Guptas could avoid tax if they prove loss in ANN7, New Age sale

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Johannesburg, 22 August 2017 - The former government spokesman will acquire The New Age and ANN 7. He bought the assets from the Gupta family for R450-million.

Johannesburg, 22 August 2017 - The former government spokesman will acquire The New Age and ANN 7. He bought the assets from the Gupta family for R450-million.

WEB_PHOTO_JIMMY_FUNDING_PKG_22PM

Johannesburg, 22 August 2017 - The former government spokesman will acquire The New Age and ANN 7. He bought the assets from the Gupta family for R450-million.

Johannesburg, 22 August 2017 - The former government spokesman will acquire The New Age and ANN 7. He bought the assets from the Gupta family for R450-million.

JOHANNESBURG – Mzwanele Manyi is making the headlines after buying two news organisations.

He bought the assets from the Gupta family - paying nearly half-a-billion rand.

Manyi is buying Infinity Media - the firm which controls The New Age newspaper, and 24-hour news channel, ANN7.

The deal is based on vendor financing.

In other words, the Guptas will lend Manyi R450-million so he can buy their business.

 

 

It’s reported auditors conducted a valuation of Infinity Media in 2015.

READ: Eyebrows raised by 'sweetheart' sale of Gupta media

eNCA has tried to confirm this valuation was in fact conducted but the audit firm has not responded.

But both figures are a fraction of the amount Manyi paid.

“It's a viable business. In fact, as we speak right now, it's operating very low below where it should be operating - which is an opportunity. And I'm going to take this business from where it is, to the sky," Manyi said.

 

 

One analyst says the Guptas could avoid tax if their financial statements point to a loss.

WATCH: I'll show you the money, says Manyi to Justice

“The unusual issue is the selling price. The business case for this transaction has to be looked at very carefully. Because it requires a substantial increase in revenue, associated with these organisations - as opposed to an additional financier. What they really need is a way to increase the profits of this organisation. And I don't see how that can be done in a conventional way,” said Wits School of Governance Professor Alex van den Heever.

Manyi is hoping to secure advertising revenue from government.

 

 

He also says the company is not simply about news. He says it'll provide a communications service.