/ 1 December 2017

‘Probe MultiChoice and Naspers’

(Oupa Nkosi/M&G)
(Oupa Nkosi/M&G)

Naspers may try to wash its hands of mounting evidence against MultiChoice that has prompted allegations of undue influence on key policy decisions to favour its own business interests, but it appears the parent company, and its chair Koos Bekker, may also have a case to answer.

Much like KPMG Global’s response when first asked how it would deal with allegations of state capture in South Africa, Naspers has deferred all accountability to its compromised subsidiary, MultiChoice.

The difference here, however, is it is alleged that Bekker was complicit in pushing for policy to favour the dropping of encryption for set-top boxes, which would be in the interests of the MultiChoice monopoly on pay television.

“Koos Bekker was aggressively involved in pushing for dropping encryption. That’s the only issue he ever discussed with me,” former communications minister Yunus Carrim told the Mail & Guardian this week.“[MultiChoice group chief executive] Imtiaz Patel seemed to do little more than do his bidding in an even more coarse and crude manner. Now Bekker seems to be throwing Patel under the bus.”

Bekker seemed to believe that what was good for Naspers was good for the country, said Carrim. He
“simply refused to understand why the ANC supported encryption.
He just wanted to have his way.”

In a 2014 memorandum penned
by Bekker and sent to senior management — as reported by the M&G in 2015 — he criticised Carrim, claiming he was under the power of free-to-air channel e.tv (which would benefit from encryption). In the memo, Bekker also reportedly said Carrim would not be reappointed after the elections, which indeed transpired.

Carrim said it was inappropriate for him to comment on a portfolio he no longer occupied, but he was prepared to defend his reputation. The policy, Carrim said, had emerged from the 2012 ANC Mangaung policy resolution to encourage competition in the pay-TV sector, previous Cabinet decisions, and decisions made by the ANC national executive committee’s communications subcommittee.

This week, SABC board minutes from 2013 — leaked to the Democratic Alliance and circulated — showed MultiChoice offered the public broadcaster R100‑million a year to air its 24-hour news channel, with a specific request that the broadcaster oppose the encryption policy.

Furthermore, part of the explosive #GuptaLeaks cache, reported on by News24 and amaBhungane in recent days, showed MultiChoice paid large sums to news channel ANN7 (then still owned by the Guptas) at the same time as then-communications minister Faith Muthambi controversially changed the ANC-favoured encryption policy decision.

MultiChoice maintains it did nothing untoward in either instance.

Naspers spokesperson Meloy Horn said the group operated businesses in 120 countries and needed to respect the autonomy of its operating companies where it often has partners or other shareholders.

“We take the allegations seriously but the responsibility for dealing with the matter lies with the MultiChoice board,” said Horn.

“We have confidence in them dealing with the matter, following their governance procedures. Of course, we will verify that the MultiChoice board has addressed the matter adequately.”

Naspers did not respond to a specific request for comment on the memorandum penned by Bekker.

David Loxton, leading corporate investigations partner at law firm Dentons, said Naspers’s approach is technically correct — that MultiChoice, as a subsidiary, should first be left to deal with the matter.

But Sygnia chief executive Magda Wierzycka said Naspers should demand an explanation from the MultiChoice board and, “if that explanation was not satisfactory, the Naspers board should demand a forensic audit”.

But if the problems go up the chain — with evidence provided to link Bekker to any governance breaches — “it would be up to the Naspers shareholders to apply pressure and up to the Naspers board to take accountability,” said Loxton.

The shareholding structure of Naspers, however, offers tight control to a select few, and ordinary shareholders have little say. Just 0.2% of the shareholders, Bekker included, hold 68% of the vote.

In the case of KPMG, which is not listed, it was not shareholders who put pressure on the firm to account but rather the court of public opinion and the reputational harm that resulted, Loxton noted.

Carrim, however, said a parliamentary inquiry is in order. “Bekker is the chair of the Naspers board. Since Bekker was so involved in the matter as the then-CEO [chief executive], will the MultiChoice board investigate his conduct?

“Naspers was certainly not hands-off on this matter and surely any private investigation, apart from that by the Independent Communications Authority of South Africa [which has received a complaint from the DA], has to be done by an independent party into the behaviour of both Naspers and MultiChoice.”