MultiChoice has revealed the key findings of its Audit and Risk Committee investigation into the channel agreement deal with ANN7, highlighting the mistakes it made.
It also investigated concerns over lobbying former Minister of Communications Faith Muthambi to assume responsibility over all broadcasting matters in South Africa.
While the committee highlighted several procedural mistakes, it reported there was no evidence of corruption or illegal activity.
The mistakes it found were:
- No comprehensive due diligence of channel ownership was performed on ANN7.
- There are no corporate guidelines for lobbying.
- MultiChoice did not react quickly enough when concerns were raised over the ownership of ANN7.
As a result of the committee’s findings, MultiChoice will institute stricter due diligence procedures for all new start-up channels, and develop a policy on lobbying.
Measures have also been put in place so that concerns are escalated to its board sooner, said MultiChoice.
MultiChoice also announced it will not renew its contract with ANN7 this year.
“Concerns about MultiChoice’s relationship with ANN7 and questions about how it lobbied government were raised in the media in November 2017,” said MultiChoice.
As a result of the reports, the MultiChoice Audit and Risk Committee assessed the following:
- Whether appropriate procedures were followed in relation to the ANN7 contract.
- The payments made by MultiChoice to ANN7.
- Whether there were irregularities in the submissions MultiChoice made to the Minister of Communications.
The committee found that the commercial terms of the ANN7 contract are within acceptable parameters associated with the establishment of a news channel.
“In addition, the R25-million upfront payment to ANN7 made on 15 September 2015 was neither abnormal nor unusual,” said MultiChoice.
It said other channels previously received upfront payments as part of the channel negotiations, including the SABC.
The committee also commented on allegations concerning Imtiaz Patel’s -MultiChoice CEO at the time – relationship with the Gupta family.
“Following the committee’s work and enquiries made by Naspers, it is clear that Imtiaz Patel’s previous relationship with the Guptas predates his appointment at MultiChoice, played no role in the terms negotiated for the ANN7 channel, and that he acted in the interests of the company,” said MultiChoice.
“The ANN7 channel was negotiated as a collective by members of the senior management team.”