30 April 2004
	BLACK GIANTS Cuba CONTROVERSY and COMPLEXITY By Duma Gqubule Despite the personalities that drive the company making headlines, Safika has yet to land a big deal

When it comes to making headlines, Safika is the undisputed leader of black economic empowerment (BEE) companies, thanks to the colourful personalities who drive it. It was started by Vuli Cuba, a hands-on entrepreneur with a passion for information technology, who was joined by Moss Ngoasheng after he had spent five years as economic adviser to then deputy president Thabo Mbeki. The triumvirate was completed by Saki Macozoma, the former Transnet MD who owns 60% of the company and is remembered for taking on public enterprises minister Jeff Radebe. Since establishing its roots in technology, the company has diversified into numerous sectors of the economy and has a complex maze of shareholdings in relatively small companies. Safika is one of the usual suspects mentioned whenever there is talk in Johannesburg BEE circles of a big deal going down - for example, De Beers, Standard Bank or Dimension Data. But though the company has yet to land a mega deal, there have been headline-grabbing controversies, such as a legal battle with Makana Trust over the ownership of 1% of MTN shares. Safika made a fortune out of its speculative investment in MTN. A sum-of-the-parts valuation conducted in March 2000 valued the stake at R469m, net of the costs to the funders. The company had to pay out former director Eric Phillips, who owned 10% of the company, his proportional share of the windfall. It then had to pay Makana R47m in an out-of-court settlement. Then there was a battle with Worldwide African Investments for control of New Africa Investments Limited (Nail). Safika won the battle after paying a huge premium to Hollard Insurance and one of Nail's departing directors. It cost Safika another R60m of its MTN proceeds to get control of Nail. The value of the investment evaporated over the next few years as Nail, under Macozoma's leadership, failed to develop a coherent strategy for the company. Macozoma and Ngoasheng made more from their share options in Nail than they did on their investment through Safika. However, the company is set to recoup a portion of its equity losses through its participation in the Tiso Consortium, which eventually bought Nail to strip its assets for a profit.