A war of words has erupted among Moshito board members over claims of bad corporate governance and a lack of accountability.
Moshito Music Conference and Exhibition, which represents the South African music industry, is supposed to act as a clearing house, allowing its members to communicate on matters affecting the music industry. Its board members are nominated from different music industry organisations and unions, such as the Recording Industry of South Africa (Risa) and The South African Roadies Association (Sara).
Moshito’s main activity is hosting an annual trade exhibition in partnership with the department of arts and culture and the City of Johannesburg. It is supposed to be registered as a Section 21 (not-for-profit) company.
Since January this year Risa, Sara and the South African Recording Rights Association Limited (Sarral) have withdrawn from Moshito, citing discomfort with the way it is being run and highlighting a lack of adequate accounting and corporate governance.
The organisations that have withdrawn point out that, two years into its existence, Moshito is still not registered as a not-for-profit entity. It also continues to operate out of the offices of the Southern African Music Rights Organisation (Samro), using Samro’s bank account. In addition, the department’s funding of an unregistered entity such as Moshito is a violation of the Public Finance Management Act.
Risa representative David du Plessis says he raised a number of these issues in a letter to Moshito in January this year but has not received a response.
“The executive committee of Risa has decided that Risa cannot continue to be involved in Moshito until such time as the issues of ownership, financial control and funding, and general management and secretarial functions have been clarified to our satisfaction,” says the letter.
Moshito chair Nicholas Motsatse and treasurer David Alexander have hit back, claiming everything is in order with Moshito’s financials and that Moshito has been independently audited.
They claim the registration of Moshito as a Section 21 company has been delayed because some board members have yet to complete the relevant paperwork. And the subsequent withdrawal of three board members has left them with fewer than the required seven directors.
“The board recently took a decision that each of the remaining organisations have two representatives on the board, thus enabling us to proceed with the registration,” says Motsatse. “We have now lodged the papers and are awaiting the registration documents.”
Motsatse says the contract that Moshito entered into with the department clearly states that Samro is entering into it on behalf of Moshito as an administrator, and there was no violation of the Act.
“The department of arts and culture pays money to Samro, and every cent that is spent is accounted for in terms of the Samro books,” says Alexander.
Alexander says Moshito has received R6million from the department over the past three years.
Ministry of arts and culture spokesperson Sandile Memela says that as far as the department is concerned it is business as usual at Moshito. “The organisation has submitted financial reports for 2004 and 2005, which we found satisfactory. In fact, there has been no indication of embezzlement of funds.”
Memela says the department is aware of the “rumbles of discontent” and the “disgruntled board members” should substantiate their claims with evidence. “We do not want to engage in what can easily pass for rumour or mudslinging with ulterior motives.”
Sarral representative and former Moshito board member Graeme Gilfillan says he repeatedly asked for the Moshito financials for last year but was given the runaround.
“Moshito is a failure,” says Gilfillan. “Everybody involved this year should resign or be fired.”
Motsatse and Alexander claim that Gilfillan and Nyathela were given the financial information when they were in charge of organising Moshito’s 2006 conference, and that the documents have still not been returned, even after both withdrew from Moshito.
Gilfillan and Nyathela dispute this, claiming that the files did not contain any financial documents and that board member Oupa Lebogo organised for them to be collected. “That is total lies,” says Nyathela. “Those files did not include the financials.”
Motsatse says he does not believe that the lack of financials is behind the withdrawal of Sarral and Sara, but rather that Gilfillan and Nyathela were, as the heads of the organising committee, under pressure to produce results for Moshito 2006. “They used it as a convenient excuse to get out of organising Moshito,” says Alexander.