Secret dealings on massive digital contract leads to sacking of top SABC execs

The SABC has confirmed that two senior executives, who have been on suspension since February, have been fired for trying to hide a multimillion profit arrangement on a digital contract. 

Ian Plaatjies, who has served as the SABC’s COO since November 2019, and head of video entertainment Merlin Naicker had their employment contracts terminated with immediate effect after a disciplinary process. 

“The board has duly considered the findings and recommendations of the report by an independent chairperson and decided to release Mr Plaatjies from his duties as the SABC’s COO with immediate effect. The SABC can also confirm that the group executive for video entertainment, Mr Merlin Naicker, is also released from his duties with immediate effect after a disciplinary hearing,” acting SABC executive for corporate affairs and marketing Mmoni Seapolelo said. 

She said the SABC was not disclosing the date on which this happened or any other information regarding the development.

Plaatjies and Naicker were suspended in February at the same time that head of advertising sales Reginald Nxumalo resigned. This happened in the wake of their alleged failure to disclose a 7.5% profit-share deal with Discover Digital that runs the public broadcaster’s SABC+ video streaming service. 

A City Press report at that time said that the suspensions were on legal advice from Werksmans law firm. They recommended this after an internal audit by the SABC of the secret profit-sharing deal came to the conclusion that the three executives had failed to act in the SABC’s best financial interests. 

Werksmans said Plaatjies, Naicker and Nxulamo had allegedly deliberately concealed crucial information of the 7.5% profit-share agreement from the SABC's executive committee during their presentation of the deal, before it was signed, and also misled the committee when they said the public broadcaster would get 100% of the advertising revenue made through SABC+. 

Werkmans found a prima facie case for gross dishonesty against all three. 

City Press reported that the SABC has a R35m contract with Discovery Digital, renewable for five years, to run SABC+ as its over-the-top (OTT) video streaming service. 

According to Werkmans, the SABC business plan for SABC+ that was presented to the SABC's executive committee members during a meeting on November 7 2022, stipulated that the SABC would get 100% of the revenue generated by SABC+. 

The SABC was projected to initially make between R100m and R200m with SABC+. 

Plaatjies, Naicker and Nxulam signed the deal with the profit-sharing clause without authorisation from the SABC's head of legal or the CEO at the time.

The controversial 7.5% profit-share agreement was allegedly kept secret and only came to light nine days after the committee approved the proposal. The SABC's legal division picked up and queried the appearance of the 7.5% advertising revenue sharing clause on November 16 2022 during the contract drafting process. 

Plaatjes signed the SABC+ deal with Discover Digital a day later on November 17 2022, meaning that Discovery Digital gets 7.5% of the advertising revenue made through SABC+, above the company's quoted fees. 

According to Werkmans, Naicker misrepresented his own involvement in the agreement and failed to make sure that all costs related to the creation of SABC+ were clearly defined and accounted for. 

Werkmans found that Nxumalo “was aware of the 7.5% as a number but could not join the dots on what it was for. His response was tantamount to withholding vital information,” according to City Press. 

The Communications Workers Union (CWU) welcomed the dismissals as they come while CWU workers are fighting for their next annual salary increases after successfully winning the fight for backdated increases to be paid out in September after a three-year salary freeze. 

Speaking to TimesLIVE on Sunday, CWU national bargaining co-ordinator Nathan Bower accused the SABC of pleading poverty in the face of allegations of concealing profit, while failing to hold all those involved accountable, as well as financial managers under whose watch mismanagement was taking place. 

“The plundering of the financial resources of the SABC through shady contracts and unaccounted fruitless and wasteful expenditure every financial year cannot continue and be used as an excuse,” Bower said.