MultiChoice denies R100-million ‘kickbacks’ to SABC

29 November 2017 - 16:16 By Kyle Cowan
Image: AFP Relaxnews ©All rights reserved

Top pay TV provider MultiChoice has denied it paid R100-million in kickbacks to the SABC to gain “political influence over digital migration" of the public broadcaster‚ which posed a significant threat to the company’s revenue stream.

On Tuesday‚ the DA’s Phumzile Van Damme said SABC board minutes from 6 June 2013 revealed the payments were to be “in exchange” for the SABC’s 24-hour news channel which would be aired on DSTV‚ and it would be up to the public broadcaster to monetise the channel.

The SABC’s migration from analogue to digital broadcasting has been mired in controversy‚ as allegations of bribery‚ corruption and tender manipulation surfaced regarding the procurement of five million set top boxes (STB) which could receive the new digital signal.

The STBs would be distributed for free‚ while a further three million would be sold by private retailers. 26 companies were awarded work on the contract to supply the STBs but the process has been subject to a court challenge that ended up before the Constitutional Court‚ a probe by the Competition Commission and an investigation by the Special Investigations Unit.

In August‚ the Constitutional Court upheld a decision by former communications minister Faith Muthambi that the STBs did not need to have the capability to decrypt broadcast signals‚ which was a move in favour of Multichoice which holds a strong monopoly in the pay TV sector in South Africa.

Controversially‚ Muthambi was in 2015 awarded powers by President Jacob Zuma that led to her being able to make the decision.

This would play in favour of state capture culprits‚ the Gupta family and their ANN7 news channel. Last week it emerged that Multichoice had agreed to pay the Gupta family R25-million for their channel to be aired‚ in what has been described as a “kickback” agreement – also allegedly for influence over the STB project.

Multichoice has denied wrongdoing in its dealings with the Gupta-owned TV channel. “The minutes reveal a ‘clandestine’ meeting attended by former SABC board members and executives‚ including Ellen Tshabalala‚ Hlaudi Motsoeneng‚ Lulama Makhobo and Jimi Matthews‚ with the then CEO of Multichoice‚ Imtiaz Patel‚” Van Damme’s statement read.

A MultiChoice spokesperson said on Monday the meeting was not clandestine‚ and no kickbacks were paid. “This was not a clandestine meeting. No kickbacks were paid. This was part of a negotiation meeting with the SABC. The final decision on this proposal lay with the SABC Board.”

Van Damme has now written to the Independent Communications Authority of South Africa (ICASA) asking for an investigation into the payments.

The spokesperson would not respond to a follow up question on whether or not MultiChoice would welcome the probe.

According to Van Damme‚ the minutes quote Patel as saying: “We would not normally pay for a news channel. Ok. We don’t. There’s a unique relationship with eTV that everybody espouses etc. It’s got unique conditions.”

He continues: “…we need to justify to our Board to say why would we pay you R100m a year which is a lot of money. Ok. It’s after tax money. To make R100m net you have to make R150m or R200m‚ R300m in turnover. 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.

“And thirdly‚ we are saying we also need to justify this problem of conditional access [unencrypted set-top boxes] 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.”

Van Damme said the implications of Multichoice making payments in order to secure influence over government policy in its favour and to solidify its dominance in the paid TV sector was “serious” and showed it was a company that would “stop at nothing”.

“It is an undisputed fact that two years after this meeting‚ and the payments to ANN7‚ digital migration policy was changed to Multichoice’s favour‚” Van Damme noted. “We hope that ICASA will finally flex its muscle and take a clear stand against what appears to be seriously unethical conduct by a company it regulates‚” she said.

Digital migration may yet face further delays. In August‚ the Universal Service and Access Agency of South Africa (USAASA)‚ which regulates and controls the procurement of STBS‚ filed papers with the Gauteng High Court asking for the awarded tender for the STBs to be declared invalid.

The matter has yet to be heard.