Business relationships need to be built on more than a signed contract; they need to be entrenched in trust to flourish and be successful, along with a healthy dose of knowing what one is doing.
When a breakdown in any relationship occurs, then often the gloves come off and friendship and respect go out the window. This might well be the case with the SACTWU versus Independent Media Consortium (IMC), formerly the Sekunjalo Independent Media Consortium (SIM) battle currently playing out in court.
In 2013, Sekunjalo Investment Holdings (SIH) decided to buy the Independent Media publishing group from its then Irish owners who, having stripped it of much of its wealth already, were looking to offload it. Being a black empowerment organisation, SIH surrounded itself with like-minded partners, who believed in the power of the voice of the people and giving them a platform to be heard.
One of these partners, who looking to increase their existing footprint in the media space, was the Southern African Clothing and Textile Workers Union (SACTWU). Through its investment arm, handled by the general secretary André Kriel, the union decided to invest some R150m into Independent News Media South Africa, thus becoming part of the consortium, a special purpose vehicle created for the occasion and who made the successful bid for the company.
At the time of the investment in 2013, SACTWU also wished to invest a further R250m in a publication dedicated to all the workers of South Africa, entitled “The World at Work”. This was intended to shine a light on the issues that workers – the majority of South Africans - face on a daily basis, whether at home, play or in the workplace.
Perhaps the writing should have been on the wall for Independent Media and SIM/IMC, as in August 2013, at the time of finalising the purchase of the newspaper group, the union asked for its investment to be converted to a loan. This was followed by the union pulling its funding support of The World at Work, citing financial difficulties. SACTWU had suffered a failed investment in Trilinear where they lost R400m.
As Sekunjalo has noted in previous articles, it so believed in the publication project that, whilst waiting for the SACTWU funds to materialise, it had already put R100m of its own funds into the pot before being met with the news that SACTWU were not going to follow through on their commitment.
Further, the newspaper group devoted significant space and attention to generating awareness around the importance of buying local – garments that is. The Wear SA campaign stimulated awareness around the importance of the industry and the pitfalls of fast fashion.
Fast forward to 2023, SACTWU is suing IMC for R300m claiming the capital plus interest on its ‘loan’, and also saying it cannot afford to pay its bills.
What the court case will determine is the legitimacy of SACTWU’s claims and whether or not Kriel had the authority to sign a subordination agreement that the ‘loan’ would be paid back only when the media group’s assets exceed its liabilities, and then further swapped out the ‘loan’ for shares in Sagarmatha Technologies, which was concluded in 2017.
What the court may not rule on though, is SACTWU’s ability to manage its investments properly in the first place, and how its decisions have had a negative impact on its partners – such as IMC.