02/02/2018 04:32 SAST | Updated 02/02/2018 08:56 SAST

Why MultiChoice Needs To Release Its Full Report On ANN7

Right now, MultiChoice expects South Africa to trust a statement it released, based on an investigation it conducted on itself.

Mike Hutchings / Reuters


MultiChoice's decision to drop ANN7 from its DStv bouquet has raised more questions than answers -- and the pay-TV giant withholding the report produced by its internal investigation is not helping its cause.

In a statement released after its briefing on Wednesday, MultiChoice CEO Calvo Mawela said there was no doubt that the company managed the communication of this issue poorly. He added that it is embarking on a path to restore public trust.

But the statement, and MultiChoice's refusal to release the official report emanating from its internal investigation because of "commercially sensitive" information, is counterproductive to that cause.

There are a few issues with the statement:

MultiChoice admitted that it paid an amount to ANN7 for a start-up 24-hour local news channel. In addition, a R25-million upfront payment was made in September 2015, which MultiChoice say was "neither abnormal nor unusual" because "other channels have previously received upfront payments".

Foto24 via Getty Images
JOHANNESBURG, SOUTH AFRICA AUGUST 30: (SOUTH AFRICA OUT) The New Age and ANN7 proprietor Mzwanele Manyi during the announcement on the shareholding of his company Lodidox on August 30, 2017 in Johannesburg, South Africa. During the live television broadcast, Manyi revealed that he was the sole shareholder in Lodidox the shelf company he bought. (Photo by Gallo Images / Beeld / Wikus de Wet)

However, the minutes of a 2013 meeting between the SABC's interim board and MultiChoice – which were made public by the Democratic Alliance (DA) last year – showed MultiChoice's former CEO, Imtiaz Patel, saying something to the contrary.

"We would not normally pay for a news channel. Okay. We don't," Patel allegedly said at the meeting.

So, who is lying? Patel or MultiChoice?

Last year, News24 reported that leaked emails from within the Gupta business empire showed that on top of the R25-million prepayment, MultiChoice increased its annual payment to ANN7 by R91-million – this came after the family reportedly assisted former communications minister Faith Muthambi to convince President Jacob Zuma to transfer certain broadcasting powers to her.

Muthambi then controversially pushed through a decision in favour of unencrypted set-top boxes – the system for which MultiChoice had been lobbying for a while, and one that posed no threat to its own encrypted dominance.

In its statement, MultiChoice said: "No correlation was found between payments made to ANN7 and the MultiChoice lobbying effort."

How did MultiChoice reach this conclusion, and if there was no correlation, why did MultiChoice increase its annual payment to a channel that attracts such a small percentage of DSTV's audience?

eNCA is the best-watched of the news channels on the DStv platform, but Business Day editor Tim Cohen reported last year that it earns less than ANN7 does.

MultiChoice has now endeavoured to formalise its lobbying process.

"In the absence of national guidelines on lobbying and interaction with regulators and government, MultiChoice management will develop guidelines for approval by the board," the statement said.

But in the same breath, in identifying its shortcomings, it said it should study international best practice and formalise its lobbying process. Does that then mean that MultiChoice, the largest player in the industry across sub-Saharan Africa, has no formal lobbying process? Why has it not been complying with international best-practice standards in the first place?

In a response to HuffPost SA, MultiChoice said it won't make the audit and risk committee's review data available because it contains commercially sensitive information.

"The findings and recommendations of the review have been captured in the press statement we issued [on Wednesday], along with the actions MultiChoice will be taking to implement the recommendations... In its review, the audit and risk committee verified there was no impropriety by cross-referencing the R25-million advance payment and the subsequent payments for the balance of the fee against the total fee in the renegotiated channel carriage contract. It all matched," MultiChoice said.

"The review included a data analytics exercise which checked over 82-million records over the period from 1 January 2012 to 30 November 2017. This was not only in relation to the ANN7 contract and Infinity Media but specifically looked for any transaction that could be linked to a supplier that had links to Infinity Media and its associates."

If MultiChoice is serious about restoring public trust, it should release a redacted version of the report from its investigation, leaving out information that is of a commercially sensitive nature.

Right now, the broadcaster is expecting South Africa to trust a statement that it released, based on an investigation it conducted on itself.

*This story has been updated to include comments made by MultiChoice*