The tale of Nail

Tom Rymore's new column, "Digitus Impudicus", focuses on New Africa Investments Limited.

Gather around one and all, I am about to tell the Tale of Nail - a page-turner driven by politics, plot, character and all seven deadly sins.

New Africa Investments Ltd was founded in the early Nineties by Dr Nthato Motlana, with 16 per cent of Metropolitan Life, unloaded by an altruistic Sankorp in the cause of 'empawamenti'. The hammer behind Nail was token mlungu Jonty Sandler, who had earlier cost his bankers a bundle at Nasrec, and later had an allegedly sado-pederastic encounter with a security guard in a Himeville hotel room. The incident is still clouded by innuendo and rumour, since somehow it didn't come to court and now we'll never know if he was framed.

Jonty assembled a dementedly diverse grab-bag of assets, using 'N' shares. These have one five-hundredth the voting power of ordinary shares and sell at a discount. The 'second-class' share was a JSE idea to boost broad empowerment, but it had a narrowing effect; two per cent of the shareholders outvote the rest. Control is firmly in black hands - very few of them.

Cash from discounted N shares with minuscule voting power bought up more chunks of Metlife, where good results sustained the Nail share price; the holding grew from 16 to 51 per cent. Meanwhile, management was playing sillibuggers on the JSE, shuffling scrip faster than a Sun City dealer. Johnnic was picked up and dropped; Comrade Cyril Ramaphosa came, and sensibly departed. Nail was generating column inches, not dividends.

On the board of parent company Phaphama Holdings were Cde Dikgang Moseneke and former SABC supremo Cde Zwelake Sisulu - who shrugged off allegations that he had favoured the TV production company Urban Brew, a Nail subsidiary. But when Motlana and Sandler quietly planned to split R3.7 million in stock options from African Merchant Bank, shareholders kicked up an unholy stink. As Moseneke and Sisulu grovelled, Motlana and Sandler were forced to sell out; Hollard Holdings warehoused their shares in two trusts.

With Jonty under a stone on a poultry farm, living down his reputation as the Hammer of Himeville, there were moves to rationalise the holdings. Last year Metlife and a 60 per cent interest in Hertz were finally fissioned off as New Africa Capital, leaving the rump of Nail with a media bias. A couple of creative moves at Hollard saw the female empowerment group Wiphold buy Moseneke's quarter of Phaphama for R17 million. Sisulu wanted to sell out to Worldwide African Investments, but Safika, which already owned 9,9 per cent, got in first, having paid way over the top, R24 million, for a 34,9 per cent stake in Phaphama. This gave Safika control over Nail's R4 billion in assets, despite owning less than one per cent of the shares.

Safika's appointee at the helm was Cde Sakumzi Macozoma, a former ANC MP who sits on many boards. He once said: "I was shaped in the struggle to create a just and democratic society. It is my life's work to achieve this." Another quote: "The notion that every time a Black businessman buys a Mercedes-Benz someone has gone hungry is ridiculous and racist". And again: "Business is about enrichment". As MD of Transnet he appointed Cde Coleman Andrews, a used Boeing dealer with an excellent grasp of enrichment.

Safika was started in 1995 by Cde Moses Ngoasheng, an ex-advisor to Cde Thabo, and Cde Vulindlela Cuba (no relation to Cde Shilowa's preferred socialist smoke). The fledgling enterprise, which once had hopes of running slot machines in shebeens, was in the red until it fell heir, as an ex-combatant company, to a parcel of MTN shares. These very shares were later to cause a protracted court squabble between Safika and Makana Trust. But after Judge Ezra Goldstein uttered the words "dishonestly and dishonourably," and ordered a probe into Safika, broedertwis ended out of court in renewed comradeship.

Cde Sakumzi continued to work for a just and democratic society. He wanted to buy Kagiso Media with its radio stations, but spoilsport Icasa ruled that Nail was not an empowerment company. Recently shares traded at a 40 per cent discount to net asset value, and The Financial Mail described Nail as less like a media giant than a cash shell - with an unused R600 million in the kitty.

What next? That's only the first volume; the ongoing unholy alliance between business and politics ensures that the sequel will be a sizzler.