We did not pay kickbacks – MultiChoice

MultiChoice has disputed allegations that it paid kickbacks to the SABC to gain support on the encryption of digital TV signals.

“This was not a clandestine meeting. No kickbacks were paid,” MultiChoice told MyBroadband.

“This was part of a negotiation meeting with the SABC. The final decision on this proposal lay with the SABC board.”

The statement follows allegations from the DA that MultiChoice paid kickbacks to the SABC to the tune of R100 million per year for its support on encryption standards.

MultiChoice opposed the government’s original intention to require support for signal encryption technology in South Africa’s digital TV specification.

The requirement for encryption was justified as a necessary measure for “conditional access” – a way to ensure government-subsidised set-top boxes were not sold overseas.

MultiChoice contended that encryption was unnecessary, however, and it was a way to get the poor to subsidise Etv’s entry into the pay-TV space.

Encryption technology also increases the cost of an STB, it said.

A stand-off then ensued between those for and against encryption.

Then, in 2013, MultiChoice signed a channel supply deal with the SABC, which included a clause that would allow the agreement to be suspended if the SABC encrypted its channels on digital terrestrial television platforms.

The deal was for R100 million per year over five years.

The minutes

The DA said it recently received minutes of the meeting in 2013 in which MultiChoice SA CEO Imtiaz Patel discussed the deal with SABC executives Ellen Tshabalala, Hlaudi Motsoeneng, Lulama Mokhobo, and Jimi Matthews.

Patel is currently CEO of Video Entertainment at Naspers, which owns MultiChoice.

The DA quoted the following from the minutes:

“…we need to justify to our board to say why would we pay you R100m a year which is a lot of money.

We are looking for the excuse and the excuse for us is to be able to justify to our board that you are giving us something in return. What are you giving us in return for the R100m? We’re saying you giving us a news channel, you’re giving us a general entertainment channel from your archives, your old, you know.

We are less focused on the core elements of it being new content. And we’ve been sort of quite open about it with Lulama, saying even if it’s old stock.

And thirdly, we are saying we also need to justify this problem of conditional access is a big problem. And in order to justify that we’re saying in addition to that, your additional channels will be available on our platform.”

The DA then quoted another section, which stated that MultiChoice was willing to “co-create a solution”.

“We are not coming here saying this is, you know, this is the be all and end all, you know. But I must say though, Lulama, that this is the very important point for us. It’s a deal breaker point, I’ll be honest. And I have reiterated it. I have said this to you before.”

The DA said it has taken the matter to ICASA for investigation.

Now read: “Diabolical and secret” R550 million SABC-Multichoice deal exposed

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We did not pay kickbacks – MultiChoice