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Masstores hit with R7.5m TV licence fine

Nov 11 2012 16:12 Loyiso Sidimba, City Press


Company Data

MASSMART HOLDINGS LIMITED [JSE:MSM]

Last traded 140.48
Change -1.21
% Change -0.01
Cumulative volume 101408
Market cap 30.50bn

Last Updated: 31/07/2014 at 04:27. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - EduSolutions, the company at the centre of Limpopo’s textbooks scandal, has landed one of the country’s biggest retailers in a spot of bother.

The company’s failure to buy TV licences has seen retail giant Masstores slapped with a R7.5m fine, the biggest yet by the SABC.

The company bought 2 500 TV sets from Masstores, the owners of Game, last March without obtaining TV licences.

This breach led to the fine, which was issued by the SABC under the Broadcasting Act.

The R7.5m fine is made up of R3 000 penalties issued for each of the 2 500 unlicenced TV sets. The SABC said the biggest fine issued prior to this was for R982 000.

EduSolutions’ costly mistake emerged in the South Gauteng High Court last month. Masstores had approached the court to have the fine set aside. However, Judge Lucy Mailula dismissed Masstores’ bid on September 4.

Now EduSolutions may face a separate court process for allegedly failing to comply with the law.

If this goes ahead and it is found guilty, EduSolutions and its bosses could be slapped with additional R500 fines, or face imprisonment of up to six months.

EduSolutions has a multimillion-rand contract to deliver a variety of goods to Limpopo’s 4 000 schools.

Masstores told City Press that Game and DionWired sold about 328 000 television sets between July 2010 and June last year with only one unresolved TV licence query.

Brian Leroni, corporate affairs executive at Massmart Holdings [JSE:MSM] – which owns Masstores – insisted the company complied fully with the SABC TV licence requirements.

“We’re awaiting the court’s written judgment, which will provide further clarity in this matter,” said Leroni.

EduSolutions bought the 2 500 TV sets on behalf of the schools and they were also expected to deliver 2 500 DVD home theatre systems as part of the deal.

The TV deal was worth R7.5m and the DVD players were worth another R2.5m, according to papers filed at the South Gauteng High Court in the original matter.

“Game has failed to comply with the prescribed procedures for the sale of televisions,” the SABC’s acting audience service head, Juanita van Rensburg, said in court papers.

In court, Masstores financial director Ann Hansen said when the company sold the goods to EduSolutions, it was under the impression EduSolutions had already spoken to the SABC about the licensing of the sets.

The Samsung TV sets and DVD players were to be delivered to the schools from the Game branch in Polokwane.

The SABC demanded to see EduSolutions’ TV licences and said that, upon delivery each school’s governing body would also be required to apply for its TV licence, on top of those EduSolutions was already supposed to have.

Schools are required to have TV licences, although they do not pay for them.

In court, the SABC’s acting legal affairs executive, Thabang Mathibe, denied that he spoke to EduSolutions about licensing before the deal went through.

Mathibe confirmed Masstores was liable to pay penalties.

SABC spokesperson Kaizer Kganyago said the Masstores matter was still ongoing as the retailer might file an appeal against the judgment.

EduSolutions said it was aware of the matter, but was not at liberty to comment on court proceedings.

- City Press


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