Pay-TV company MultiChoice has denied claims of a corrupt relationship between itself and former minister of communications Faith Muthambi.
The company put out a statement saying it “noted the News24 article on our contract with ANN7” after this publication earlier on Friday published an article detailing questionable payments from MultiChoice to the news channel.
“While we understand that some people may not be aware of it, it is standard practice to pay for mainstream news channels — particularly for local 24-hour news channels. The fee structure for the ANN7 contract is in line with the costs of developing and running such a channel, and ANN7 is definitely not the highest-paid local news channel on the DStv platform.”
MultiChoice said the once-off R25-million fee mentioned in the article was “also not unusual”.
“In this case, it was a pro rata payment in terms of an amendment agreement.”
The questionable payment of R25-million to the Guptas’ controversial ANN7 channel by MultiChoice, which owns DStv and M-Net, was discovered among the #GuptaLeaks emails.
In addition, MultiChoice increased its annual payment to ANN7 from R50-million to R141-million.
Muthambi’s decision against ANC policy
The payments came after the Gupta family seemingly helped Muthambi, now minister of public service and administration, to get President Jacob Zuma to transfer certain broadcasting powers to her, something for which MultiChoice had been lobbying the minister.
Following the transfer of powers, Muthambi controversially pushed through a decision in favour of unencrypted set-top boxes, which benefited MultiChoice.
Muthambi’s decision flouted her own party’s policy on the issue. The ANC supported encryption — required for pay-TV — to promote competition in the sector.
After a lengthy court battle, the Constitutional Court earlier this year ruled that it was within Muthambi’s right to make policy decisions affecting the broadcasting sector.
MultiChoice however denies that there is any relationship between the policy outcome in its favour and payments made to ANN7. In a statement, the company said: “MultiChoice rejects your insinuations in the strongest possible terms.”
The company said the presidential proclamation creating two new ministries didn’t make sense to a number of stakeholders in the broadcasting sector.
“Several of these stakeholders made submissions to the minister suggesting it be corrected. MultiChoice was one of these, and many of its proposals were rejected. It is standard practice for companies to interact with the industry regulator and government on policy matters, including making proposals on regulatory or legislative issues. There is nothing wrong with that.”
It added: “There is absolutely no relationship between our submission on the proclamation, the channel supply agreement for ANN7, and any fees or increase in fees paid for that channel.”
The Economic Freedom Fighters (EFF) condemned the “corrupt relations” of MultiChoice and Muthambi.
Party spokesperson Mbuyiseni Ndlozi said the relationship suppressed competition within the pay TV industry.
He said Muthambi “essentially helped sustain and keep the domination of MultiChoice, which is a solely white-owned company in the pay television sector”.
“The revelations show how executives of MultiChoice rewrote government policy of digital terrestrial television (DTT) working with the Guptas who guaranteed them their influence on Zuma and Muthambi.”
Ndlozi called on Parliament to hold an inquiry into the Gupta’s influence over Muthambi.
“In this [inquiry], companies like MultiChoice must be held accountable publicly for their criminal activities in the sector, suppressing competition in favour of their domination.”
He said the EFF would report MultiChoice to the Competition Commission for it to investigate how the company influenced the policy on set-top boxes in favour of their market domination.
Ndlozi said it was not a secret that MultiChoice was established with money Naspers made through “media work that sustained apartheid”.
“Today, we learn that they continue to feed on unethical conduct to remain on top,” he said.
MultiChoice said it would not respond to the EFF. – News24