The SCA in a rectification letter has informed Sactwu and the Independent Media Consortium (IMC) that it has rectified its initial judgment where the SCA awarded an amount of R458 million to Sactwu plus interest from 2023 onwards. This has now been rectified to be R300 million effective March 2026.
From a legal perspective this is an important rectification as the in duplum rule has guided the courts and it is not possible for any legal entity to charge more than the capital amount in interest.
Background to the judgment
Sactwu had loaned a Special Purpose Vehicle (SPV) R150 million in 2013. Sactwu took the SPV (IMC) to the High Court (HC) in the Western Cape in 2023. Judge O’Sullivan In the High Court of Western Cape ruled in favour of the Independent Media Consortium on the basis that the Sactwu loan was subordinated and that Andre Kriel, the Secretary General of Sactwu had full authority to enter into the subordination agreement. Sactwu then took the judgement on appeal at the SCA to overcome the subordination and authority ruling. The SCA ruled in Sactwu’s favour and surprisingly disregarded the in duplum rule and made the judgement that added to the R150 million would be the arrears interest, taking the amount to R458 million plus interest from 2023 onwards. The SCA has now rectified this error and confirmed that the in duplum rule applies as in all similar cases and the IMC consortium amount owing to Sactwu is capped at R300 million.
IMC is not Independent Media or Sekunjalo
The court record shows that IMC (previously named SIM) was an SPV set up to hold the shares in Independent Media for a consortium which involved Sekunjalo and about 12 broad-based empowerment groupings. Sactwu had approached the consortium to become a shareholder and had initially agreed to invest R200 million for 10% of the SPV. This was subsequently changed to Sactwu receiving 8% of the SPV and now loaning the consortium a R150 million. Sactwu’s reasoning was at the time that the union had lost R400 million with the fraud involving Trilinear Capital where prominent politicians were implicated in the theft of the funds. ENS the law firm was instructed by Sactwu to change the terms and has now been reported to the Legal Practice Counsel (LPC) as it acted for both Sactwu and the SIM / IMC Consortium.
Comment from Lucien Jacobs, the Sekunjalo CEO
Lucien Jacobs, CEO of Sekunjalo says that the media deliberately conflates or misrepresents the issues in relation to Sactwu and IMC.
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Firstly, IMC / SIM has nothing to do with Sekunjalo. It is an SPV which effectively has no assets, and it was set up to acquire shares in Independent Media from the Irish. Sactwu has wasted the funds of its union members and has enriched the law firm, ENS with no prospects of recovery of a single cent of this investment. In any case, Sactwu should demand that ENS should repay them the money.
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Secondly, Mr Jacobs emphasised that the R150 million that went to the consortium was paid to the PIC. It is disgraceful that elements in the media keep on trying to make it seem that those funds went to Sekunjalo when in fact all of it went to the PIC and on ENS’s instruction from Sactwu to advisors at the time. “It is regrettable that workers’ money has effectively been wasted on litigation against a vehicle created solely for the acquisition transaction “ Jacobs said.
Sekunjalo claim against Sactwu for R618 million
Jacobs has said that Sekunjalo has instituted summons in the Western Cape High Court against Sactwu for an amount of R250 million plus interest which has come to about R620. Million. The background to this is that Sactwu wanted to be part of the consortium as they wanted to publish a union newspaper and had committed to funding the R250 million for this purpose.
Sactwu did not fulfil their commitment, yet Sekunjalo funded the union newspaper and has not been able to recover these funds from Sactwu. Sekunjalo has now issued the summons against Sactwu and again it is regrettable because the union and its workers are going to have to repay Sekunjalo the R620 million or if the in duplum rule applies at the very least R500 million.
Sactwu has opposed the summons saying that the claim from Sekunjalo has been prescribed as it should have been instituted much earlier. Jacobs has indicated that Sactwu should stop enriching ENS and in fact should be thankful to Sekunjalo as they have received benefits of more than R1,7 billion from Sekunjalo including shares and dividends of more than R1 billion. Furthermore, he advises Sactwu to recover the funds it lost in Trilinear plus interest from all the people responsible as well as ask workers to investigate how senior executives at Sactwu have enriched themselves at HCI at the cost of the workers. Sekunjalo will ventilate all the above in its case against Sactwu and ENS so that once and for all the record can be set straight.
Independent Media implications
Jacobs said that “First of all, the media must stop conflating IOL and Independent Media. IOL & Independent Media went their separate ways in 2014 and only has a working relationship”. Independent Media and its subsidiaries have nothing to do with this Sactwu matter. However, Jacobs has said that Independent Media in particular its subsidiaries are appreciative that Sekunjalo have funded the business over the last 7 – 8 years with more than R1.4 billion and remains the only secured creditor of the business.
Sekunjalo through its subsidiaries will not hesitate to defend its rights and if anybody wants to challenge Sekunjalo they must repay Sekunjalo the R1.4 billion plus interest which they have invested to keep people employed, in particular journalists for media freedom and to ensure that the country has a different narrative to the Afrikaans apartheid era, Media24 and other pro-establishment media outlets. He has said that Independent Media is not only the largest print media house in the country reaching almost 10 million people that reads its newspapers, but it is the only one that tells the stories of black people in South Africa today in a manner which recognises the complexity of the country.
