The unravelling of publisher Media Nova, which went into liquidation in April, has impacted on more than staff members left high and dry without being paid. Former business partners of founder and owner, Anthony Vaughan, are at loggerheads with him over shareholdings, ownership of various titles and monies owed.
The Media Online previously reported on the demise of the company, which published the high-end glossy Property Magazine, as well as some custom magazine titles. At the time, Vaughan did not answer questions posed to him but has now responded to the various accusations levelled against him by staff and former business partners.
JJ Steenkamp and AV Dawson, for KPMG, are liquidating Media Nova. A creditors meeting was held before the master of the high court last Friday. The status is that Media Nova owes R10 315 000, an “estimate of what is expected to be recovered”, according to court documents. The demise of the company is attributed to a major drop in advertising revenue, which, because the Property Magazine was delivered free to wealthy suburbs in South Africa, formed the basis of its funding model. But, said the document, the “liquidators are of the view that there may be other causes for the failure of the company. This aspect needs to be further investigated through a formal enquiry”.
And, it added, “It would appear that an enquiry into the affairs of the company may be beneficial to creditors in order to determine inter alia, whether any dispositions of its assets pre liquidation can be set aside, whether the debtors are recoverable and whether the conduct of the director can be regarded as participating in the business of the company in a reckless manner”.
It also asked “whether the Director can be held personally liable as envisaged in Section 424 of the Companies Act of 1973”.
“I am personally assisting the liquidator as required,” Vaughan told The Media Online. “Specifically I am assisting the liquidator to be able to recover all possible monies owing from advertisers that have not paid Media Nova for services rendered, such that the maximum can be distributed to the creditors. The total amount of invoices for advertising that has been provided by Media Nova and remains unpaid is R3 500,000. I am also attempting to ensure that former staff members who were not paid their final month of salaries are considered ‘secured preferential creditors’ and as such are paid first from any money recovered,” he said.
Paarl Media Group brought the liquidation motion against Media Nova.
Paarl Media was Media Nova’s “preferred printer”. Vaughan says Media Nova “ran into financial difficulties in 2009 and negotiated “a long-term payment arrangement with Paarl to repay the amount owing”. He said Media Nova “made significant monthly repayments to Paarl until December 2012 and in doing so reduced the overall outstanding balance significantly”.
But the deal went south in early 2013 as Vaughan tried to secure a “revised and reduced” payment plan so the company could continue to trade.
“Whilst Paarl were accommodating to a point they informed me that as this was an extraordinary item at each board meeting it had, and I quote, ‘become an irritation at board meetings and now had to be dealt with one way or another’. As such they had run out of ‘patience’ (despite over three years of payments) and informed me that they would be liquidating Media Nova,” Vaughan said, adding that he’d wanted to put the company into business rescue, but that Paarl Media refused.
“Given that from a financial perspective the monies owing to Paarl were written off by them many years ago, that Media Nova had repaid a significant amount of money on a regular schedule since 2009, and that we were attempting to restructure the remaining monies owing, I believe that Paarl’s action to liquidate Media Nova was harsh and insensitive towards the fate of our employees and our ongoing attempts to satisfy the amounts owing,” he said. Vaughan says he owes staff in the region of R400 000.
Staff, however, was not prepared to wait and have taken Vaughan to the dispute resolution body, the Commission for Conciliation, Mediation and Arbitration (CCMA). “Five former staff members have brought a case of constructive dismissal against TGE Media (Pty) Ltd. TGE Media (Pty) Ltd is defending the case primarily on the basis that this company never employed these individuals. The matter is ongoing,” he said.
Vaughan, as The Media Online recently reported, set up TGE Media, last year. TGE Media, along with Executive Publishing, 6th Street Media, as well as an investment business, Dusty Moon Trading, were registered with Cipro between May and October 2012.
Vaughan had expanded his publishing business to encompass custom publishing titles. These included Indwe (SA Express’s in-flight magazine), the SAPOA’s magazine, and the Cape Town Official Visitors’ Guide. He also published another of his own titles, Sandton magazine, under the banner of one or another of these companies.
But it appears there are some serious issues around the publication of the various custom titles, and the business partnerships Vaughan entered into.
Mynard Slabbert, owner of Media Nova Namibia (a completely separate operation that is “far from insolvent”), pulls no punches. He and Vaughan were responsible for publishing Air Namibia’s Flamingo title, and the Official Namibian Tourist Guide. Slabbert says Vaughan was going to buy shares in the company, but was initially contracted to edit and publish the title. “I had a lucky escape,” Slabbert says, adding that he fired Vaughan as the editor, with his last issue being August 2013. Slabbert says he won the tender to publish Flamingo and went into business with Vaughan on the understanding that Vaughan had won an award for Indwe magazine. “I later found out that this award was won before Vaughan took it over,” he said.
He claims Vaughan was also contracted to produce and distribute 28 000 Namibia Tourism Board ‘Welcome to Namibia’ (WTN) DVDs by inserting them into Vaughan’s South African magazines such as Property Magazine and Sandton. Vaughan was paid 60 000 Namibian dollars to do so. “But I had an ugly suspicion this wasn’t done, despite Vaughan being paid to do so,” Slabbert says.
He immediately wrote to the client, saying he needed to “ alert you of a possible problem we have encountered whilst conducting an internal audit.
“Mr Anthony Vaughan of South Africa was responsible for various deliveries pertaining to the WTN DVDs in South Africa. I was alerted to a possible non-delivery and made an effort to contact various people to get a better idea of what exactly happened in that regard,” he wrote.
Slabbert says he now has to make good on the deal, at a considerable financial cost to himself.
The issue has led to a major war of words – and emails – between himself and Vaughan. Slabbert has accused Vaughan of trying to scupper his Flamingo tender by writing false emails to Air Namibia and Flamingo’s advertising clients.
“Our attorneys have written to Mr Vaughan and have demanded that he stops his criminal conduct. It appears that he sees it fit to continue slandering and extorting us from the relative safety of South Africa,” he says.
Vaughan says it was Media Nova Namibia’s responsibility to produce the 28 000 DVDs that would then be provided to Media Nova for insertion into the published titles of Sandton and The Property Magazine. “Mynard Slabbert directly controlled this project, within Media Nova Namibia, and he provided no DVD’s for this purpose to Media Nova for insertion,” he says.
Slabbert dismisses Vaughan’s claims as “falsehoods”. His lawyers have written to Vaughan telling him to desist from sending “unsolicited and untrue comments” to Air Namibia. The letter also informed Vaughan that Slabbert had terminated all business relations with him. In addition, it accuses Vaughan of manufacturing “false correspondences and/or amended existing e-mails and letters, and manipulated same to reflect falsehoods and have forwarded these to Air Namibia in an attempt to thwart our client’s contract with Air Namibia”.
Slabbert has now laid criminal charges against Vaughan. In an affidavit, lodged in Namibia and in South Africa, Slabbert says Vaughan has committed fraud, theft and extortion. He says Vaughan, after having his contract to produce Flamingo terminated, tried to “extort” a further 143 000 Namibian dollars from Slabbert. He also accused Vaughan of diverting an advertising sales rep, contracted to sell ads for Flamingo, to concentrate on selling ads for Sandton magazine, despite Slabbert paying her salary.
Vaughan disputes Slabbert’s version of events. “I am not aware of any charges and the authorities have not contacted me in this regard. Should these charges materialise I will be very happy to defend these charges and in doing so I will bring counter claims and charges against Mynard Slabbert and his business partner Chris Coetzee. Mynard Slabbert is prepared to lie, even under the legally binding oath of an affidavit, as he has done in this matter, in an attempt to bully his victims into submission,” he told The Media Online.
Vaughan says he used TGE Media resources and sub contractors to produce the magazine for the May to August 2013 editions. “Early in August 2013 I asked Mynard Slabbert to transfer the previously budgeted and agreed fees for the work of TGE Media to TGE Media and he refused. This amounts to unpaid fees of approximately R150 000. At this point as TGE Media wasn’t getting paid it suspended its services to Media Nova Namibia and has commenced legal action against Media Nova Namibia as well as highlighting a number of fraudulent and dishonest items to Air Namibia regarding the professional conduct of Mynard Slabbert. The non payment of fees to TGE Media was his attempt to bully me to renegotiate my shareholding with Media Nova Namibia,” he says.
Vaughan’s partner in the Indwe publishing venture, Nolo Sealetsa, told The Media Online he started working for Vaughan as an employee in 2010. But he inherited some money, and bitten by the publishing bug, decided to invest in Vaughan’s 6th Street Media, putting down R300 000 to secure his stake and effectively giving Vaughan a BEE partner, a vital component in winning certain publishing contracts. Again, the relationship went sour and Sealetsa tried to buy out Vaughan’s share in 6th Street Media. He offered Vaughan R1 million for his stake. “But he tried to milk me for more, pushing it up to R2 million”. But as the trouble in Media Nova became more apparent, Sealetsa decided to cut his losses, asking Vaughan to repay him his R300 000. Vaughan, he said, started to pay him back monthly, but only made one payment of R30 000. “I am considering suing for the remaining R270 000,” Sealetsa says. The contract with Indwe was subsequently cancelled as it required a BEE stakeholding, Sealetsa says. “He almost crushed my dream,” says Sealetsa. “I’m a young (29) up and coming entrepreneur who wanted to launch myself into the media business.”
Vaughan confirmed Sealetsa’s offer to buy his shares in 6th Street Media but said that it “unfortunately failed over one of two small clauses in the sales contract”. Vaughan also confirmed a first payment was made to buy out Sealetsa’s shares. Vaughan said he had suspended all further payments to Sealetsa following the cancellation of the publishing contract by South African Express.
“As a result of the cancellation of the publishing contract 6th Street Media are currently preparing legal action for damages in excess of R5 million against each of South African Express for breach of contract and Nolo Sealetsa for breach of his fiduciary duties as a director of 6th Street Media,” Vaughan says.
Back in Cape Town, where Media Nova first launched the Property Magazine, Vaughan is also facing court action in relation to his failure to produce Cape Town Tourism’s Official Visitors’ Guide. A source told The Media Online Vaughan was paid to produce the magazine, but was unable to pay printers to release the annual title. Cape Town Tourism PR Sascha Polkey of Rabbit said she was responding to questions from The Media Online on behalf of Cape Town Tourism’s new CEO, Enver Duminy. “Although you are correct about the issues with last year’s Cape Town Tourism Official Visitor’s Guide, unfortunately he has advised that he is not comfortable with divulging all the details because they are currently in a legal battle with Mr Vaughn,” she said.
In response, Vaughan said he was “not aware” of any suit. “The contract with Cape Town Tourism was between them and Media Nova and as such forms part of the liquidation. Cape Town Tourism is listed as one of the companies owing Media Nova money as part of the liquidation,” he said.
Clearly, there are many issues to be resolved where Vaughan’s publishing businesses are concerned, many of them in court. In the meantime, Vaughan says as the managing director of Media Nova, he appreciates why the comments on demise of Media Nova are being directed at him. “I am sorry for everyone that this has affected but I can assure you that I have worked tirelessly since the financial troubles started and right up until the final day of trading in March 2013 to secure the business success of Media Nova,” he says. “I also understand and sympathise with the situation, particularly with the staff, that this liquidation has caused and I am still working hard for their final monies to be paid to them through this liquidation process. “
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