KAGISO MEDIA BBBEE
Kagiso Media is rated as a level two BBBEE company by the National Empowerment Rating agency. This is in line with the continuing tradition of empowerment within Kagiso Trust Investments.
THE KAGISO EMPOWERMENT MODEL
The Kagiso Trust owns 51% of the shares in KTI, Industrial Partnership Investment Limited (“Remgro”) owns 37,7% and the staff share trust holds 11,3%. Kagiso Media has consistently returned a substantial proportion of its profits to its shareholders through the payment of dividends. Of the total dividends paid out since listing, almost R367m has been paid to KTI. This cash, together with dividends from other KTI investee companies, is used to fund the trust’s development programmes and further growth in KTI’s investment activities.
In contrast to many existing empowerment funding models, the activities of the Kagiso Trust do not benefit only a small number of individuals, but the community at large. This model aims to assist in the reconstruction and development of the country and to overcome the legacy of apartheid.
THE KAGISO TRUST
Kagiso Trust is one of South Africa’s most respected, leading-edge, non-government developmental finance organisations. It is nonpartisan in character and promotes non-racialism and reconstruction and development in South Africa. Kagiso Trust seeks to improve the quality of life of poor and marginalised people. It regards development as an integral part of transformation and social change, especially in the context of the historic deprivation and poverty which is faced by millions of South Africans.
HISTORY
Kagiso Trust was established in 1985 with the backing of the European Union’s Special Programme for the Support of Victims of Apartheid. It grew from a small unit managed by two people to a national operation of nearly 100 people by the early 1990s, while its annual budget grew from R15m to R250m over this period. During this time Kagiso Trust accountably and transparently managed more than 700 funding contracts in various European community prioritised development sectors. In addition, it managed a bursary fund which supported more than 20 000 students at universities, technikons and teacher-training institutions.
The trust is governed by a board of trustees that serves as custodian of the policies and direction of the trust. The current trustees are Ms Bongi Njobe, Ms Nthobakae Angel (chairperson), Rev Mazwi Tisani, Dean Zwo Nevhutalu, Prof Wiseman Nkhuhlu, Mr Hylton
Appelbaum, Ms Madumezulu Girlie Njoni, Mr Mankone Ntsaba and Mr Thabiso Ratsomo – all of whom have strong community links and a personal commitment to social upliftment.
The trust is also supported by a number of patrons that include Archbishop Desmond Tutu, Rev Dr Frank Chikane, Fr Smangaliso Mkhatshwa, Dr Abe Nkomo, Prof Jakes Gerwel, Dr Goolam Aboobaker, Ms Zanele Mbeki and Dr Max Coleman.
DEVELOPMENT OBJECTIVES
Over the last two decades of its existence, the trust’s development objectives have adapted to the changing circumstances. Currently these are to:
- Promote and facilitate innovative and alternative development models;
- Build integrated development programmes at a grassroots level that can be sustained and replicated;
- Help create and maintain a vibrant non-governmental sector, working constructively with government and the private sector;
- Provide those disadvantaged by apartheid with access to skills and resources;
- Articulate the needs of the poor and marginalised;
- Contribute to the planning and successful implementation of national development objectives; and
- Fight poverty through education.
FUNDING OF THE TRUST
From 1985 to 1994 the trust had a readily accessible source of donor funding, predominantly from the European Union. After the normalisation of the political environment in 1994, these
sources became increasingly difficult to access as this funding was being channelled directly through the democratic government of South Africa.
In order to secure a sustainable source of funding and to leverage existing investments, the Kagiso Trust formed KTI as an investment arm, which it capitalised with the modest reserves it had built up at the time and with a US$5m loan from JP Morgan. KTI used these funds to acquire the radio and publishing assets which gave rise to Kagiso Media. KTI has since diversified its investment portfolio with the aim of becoming South Africa’s pre-eminent empowerment investment banking services and media group.
Currently it is involved in a diverse range of industrial and financial activities. In addition to its 51,1% investment in Kagiso Media, it currently has interests in corporate finance, advisory and other financial services, securities trading, foreign exchange and derivatives trading, property investments and facilities management, fleet management services, a private equity fund, asset management, mining, banking, insurance and treasury services.
INVESTMENT PHILOSOPHY
The trust and KTI observe the philosophy not to invest in any asset or industry that is harmful to man or nature, such as the armaments industry, gambling, tobacco or alcohol. The investment philosophy of the Kagiso group is simple: to invest in those assets that it can grow through its own interventions by playing an active role in the management and control of these companies. It also seeks to transfer skills and economic means to previously disadvantaged individuals through these investments and to build businesses that can perform in a sustainable manner.
MAJOR ACTIVITIES
In the year under review the trust’s disbursements to identified projects totalled R23m.
The trust continues to focus its attention on education, especially in rural areas where schools are plagued by poverty and a shortage of facilities and resources. The focus of the trust is on two specific and customised programmes, namely:
The Beyers Naudé Schools Development Programme (“BNSDP”)
The BNSDP is specifically targeted at rural schools with the aim of developing vibrant, healthy, accountable and sustainable school communities.
The objectives of the programme include building leadership capacity and value-adding relationships, as well as instituting training interventions.
Currently there are over 40 secondary schools forming part of BNSDP which are located in remote rural areas in Limpopo, Free State, Mpumalanga and Eastern Cape. In the period under review, the BNSDP was extended into KwaZulu-Natal for the first time, benefitting ten schools in the Mzinyati area. In addition, the programme was also rolled out into ten additional schools in the Sekhukhune district of Limpopo.
In association with government, poorly performing schools are identified and assistance is provided by BNSDP to address issues facing the schools over a four to five-year period. These include infrastructure upgrading, development of training programmes, curriculum and class management, development of leadership skills and sport and cultural activity programmes.
Over 21 000 learners currently benefit from the programme while more than 1 400 educators are employed in BNSDP schools. All the beneficiaries are black rural youth, the majority of whom are women.
The Eric Molobi Scholarship Programme (“EMSP”)
EMSP was initiated in 2007 as a tribute to the passing of our late chairman Eric Molobi. Mr Molobi had always believed that education was a springboard for disadvantaged youth to enter the economic mainstream. Learners who show an aptitude for science and maths and who meet additional stringent criteria are selected from within the BNSDP. They are encouraged to study in the field of engineering and funding is provided for the duration of their studies. The
funding covers tuition fees, books and educational equipment, accommodation, transport and personal expenses.
There are currently 26 students in the programme, all of whom are black rural youth. Eight of the students are in their third year of study, seven in their second year, and 11 are in first year.
In addition to the funding, the programme aims to develop such graduates into tomorrow’s business and science leaders by providing them with academic, social and professional support.
SUMMARY
Kagiso Media is proud of its empowerment pedigree. The Kagiso Trust, through KTI, represents a credible, broad-based empowerment shareholding structure that is built on trust and integrity. It is both equitable and sustainable.
TRANSFORMATION
Aligned to the Kagiso Trust’s transformation and development objectives, Kagiso Media and its subsidiaries are committed to advancing the various aspects of black economic empowerment.
Kagiso Media uses the Broad-based Black Empowerment (“BBBEE”) Codes of Good Practice issued by the department of trade and industry to measure its transformation progress. Kagiso Media continues to make good progress in meeting its objective of being an exemplary corporate citizen in this regard. Kagiso Media’s current BBBEE rating is level two.
