PRESIDENT Emmerson Mnangagwa’s son-in-law Gerald Mlotshwa — a prominent lawyer married to the ruling Zanu PF leader’s daughter Farai — has now formally bought a significant equity stake at the privately-owned multimedia house Alpha Media Holdings (AMH) owned by local publisher Trevor Ncube.
BRENNA MATENDERE
This comes amid a cocktail of operational challenges within the company after it emerged this week that management told representatives of workers during a works council meeting that it intends to retrench 30% of employees due to mounting recurrent losses weighing down the company, which has been technically insolvent for years due to a debt overhang and fast dwindling revenue inflows fuelled by economic problems and technological disruptions.
AMH, one of the biggest media groups in Zimbabwe, publishes the NewsDay, The Standard and the Zimbabwe Independent, as well as online broadcasting platform, Heart & Soul Radio/TV. In terms of scale, AMH ranks high up there with the listed state-controlled Zimpapers, the publicly-owned Zimbabwe Broadcasting Corporation, privately-run Associated Newspapers of Zimbabwe and AB Communications.
Mlotshwa, a renowned corporate and commercial lawyer, now owns 39% of AMH after the New York-based Media Development Investment Fund (MDIF) exited the group as a loan client where it had remained when Ncube was pushed out of South Africa’s leading investigative newspaper, Mail & Guardian, due to a failure of his ambitious digital expansion pro[1]gramme and a concomitant financial disaster.
AMH insiders say there were plans to also make company chief executive Kenias Ma[1]fukidze a shareholder as part of his generous package which cushions him against shocks of poor financial performance through question[1]able foreign currency payouts.
Contacted for comment, Mafukidze said he could not speak on the issue of shareholders as it is outside his remit. He, however, confirmed in the process that Mlotshwa had become a shareholder at AMH by referring to him as a “principal”.
“These are shareholder issues which (I) am not empowered to comment (on). May I humbly suggest you touch base with the principals, Gerald (Mlotshwa) and Trevor (Ncube),” he said.
Ncube did not respond to written questions by The NewsHawks sent to him via WhatsApp, but the message blue-ticked, showing that it went through and he had seen it. He also did not pick up direct calls or respond to follow-up messages on WhatsApp.
Repeated WhatsApp calls were also not picked by the AMH proprietor. But Mlotshwa indicated to The NewsHawks that he was now a shareholder after the MDIF sold its stake to him.
The MDIF is a New York-based not-for-profit investment fund for independent media in countries where the free Press is under threat from repressive regimes. It has more than 20 years’ experience of helping build quality news and information companies — print, digital and broadcast — in emerging markets.
It has invested more than US$163 million in 113 media companies in 39 countries on five continents; a current portfolio of more than US$60 million invested in over 50 media or[1]ganisations.
Zimbabwe was one of the countries it had invested in through Ncube and AMH. In South Africa, MDIF manages the South Africa Media Innovation Programme — a three year US$4m initiative to accelerate digital media innovation among independent media out[1]lets and encourage new entrants.
Mlotshwa is founder and senior partner of Titan Law, which has offices in Harare and Bul[1]awayo. It owns the Seychelles-domiciled corporate advisory company, Titan Legal Inc, which has a representative office in Mauritius.
He is heavily involved in sponsoring sport and recreational activities in Zimbabwe, including polo, rugby, cricket, golf and hockey at all levels from schools to national teams.
Besides, he is the founder of the Sables Trust, which looks after the financial requirements of the national men’s rugby team. Among other directorships and trusteeships, he is the current chairperson of the Sports and Recreation Commission charged with the regulation and promotion of all sport and recreation in Zimbabwe.
Together with his wife, they are invested in a number of private business interests spanning different economic sectors. Until the managed divorce in 2017, Ncube had worked with MDIF for 14 years.
MDIF first provided a loan to M&G in 2003 when Ncube purchased a controlling interest from the UK’s Guardian Media Group at a time when the company was in a perilous financial position. Further debt and equity investment helped stabilise the company, build its distribution network and develop its digital news site, before things went askew, leading to Ncube’s exit.
Ncube had initially fixed the then struggling M&G upon his arrival for a few years and it thrived, but then he embarked on a financially disastrous and unsustainable digital expansion programme, which included the M&G Africa project that left the company in dire straits.
Suicidally, he had also fought and acrimoniously parted ways with the M&G’s cutting-edge investigative arm, amaBhungane, which was the heart and soul of the reputable publication which he left as a shell when he moved back to Zimbabwe after about 15 years in South Africa.
At the time of his exit, Ncube admitted his failure: “I take full responsibility for the mistakes we have made,” he said.
“And I know too that we were not alone in making these mistakes. Around the world, media organisations everywhere are searching for the perfect solution for a commercially viable digital media publica[1]tion.”
Following Ncube’s exit, MDIF acquired a majority stake in the M&G, while chief execu[1]tive Hoosain Karjieker got minority equity. In a bid to clear AMH’s financial mess back home, Ncube frantically hunted for new investors to inject new money to recapitalise the company.
A number of investors were approached and they came to view the penniless books, but hur[1]riedly left spooked as the company was technically insolvent due to a huge MDIF debt of about US$2m.
That was at a time when fears mounted that creditors would apply for liquidation in the courts whenever they wanted to recover their money if push came to shove.
As a last resort, AMH applied to the Reserve Bank of Zimbabwe (RBZ) for a bailout to pay off its debt albatross through Real Time Gross Settlement quasi-currency on a 1:1 exchange rate, which effectively meant a government subsidy as the company would have to pay next-to-nothing to liquidate the debt.
That facility applied to local companies which had foreign debts contracted after 2015, but AMH did not qualify as its liabilities had accumulated before that. As a result, the RBZ initially rejected AMH’s application for debt reprieve as it did not fall within the prescribed timeframe for eligibility — that is liabilities contracted before 2015 — but the monetary authorities became le[1]nient and decided to help out.
Eventually they accepted the application and helped to pay off US$300 000 in debt on a 1:1 exchange rate, which is practically a subsidy. This provided debt relief. As part of the M&G transaction, the MDIF had to let go its equity stake in AMH to Ncube.
However, MDIF had remained in AMH as a loan client until Mlotshwa’s arrival in 2019. Initially, Mlotshwa put some money and sponsored Ncube’s talk show In Conversation With Trevor — which is supposed to be a series of candid and insightful engagements, but has now degenerated into a self-serving and projection ego trip.
The interviews are now only distinguished for avoiding taking on Mnangagwa or asking him serious questions and other important issues about the corrupt and incompetent exec[1]utive. His newspapers also sometimes do the same.
This was the editorial approach of the Financial Gazette during the late former president Rob[1]ert Mugabe’s twilight years. After Mlotshwa’s Titan Law pulled out, Ncube’s podcasts became funded by funeral services company Nyaradzo Group.
With Mlotshwa now formally involved as a shareholder, it would be even more difficult for AMH to criticise Mnangagwa or expose his shortcomings — meaning it would be hard to break the chains of media capture.
The private media in Zimbabwe is now largely captured by Mnangagwa’s cronies or Zanu PF agents. Media capture is a form of Press control through a series of premeditated steps taken by governments and powerful interest groups, which undermines the ability of journalism to serve the public good.
These include taking over regulatory control, state-owned media operations, public advertis[1]ing/marketing, and politically linked ownership of private media.
These manoeuvres have left the independent media more vulnerable to being undermined by both powerful external actors and decision-making structures or individuals within media organisations. Before Ncube quit over a year ago in exasperation after jumping onto the 2017 military coup gravy train with intolerant exuberance, he could not criticise Mnangagwa as he was one of his Presidential Advisory Council members, which has now all but collapsed.
Ncube only attacked Mnangagwa and the coup-plotters he initially cheered in March when he made public his resignation during his sour grapes address at the BizNews Conference in the Drakensberg, South Africa.
“I was approached and agreed to serve in the Presidential Advisory Council. I have sat at close range to the President and advised him on a number of issues but have since stepped down. I could see it was not going to end well. We thought Robert Mugabe was bad,” Ncube said.
“Sadly, President Mnangagwa has shown an amazing [aptitude] to do things much worse than Robert Mugabe ever did. The most frightening [is that he has mutilated] our constitution and captured our judiciary.
“The people that launched the coup in Zimbabwe were interested in protecting their small personal interests, ethnic interests, business interests and economic interests,” he said. Ironically, Ncube had also supported the coup and joined Mnangagwa’s team mainly for economic interests.
He wanted to leverage his media group to exert influence in government — Rupert Murdoch-style — to ensure proximity to power, get radio and television licences and revive his floundering financial fortunes.
Media development expert Rashweat Mukundu, who has vast experience in the industry, told The NewsHawks changes of ownership in media organisations is normal, but hoped the new shareholding structure will not affect AMH editorial policy.
“The expectation is that Trevor Ncube will maintain his very independent approach to the generation of news content that enables public discourse regardless of those that are in power,” he said. “
Another concern is that we are slowly seeing a consolidation of media ownership within the same power circles, judging from what we hear has happened to other private newspapers and media entities which we understand are now under the ownership of the same circle of friends.
“So, the crisis that Zimbabwe may face is that we might end up having independent media in name, but not in reality. We may have independent media that does not demonstrate its independence in terms of editorial content; of course it’s too early to make that judgement on Alpha Media. We hope Alpha Media remains as critical, as open as it has been regard[1]less of these changes.”
Mlotshwa promised not to interfere with the editorial policy, saying his was a business not a political move. However, analysts say it would be difficult for him to be a bystander as a major shareholder when his father-in-law is under attack.
