How the SABC lost R1.5 billion in “irregularities”

The City Press has reported that irregular advertiser discounts cost the SABC at least R1.5 billion over an 18-month period.

Nexus Forensic Services conducted a forensic investigation into the SABC’s Commercial Enterprise division and its top advertisers – which contributed most of the broadcaster’s R6.6 billion sales income over the period.

According to the report, it found that discounts provided to these advertisers were as high as 85% and totaled R1.517 billion between January 2018 and June 2019.

A minimum of 17 junior account executives and senior managers allegedly ignored a variety of rules to grant these discounts.

“These discounts and added value devalue the rate card rates and have significant impact on the revenue collected by the SABC,” stated the report.

One employee was found to be particularly negligent. This person allegedly provided confidential information to his wife, who was running an agency that advertised with the SABC.

This person then spent millions of rand on beachfront properties and about 20 vehicles, the report added.

“We recommend that the SABC consider instituting appropriate disciplinary action against the employee,” recommended the investigation findings.

Corrupt staff members

In dealing with corrupt staff, the SABC fired former Commercial Enterprise executive Tshifhiwa Mulaudzi in December 2019 on a variety of charges upon which he was found guilty – including corruption, dishonesty, and failure to act in the best interest of the SABC.

Mulaudzi was also found to have received an international trip to China as well as a job for his wife from a company with a big advertising deal with the SABC.

Mulaudzi’s lawyer denied any wrongdoing.

“The forensic investigation… by the current leadership is intended to justify underhanded tactics to get rid of professionals that have dedicated their lives to serve the organisation,” said Mulaudzi.

A source told the City Press that disciplinary hearings had also been brought against three other employees.

Massive financial impact

The SABC reported in September it had suffered a net loss of R482 million for the 2018/19 financial period. Revenue declined by 3% during this time.

“While the corporation pursued cost containment measures actively, the decline was mainly as a result of cash flow constraints,” the SABC said.

It appears that if the irregular discounts had not taken place, the SABC may have boasted a profitable financial period.

Instead, the SABC announced in September that it was technically insolvent and was struggling to honour payments to service providers and other contractual obligations.

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How the SABC lost R1.5 billion in “irregularities”