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Samro's Dubai scandal deepens

Sep 02 2018 06:01
Charl Blignaut and Dewald van Rensburg

The Southern African Music Rights Organisation (Samro), the only local performing rights collection society in servicing the country’s songwriters, composers and music publishers, has failed to explain who received close to R30 million of its members’ money in Dubai as disclosed in its annual report.

“We will not be responding to any questions regarding Aemro before we present the report to our members at our EGM [extraordinary general meeting],” said chief executive Nothando Migogo when pressed for clarity on the astronomical salary bill paid to directors of a doomed investment, which attempted to set up the Arab Emirates Music Rights Organisation (Aemro) in Dubai.

The plan was finally scuppered when the global music rights collecting society, Cisac (The International Confederation of Societies of Authors and Composers), refused to give permission to Samro to create the region’s first collecting society.

By then, Samro had invested R37.5 million of its members’ money in the venture, according to its annual report.

Irate members have been demanding an explanation as to how so much money could have been spent without any apparent risk assessment.

Samro distributes over R300 million annually to its members who assign their rights to the nonprofit company. The money is gathered mainly from licences and fees from broadcasters and live music promoters.

It turns out that R29 665 000 of the investment was just to pay Aemro directors.

Migogo had earlier told City Press that Aemro had five directors including two Syrian businesspeople, Mohamad Hamzeh Khalaf and Yaser Aljabal who also owned 20% of Aemro through their company IPR Management.

The other three directors of Aemro were all former executives of Samro: former CEO Sipho Setu Dlamini, former chief operating officer Bronwen Harty and former chief financial officer Gregory Zoghby.

The total directors pay is listed in Samro’s report, but Migogo was not willing to clarify who of the five received how much money – or what they did to earn it.

Approached by City Press, Harty denied ever receiving a cent and Zoghby would not comment.

“In fact, no Samro executives were paid for their roles as nonexecutive directors at Aemro,” said Dlamini by email.

When the R30 million was spent on salaries over 21 months, Dlamini was no longer a Samro executive.

Asked to clarify if he was paid anything at all for his Aemro work, he did not respond.

Insiders say it was Dlamini who brought the deal to the table, predicting profits of up to R1 billion if the venture succeeded.

Critics had pointed out the obstacles to Samro ever succeeding in the territory – and members are asking the board to explain why it backed such a risky venture.

If the three South African directors of Aemro were paid nothing, that would leave Khalaf and Aljabal as the exclusive recipients of salaries totalling R30 million in less than two years.

Khalaf did not respond to questions from City Press and Aljabal could not be located.

The two are, however, seemingly no strangers to Dlamini.

While receiving his salary from Aemro, Khalaf had another full-time job at a company tied to Dlamini, Creative Kingdom, an international design and architecture firm responsible for landmarks in Sun City – among other things – with an office in Dubai. Dlamini was previously vice-president at Creative Kingdom Records, a subsidiary of Creative Kingdom.

When Samro finally pulled the plug on Aemro in August last year, it paid Khalaf and Aljabal a settlement of $600 000 (R8.2 million at the time) that added to the Aemro losses which were R47 million as of October last year.

These losses could have escalated, but Migogo was not willing to divulge details.

In November, three months after the settlement, Khalaf and Aljabal can be traced to South Africa starting a new company with Reggie Nkabinde of record company Mabala Noise.

The new company’s name, IPR Africa, suggests it is related to their Dubai company IPR Management, which owned shares in Aemro.

Dlamini, who is now managing director of Universal Music South Africa and Sub-Saharan Africa, failed to clarify his relationship with Khalaf, Aljabal and their companies or Mabala Noise.

City Press could not reach Nkabinde for comment. Irate Samro members are threatening to bring the organisation to a standstill if clarity is not provided on September 11, when the EGM is held in Johannesburg.

In a statement received after going to print, a spokesperson for Dlamini, Caryn Tomlinson said in a statement: “Sipho Dlamini departed Samro in 2016. During his tenure there, he successfully managed the organization and oversaw a reduction in its cost-to-income ratio from 27% down to 19.9%. 

“The establishment of Aemro, a society to collect authors and composers performing rights revenue and neighbouring rights in the UAE, was conducted during his tenure at Samro under the supervision of the Samro board of directors and with the approval of the UAE government. Aemro’s executive appointments during that period were also carried out under the supervision of the Samro board.

“At no time was Mr Dlamini compensated by Aemro.  He has had no involvement with Aemro since his departure from Samro. He cannot speak to issues subsequent to his departure. His role throughout has been appropriate and professional. Finally, he has no shareholding or equity in IPR Africa or IPR Management.”

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samro  |  uae  |  music
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