SABC camps fight for control

The SABC board is split into two opposing camps, fighting over political control and the public broadcaster’s editorial independence, reveals a forensic report by audit firm Deloitte.

The investigation, ordered by the communications department and dated January 19, was leaked to the Mail & Guardian.

Deloitte’s report paints a frightening picture of the antagonistic and destructive relationships in the SABC’s top echelons.

The investigation found that although there is evidence that fundamental corporate governance structures and processes have been defined and exist, corporate governance at the SABC is “under severe strain”.

The report identified:

  • Major friction between the broadcaster’s board and executive management, largely over the dismissal of group chief executive Dali Mpofu;

  • Time and energy spent on infighting detracts from the SABC’s smooth operation;

  • The overall effectiveness of governance has been “significantly undermined”;

  • There is a “serious breakdown” in certain authorisation, review and accountability structures and processes; and

  • The board operates in “crisis mode” and is seen to interfere with management and operational matters.

Deloitte recommends urgent workshops to restore trust between the broadcaster’s board and executive managers, and an overhaul of the board’s structure.

Reacting, SABC spokesperson Kaizer Kganyago said a copy of the report had gone to the board. However, as it was intended for the minister’s eyes, he could not comment on its contents.

Meanwhile, the SABC’s top management conceded at a media conference on Thursday that the public broadcaster projected a loss of R784-million for 2009. However, it no longer faces a liquidation threat.

Chief financial officer Robin Nicholson attributed the loss to external and internal factors including the impact of the economic crisis on the company’s advertising sales and the inherent risk of the SABC funding model.
Internal factors included poor management of overhead costs such as legal fees, consultants’ fees and marketing cost overruns.

On Wednesday it was reported that attorney Barry Aaron had approached the Johannesburg High Court to have the broadcaster liquidated on grounds that it had failed to pay his fees.

These include fees for representation in a court battle with the National Lotteries Board over television show Winikhaya, in which viewers could win a house. Aaron has since told the M&G he withdrew the application on Thursday after receiving reassurances from the SABC that it would pay him the R375 000 owed to him on Friday.

According to Aaron, the SABC said it will not pay the costs of the civil action. He warned: “I’ll no longer proceed with the liquidation matter, but if they don’t pay the costs, I’ll ask for my entitlement.”

“I’ve called on them to deliver papers within five days and will be going to court for payments of the costs of the liquidation application.”

In recent months, the SABC has been plagued by allegations of infighting between its board and management, financial losses and wasteful expenditure.

At the media conference SABC executives admitted to some liquidity difficulties, but said the broadcaster was in constant talks with its bankers and treasury to ease cash flow problems.

At the meeting with treasury officials, they had discussed the possible long-term re-evaluation of the SABC’s current funding model.

“The days of the SABC funding itself are gone,” said acting chief executive Gab Mampone. The model could not hold up against its “onerous” public service mandate, he said.

Treasury spokesperson Thoraya Pandy confirmed the SABC had briefed the treasury about its financial position. However, no formal discussions were under way regarding financial assistance.

Less than 2% of the SABC’s funding comes from government. The rest comes from TV licences and commercial funding, including advertising sales.

The company is embarking on a turnaround strategy it hopes will put it back in the black within the year.

It will involve tighter cost management, including a hiring freeze and significantly reduced travel budgets.