SABC continues legal fight to nullify New Age ‘business breakfast’ deals

Who is involved

Four former directors of TNA Media Nazeem Howa, Varun Gupta, Atul Kumar Gupta and Gary Naidoo have been joined in the SABC’s review application seeking to set aside the business breakfast deal. TNA Media is now in liquidation.

Background of the dispute

TNA Media once owned The New Age newspaper, while Infinity Media owned the 24-hour TV news channel ANN7. Both assets were sold to Lodidox, a company owned by Mzwanele Manyi, in August 2017. The SABC says it moved against TNA Media after informing the company that it was terminating the contract in June 2017, a termination the Gupta-linked firm accepted.

After the termination, TNA Media demanded R144 million in damages and referred the matter to arbitration in terms of the contract. The SABC launched an urgent application to interdict and stop the arbitration while it pursues its bid to have the agreement declared void ab initio (from the beginning).

High Court ruling and service of papers

On Tuesday, Gauteng High Court judge Motsamai Makume ruled in favour of the SABC’s bid to join the former TNA directors in the review application and addressed how the directors could be served with court papers.

The SABC had sought permission to serve papers through an English newspaper circulating nationally, electronic platforms such as WhatsApp, Facebook and Instagram, or by edictal citation to reach persons outside South Africa.

Directors’ position and the court’s view

The TNA directors denied having a direct and substantial interest in the review, argued the court had no jurisdiction over Varun and Atul Gupta, and challenged prescription and cause of action. In their opposing affidavit, Naidoo said the SABC’s cause of action, if any, arose in June 2018 and thus prescribed in June 2021.

Judge Makume found that the directors had agreed that all processes could be served on their South African attorneys and had thereby submitted to the court’s jurisdiction. The judge noted that a judgment against a person who has submitted to the court’s jurisdiction will be internationally enforceable and recognised by the debtor’s place of domicile.

“The court further held that a judgment given by a court against a peregrinus (person not residing or domiciled within the court’s jurisdiction) who has submitted to its jurisdiction will be internationally enforceable and will be recognised by the court of the judgment debtor’s domicile (place/country of residence),”

Judge Makume also rejected the contention that the claim against the directors had become prescribed.

Liability and abandoned claims

The SABC had asked the court to declare that TNA Media should not be treated as a juristic person but rather as the personal venture of its directors under the Companies Act, and sought a declaration making the directors jointly and severally liable to repay any money ordered to be returned to the broadcaster.

The SABC later abandoned its attempt to have the directors declared personally liable in the event its review application succeeds.

Allegations and investigations

Judge Makume said the TNA directors sought to ignore findings from the State Capture Commission and the Special Investigating Unit, which the judge said indicate the directors were complicit in misconduct in the negotiations and conclusion of agreements between TNA Media and the SABC.

“The judge added that it can never be correct that the claim against the directors has become prescribed.”

The legal battle over the business breakfasts broadcasts that aired on the public broadcaster therefore continues as the SABC pursues the nullity review and related procedural questions in the Gauteng High Court.