Independent Newspapers' sales figures 'inflated'

PAUL KIRK, Durban | Friday

INDEPENDENT Newspapers’ Durban operation has been accused of fraudulently inflating circulation figures by as many as 7 000 copies in a single day.

The damning claim has been made by the largest trade union operating in the group’s Durban operation, the Media Workers Association of South Africa (Mwasa), which has, over several months, been probing the circulation figures claimed by Independent in the province.

Independent Newspapers KZN MD Graeme King refused to comment on the allegations.

Mwasa general secretary Themba Hlatshwayo said that more than three weeks ago the union’s Michelle Eckhout handed over a file of evidence in support of the claim that circulation manager Livingstone Pillay had been inflating sales figures by as many as 7 000 a day.

In the newspaper industry relatively little income is derived from sales of the product; advertising makes up most of the income. Newspapers with high circulation figures can charge higher advertising rates and attract more advertising.

If true, the claims may be the worst scandal to hit the newspaper industry since the late 1970s, when The Citizen was caught dumping thousands of newspapers down mineshafts and claiming they had been sold.

Hlatshwayo claimed his shop stewards in Durban had obtained documentation showing that Independent circulation figures were inflated by shrinking the number of newspapers returned unsold.

It is alleged that in one incident, more than 11 000 newspapers were returned unsold and this was recorded in handwritten acceptance vouchers.

However a figure of only 4 000 returns was allegedly entered on the company’s computer system.

While this might normally show up in a basic audit if the income from newspaper sales did not tally with the physical number of newspapers sold, Mwasa claimed to have discovered evidence that Pillay had found a way around the system. Independent Newspapers has several accounts into which income from sales is placed. Some of these accounts are for newspapers sold at discount prices and Mwasa says it suspects the figures were juggled around these accounts so the higher number of returns was not shown.

Hlatshwayo said that so far no action had been taken against Pillay, nor had King sent any communication to his union to acknowledge receipt of their file.

Said Hlatshwayo: “We would like to call upon Graeme King to stop fraudulent business practices and to take action against those who are guilty of committing fraud. We would also like to call upon him and Pillay to stop their campaign of union bashing. Pillay and King are very quick to pounce on a worker and fire him, so why is it that nothing gets done when senior managers are found committing an offence?

This does nothing for good industrial relations.”

Pillay has, according to the union, dismissed nearly 20 trade unionists in his past two years as chairman of disciplinary hearings in the company.

In one case, Hlatshwayo claimed, Pillay dismissed a worker for stealing a single newspaper. In another, he alleged, a manager was fired for selling scrap metal plates and using the income to buy hot food for casual nightshift workers.

When the Mail & Guardian contacted Pillay for comment, he said: “I have no idea what you are talking about.” He referred all questions to King and his circulation director, Lorne MacLean.

Pillay, along with several other Independent managers, is currently suing Eckhout for defamation after she, as a trade unionist, published several pamphlets claiming management of the Independent plant in Durban were intimidating and harassing trade unionists. The costs of the litigation are reputedly being paid for by Independent Newspapers - a charge King has not answered.

King refused to comment on the labour disputes, saying: “I am not accustomed nor willing to [discuss] internal labour relations matters with you. We have formal structures and procedures to meet and discuss these issues with the unions. You can be assured that we take our union relationships seriously and that substantiated allegations made to us by the unions are investigated and appropriate action taken.”

o This week Bongo Sishi, sports editor of the Daily News and the representative of the South African Union of Journalists in Independent’s Durban outfit, said he had filed papers with the Commission for Conciliation, Mediation and Arbitration complaining that King and the editor of the Daily News, David Wightman, had “viciously and for no reason attacked my credentials as a journalist”.

Sishi was slapped with notice of a disciplinary hearing after writing about a series of scandals within the Durban Events Corporation (DEC) - an organisation King was previously associated with.

Although King never signed the papers to formally become a director of the corporation, he was initially described as one by the company after he had accepted a directorship.

The DEC was set up by the council to publicise and promote Durban, but is currently being probed by the council for misspending millions with no proper accounting procedures.

Sishi’s disciplinary hearing was cancelled on Monday. This week other journalists in the Independent group as well as radio stations began to pick up the story.

Explaining his association with DEC, King said: “I was never a director of the Durban Events Corporation. I was approached to become a director. I initially agreed, but finally after consideration and before signing any legal documentation [CM27] to become a director, or attending any meetings, I told them that I would not be able to take up an appointment due to my many other commitments. There was never any mention of remuneration.”

On Sishi’s hearing King said: “I have not instructed David Wightman to institute any disciplinary action against Mr Sishi. I have been copied with correspondence between the two but that is my only knowledge of it. I have also most definitely not discussed the Durban Events Corporation with David Wightman nor issued any such instructions, nor would I seek to do this.”

King said the amount that the DEC spent on advertising with his titles was “... a small amount and subject to separate arm’s length commercial agreements for each event”.

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