Should the hard-earned money of pensioners, teachers, police officers and other government employees remain locked in shares at MultiChoice?
Why should public pension funds, particularly those managed by the Government Employees Pension Fund (GEPF) through the Public Investment Corporation (PIC), be concerned about the ownership of MultiChoice?
After all, the main concern for such funds is earning dividends for their members.
With French media company Canal+ making hostile moves to buy controlling shares in MultiChoice, all eyes are on institutional shareholders, including the PIC, who are holding out for a better offer.
Do fund members care about the possible hostile takeover?
To find out, I turned to my pensioner father whose retirement funds are under the management of the GEPF via the PIC.
“Papa, are you content with seeing your pension funds invested in MultiChoice?” I asked. “What is MultiChoice?” my father responded with curiosity.
“It is the parent company of DStv, the pay-TV operator, and the PIC holds a 12.25% stake in the company on behalf of pensioners like yourself,” I explained.
Somewhat enlightened, my father said: “Indeed, Gugu, I support investing my pension funds in DStv because I watch their programmes daily, although I also wish some of my money could support the SABC, which I occasionally tune in to.”
I told him that MultiChoice might end up being owned by a French media conglomerate.
Who among African nations would willingly cede their narratives to the French? Can they trust them to represent their stories authentically?
“Why should I be concerned?” he asked. “If our investments remain intact, the French investment will contribute to our financial growth.”
I explained that there was no assurance that MultiChoice, under French ownership, would continue to be listed on the JSE, potentially affecting the growth of his investment.
This discussion led me to ponder whether the PIC, as South Africa’s largest fund manager, was still committed to pursuing social objectives through shareholder activism. Shareholder activism involves leveraging one’s position as a significant shareholder to advocate for desired changes within a company.
MultiChoice, the owner of DStv and Showmax, occupies a pivotal role in shaping South Africa’s and the continent’s cultural narrative.
Thirty years after apartheid, platforms like MultiChoice play a vital role in asserting a nation’s identity and global presence. While Hollywood defines the US and Bollywood characterises India, MultiChoice and its subsidiaries serve as the storytellers of Africa.
However, if MultiChoice falls under French control, South Africa and other African nations risk losing their voice in storytelling.
Meanwhile, the French media giant raised its stake in MultiChoice to 35.01%, triggering a mandatory offer to shareholders. The move points to Canal+’s potential hostile bid for MultiChoice, which prompts several questions.
Who among African nations would willingly cede their narratives to the French? Can they trust them to represent their stories authentically? Moreover, is the PIC holding invested companies accountable?
Inquiries directed at the PIC regarding this bid yielded evasive responses from spokesperson Adrian Lackay, suggesting a departure from the shareholder activism stance the PIC once embodied.
I wanted to know what stance the PIC was taking regarding the possible mandatory offer by Canal+ to minority shareholders of MultiChoice? Was the PIC inclined to divest its ownership in MultiChoice? And did the MultiChoice board explain its reasoning to the PIC of establishing a management office in Dubai?
Lackay would only say: “The board and management of MultiChoice are responsible for the direction and operations of the company and not shareholders, of which PIC is one. The PIC will assess closing offers if they are presented.”
The PIC, once a vocal shareholder, now appears hesitant to assert its influence, perhaps a consequence of past misuse of its considerable financial clout during the era of state capture.
Instances of blind investments and alleged exploitation by well-connected entities have tarnished the PIC’s reputation. The PIC of the past — before state capture — was more vociferous. But we all know how the most powerful pension fund in Africa lost its R2.6-trillion firepower. It is common knowledge that the PIC used this considerable ammunition to dispense political patronage during state capture years, which ravaged South Africa.
Now, the pension fund manager is timid and nervous. The PIC simply won’t flex its muscles.
Perhaps this is because in the past the PIC lost money to well-connected institutions such as Erin Energy, Iqbal Surve’s Ayo Technologies and retailer Steinhoff. The institution was also allegedly hijacked by nefarious interest groups.
Consequently, expecting the PIC to hold MultiChoice’s board accountable for decisions such as establishing a management office in Dubai seems overly optimistic. Under Abel Sithole’s leadership, the PIC gives the impression it wants to distance itself from political interference.
However, its passive stance on issues like accounting fraud, executive pay and transformation raise concerns about its commitment to shareholder activism. The PIC, as a significant institutional investor, should advocate for MultiChoice to explore its potential in Africa fully.
Instead of conceding ground, now is the time to amplify its voice in safeguarding the interests of pensioners and promoting local narratives on a global stage.
• Lourie is founder and editor of Tech Financials
