ordinarily, we would welcome another entrant into the media business, not only because competition helps keep us, as a news organisation, on our toes but also because our country needs diverse voices.
But the news that the Gupta family is trying to divest itself of its publicity arms – The New Age newspaper and ANN7 television channel – is worrying.
We do not dispute that businessperson Mzwanele Manyi has the right to engage in any business he wants. Nor do we think the Guptas should be prevented from selling their businesses to him, given that he has been one of their faithful supporters for a long time.
What does concern us is the reality that this so-called deal has shaky real-world business foundations.
Although it is not unusual for a company owner to sell a company by way of a vendor sale – where the buyer pays back the purchase price in instalments – it is highly unusual for a seller to also provide the new buyer with money to keep operations running.
This is what Manyi acknowledged is the case with this deal. And he will require a lot of money because both outlets attract little paid advertising, other than from Gupta supporters controlling some government advertising budgets.
It is therefore difficult to escape the inference that the purchase is little more than a fronting operation. It appears that Manyi’s company will now be a conduit for Gupta money inflows – allowing the family to circumvent the fact they have been abandoned by banks, which are worried about the reputational damage they will incur in dealing with them.
But more worrying than the questionable financial aspects of the deal is that, under Manyi, a staunch proponent of the white monopoly capital narrative, we can expect the same toxic propaganda to continue.