A wealthy Indian family in South Africa, accused of having improper business links with President Jacob Zuma, is selling off their huge print and television media interests amid growing concerns about the job security of thousands of staff members at its companies.
Oakbay, owned by the Gupta family, announced that it had reached agreement with Lodidox for the sale of its shareholdings in its two media businesses, Infinity Media and TNA, for a combined consideration of R450 million.
Lodidox is headed by former South African government spokesperson Mzwanele Manyi, who said he was looking forward to the deal being concluded, pending regulatory approval.
"These are two strong businesses which are full of potential and, under the right external circumstances, can become an increasingly important and relevant part of the South African media landscape," Manyi said.
The transaction includes the Oakbay's shareholding in Infinity Media, which operates the ANN News Channel, for R300 million; and the sale of Oakbay s two-thirds stake in TNA Media, the publisher of The New Age newspaper, for R150 million.
"The sale is part of Oakbay s commitment to preserve jobs and provide certainty to over 7,500 hard-working employees throughout the group and to safeguard the inherent value of the businesses in which they work," Oakbay said in a statement.
"Under a new majority shareholder, Oakbay believes that both businesses and their employees will have the bright and prosperous future they deserve. The sale will also allow the shareholder the time to focus on clearing its name in the face of unfounded media allegations," the statement added.
All major South African banks have refused to do business with the Gupta's Oakbay Investments, with concerns over continued payments to staff, as the Bank of Baroda has also served notice that it will not deal with the company from the end of August.
The three Gupta brothers, originally from Saharanpur in India, built a huge business empire in fields as diverse as agriculture, mining, information technology and media since arriving here more than two decades ago, but have been accused of negotiating lucrative preferential deals through their association with Zuma and other government officials and institutions.
The Guptas have denied these allegations.
Both the TV channel ANN7, which is carried across Africa on the DSTV subscription platform; and The New Age daily were started with support from partners in India who brought in new technologies and efficiencies of scale to run the products successfully in a very competitive environment.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)