New twist in VBS saga: Mzwanele Manyi’s newspaper banked with the lender
Freezing of all TNA Media’s accounts by the bank has ‘severely affected’ the business
The VBS Mutual Bank saga took another twist on Monday when it emerged that the newspaper business of staunch Jacob Zuma supporter Mzwanele Manyi, which he bought from the Gupta family, banked with the lender that failed due to alleged fraud by its directors.
In court papers asking for TNA Media to be urgently placed under provisional liquidation, Manyi said the company’s operational bank accounts were held with VBS, which was placed under curatorship in March, and the freezing of all its operation’s accounts by the bank had "severely affected" the business.
The liquidation only referred to the newspaper, the former The New Age, most recently known as AfroVoice. The last edition was printed on June 29.
Manyi’s AfroTone Media Holdings also owns the 24-hour news channel Afro Worldview (formerly ANN7), which is held under Infinity Media and is not affected. However, Afro Worldview’s contract with MultiChoice, which allows it to be carried on DStv, expires in August 2018.
AfroTone has made a bid for a new 24-hour, black-owned news channel.
The urgent provisional liquidation of TNA was brought by AfroTone Media and its directors. Manyi acquired the Guptas’ media interests late in 2017.
The Gupta-owned Oakbay Investments sold its shareholding in Infinity Media and TNA to Manyi’s Lodidox and management for R450m.
Oakbay vendor-financed the deals, essentially lending Manyi the money.
The Gupta-owned news channel and newspaper were pro-Zuma and his administration and relied heavily on government advertising.
Zuma, along with his son Duduzane Zuma, has been closely linked to the Guptas and allegations of state capture.
The previously obscure VBS came into prominence in 2016 when it lent Zuma R7.8m to pay back state funds used to upgrade his Nkandla home. Questions were raised at the time over how he obtained this loan in the face of the bank’s credit-granting criteria.
Last week, the Reserve Bank said as much as 75% of VBS’s assets may have been stolen by its executives and directors, placing depositors at risk.
By the end of January, the bank held total assets of R2bn, according to data provided by VBS to the Bank.
In his affidavit to the court, Manyi said he had written to VBS curator Anoosh Rooplal in March asking for the immediate restoration or reinstatement of TNA Media’s transactional services. In the letter, Manyi warned that the freezing of accounts would result in, among others, the inability to broadcast or publish.
In the affidavit Manyi said that from February 2018, when Zuma was replaced by Cyril Ramaphosa, to June 2018, TNA Media’s revenue declined from R5,173,646 to R255,650.
This was primarily due to the Free State and North West provincial governments cancelling their bulk subscription transactions, and a protracted legal battle with the South African Broadcasting Corporation (SABC) over the TNA business briefings.
He also cited the fact that Gupta-linked Westdawn Investments did not renew its annual advertising commitment of about R1.7m a month.
The annual sponsorship commitment with Westdawn came to an end due to the legal dispute with the SABC.
An annual sponsorship commitment with Koornfontein Mines, another Gupta-linked company, also came to an end.
Manyi said the company was in a "dire financial position" and conducted its business in "insolvent circumstances".
As a result, "the directors have a legal duty to cease all operations and further to act in the best interest of all stakeholders, including the body of creditors, its employees and shareholder", the affidavit said.