Joseph Cotterill September 6, 2019When the former South African apartheid publisher Naspers lists its global internet empire in Amsterdam next week, the tale will be told of how its chairman and former chief executive, Koos Bekker, transformed the co...
Joseph Cotterill September 6, 2019
When the former South African apartheid publisher Naspers lists its global internet empire in Amsterdam next week, the tale will be told of how its chairman and former chief executive, Koos Bekker, transformed the company with a single $32m bet.
The stake in China’s Tencent that Mr Bekker bought in 2001 is worth about $133bn, making it one of the world’s most successful investments. Naspers is now too large for South Africa’s stock market, leading to the European listing.
Yet in Mr Bekker’s version of the story — which nods to Shakespeare’s Richard II — it began with failure. Naspers repeatedly bungled its early bets on Chinese start-ups, so “we sat upon the floor and told sad stories of the death of kings,” the intensely private Afrikaner told David Rowan, a tech journalist.
Then Mr Bekker spotted a spark in a Shenzhen start-up that has come to dominate China’s internet. But it was not the first or perhaps even the most important time that he had changed his company’s destiny.
When Mr Bekker joined Naspers in 1985, it had been in the business of selling hate for 70 years, effectively the propaganda arm of the National party that constructed apartheid. That changed because of the bet he was allowed to make that first year on bringing subscription television to South Africa.
The foray came less than a decade after the white minority regime had allowed TV in South Africa at all. Rupert Murdoch had not yet launched the Sky channel in Britain. Both men later used pay-TV cash to bet on the internet. Mr Murdoch picked MySpace. Mr Bekker chose Tencent. He is one of the most prescient media moguls in history — or the luckiest.
It has meant glittering prizes. Mr Bekker negotiated stock option grants as his only payment for the 17 years he served as chief executive from 1997 to 2014. “I don’t recommend it to everyone, because it’s high risk,” he said.
He owns a chunk of the super voting shares that have controlled Naspers since it listed in Johannesburg in 1994 — these days the structure reassures Beijing that the Tencent stake remains in friendly hands. In 2013 he became a dollar billionaire. Now he is worth more than double that.
In 2007 Mr Bekker bought Babylonstoren, a 200-hectare estate outside Cape Town. It is practically a cliché to note that the signs are in both Afrikaans and Mandarin. He also acquired a British country estate that he and his wife Karen Roos recently opened to the public as the Newt.
But at home, things are burning. This has been a terrible week for South Africa. Anti-foreigner riots and the murder of several women have added to a growing sense of malaise and lawlessness in an economy that is starved of growth. President Cyril Ramaphosa initially inspired hope for an end to the corruption, but his enemies in the ruling African National Congress may be gaining the upper hand.
The Naspers share price has propped up Johannesburg’s bourse and government pension funds through years of turmoil. But the company must soon begin answering to global investors. Some are already pushing Naspers, which will own at least 73 per cent of the Dutch listed company, not to rely so much on the Tencent success-driven share price to reward executives. “It was a great investment,” says Albert Saporta, a Geneva-based investor. “They shouldn’t be compensated all their lives for it.” The group says it is listening to investors on pay issues.
The son of a cattle farmer, Jacobus Petrus Bekker was born in 1952, four years after the National party won control of South Africa’s government. As Mr Bekker grew up and studied law and literature, Naspers publications censored the humiliations being visited on the black majority.
In the 1980s the couple moved to New York. It was a time of great flux at home. Many South Africans their age, including Mr Ramaphosa, Mr Bekker’s senior by a month, were joining the struggle for political liberation. Mr Bekker earned an MBA from Columbia and studied HBO, which brought pay-TV to American living rooms in 1972.
Instead of joining the US company, Mr Bekker faxed a proposal for a similar service in South Africa to Naspers at a time when the company was concerned about the threat TV posed to print advertising. Improbably, the firm backed the idea and won approval to enter the TV market by persuading PW Botha, the apartheid-era president, that his regime’s newspaper mouthpieces would otherwise fold. Many years later, the company would ask for forgiveness for its “complicity in a morally indefensible political regime.”
Under democracy, Mr Bekker inspired a different culture. “He was an excellent media owner . . . a frustrated journalist” who respected the newspapers’ independence, says Ferial Haffajee, a former editor.
The internet and pay-TV businesses were once known as the “casino” that paid for the Naspers “cathedral”, the newspapers, by journalists. The house has long since won. Tencent’s extraordinary rise has allowed Naspers to bet on promising internet businesses around the world. After the Amsterdam listing, the reinvention will start all over again. “For a group to be great, both good governance and excellent execution are required,” he said last year. “It’s not one or the other.”
The writer is the FT’s Southern Africa bureau chief
Original Source: https://www.ft.com/content/facee384-d094-11e9-b018-ca4456540ea6