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Multichoice enquiry reveals no evidence of corruption in ANN7 deal

Though media giant MultiChoice admits it made “mistakes” and there were “procedural shortcomings” in its dealings with formerly Gupta-owned channel ANN7, its audit and risk committee concluded that “there is no evidence of corruption”, MultiChoice chief executive Calvo Mawela said during a press briefing on the findings held on Wednesday.

“We will however not be renewing our contract with ANN7, instead we are going to be hosting a new black-owned news channel and we will be calling for proposals from interested media groups very soon”, said Mawela.

“In addition we will ensure processes are put in place to highlight issues of controversy as they arise swiftly,” he told journalists.

On November 1, last year MultiChoice launched an investigation into payments made to ANN7 following reports by News24 that it paid the controversial channel R25-million upfront as part of its contract with the company.

When asked by journalists at the press conference if this was common practice, Mawela denied the payment was illegal, saying the audit and risk committee did not find any irregularities with the payment. “It is common practice for a broadcaster to pay for the content, including local new channel”, he said.

Mawela said MultiChoice paid other television channels in excess of R25-million.

He also denied reports that a R100-million payment made by MultiChoice to the SABC was an effort to lobby then-communications minister Faith Muthambi to create policies in favour of delaying digital migration.

The Democratic Alliance in November 2017 requested an inquiry into the payments between MultiChoice and ANN7 in November 2017.

“Those allegations were serious and we have taken very seriously”, said Naspers chief executive Bob Van Dijk during the press briefing.

Mawela said no evidence of corruption was found. However, Constitutional law expert Pierre de Vos took to Twitter to voice his concerns commenting the upfront payment of R25-million to ANN7 “sounds like a bribe to me”, in response to Mawela’s denial of any wrongdoing.

Naspers, the largest shareholder in MultiChoice, suffered a loss in share price after allegations of corruption emerged.

“We have put a number of management controls and corrective measures in place to ensure that this does not happen again”, said Mawela.

Recommendations made by MultiChoice’s audit and risk committee chaired by Don Eriksson, including four non-executive directors and independent non-executive director, Advocate Kgomotso Moroka, suggest ensuring robust due diligence processes are followed for start-up channels and formalisation of the MultiChoice lobbying process in the absence of national guidelines on lobbying.

MultiChoice has also cleared group chief executive Imtiaz Patel of any wrongdoing in his involvement in negotiations with ANN7.

“Patel played no role in Gupta’s interest and it was agreed as a collective with members of the senior management to enter into an agreement with ANN7 and was convinced that he always acted in the best interest of MultiChoice” said Van Djik.

The MultiChoice contract with SABC did not form part of the brief given to the Audit and Risk committee, but Mawela said parliament “has referred a number of third party agreements to the special investigations unit (SIU). MultiChoice will comply”.

The Independent Communications Authority of SA (Icasa) will also be conducting an investigation into MultiChoice to see if the company is guilty of lobbying for a policy stance in its favour. 

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Thulebona Mhlanga
Guest Author

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