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Switching off ANN7 not enough for MultiChoice

Feb 05 2018 10:59
Adriaan Basson

CALVO Mawela, the CEO of MultiChoice, the company which owns the country’s largest and best sports channel SuperSport, should know the term “hospital pass” very well.

For those not acquainted with rugby, a “hospital pass” means a very poorly timed pass of the ball to a team-mate who is then tackled heavily by a player from the opposing side. The player quite often literally ends up in hospital.

Mawela, who was appointed CEO in mid-November 2017 amid an outcry over MultiChoice’s payments to the Gupta-owned propaganda channel ANN7, was on the receiving end of a hospital pass last week.

It fell to Mawela - who calls ANC chairperson Gwede Mantashe father-in-law after marrying his daughter Nombasa in 2012 - to convince the public last week why axing ANN7 from his platform was the only punitive action to follow an internal probe by the MultiChoice board.

There is no doubt that Mawela is smart and up for the job. A broadcasting engineer who cut his teeth at Sentech, Mawela joined MultiChoice in 2011 and quickly rose through the ranks until he replaced Mark Rayner a bit over two months ago.

At the time, a large portion of the #GuptaLeaks emails was made available online. Civil society organisations picked up on an unsigned third amendment contract between MultiChoice and ANN7 which would have increased the annual payment to the Guptas’ TV channel from R50m to R150m.

MultiChoice’s reaction to this was blunt and wholly inadequate. The company denied increasing the Guptas’ payment, until News24 revealed a week later that a fourth amendment agreement signed by a senior MultiChoice executive was also found among the thousands of leaked emails.

This was Mawela’s first week on the job.

The fourth amendment agreement showed that MultiChoice not only agreed to increase the annual payment to ANN7 to R141m per year, but also threw in a once-off sweetener of R25m to the Guptas.

This contract was signed by Glen Marques for MultiChoice and Nazeem Howa for Infinity Media Networks, the holding company of ANN7. Marques is CEO of something called Myriad Programming Services, that “oversees all the entertainment programming and channel acquisitions for the Pay-TV group”.

The #GuptaLeaks show that negotiations with the Gupta-owned channel were overseen by Imtiaz Patel, group CEO of MultiChoice South Africa at the time (who said ANN7 would not get a cent from the platform when the channel launched).

Explanations for opaque transaction

The once-off R25m payment lies at the heart of allegations of state capture against MultiChoice. At a heated press conference on Wednesday, Mawela failed spectacularly to put the ghosts about this payment to rest. A number of different explanations have now been provided by MultiChoice for this opaque transaction.

It is at this point that one must cut Mawela some slack. When the ANN7 deal was negotiated, he was head of stakeholder and regulatory affairs at MultiChoice. The ANN7 deal and all the “mistakes” that were made happened on the watch of Patel, who was appointed head of video entertainment for Naspers in October 2015 and now lives in Dubai.

Patel was conspicuously absent from Wednesday’s press conference, but his ghost loomed large as Mawela, Naspers CEO Bob van Dijk and Don Eriksson, a retired chartered accountant and MultiChoice board member, attempted to explain why “mistakes” were made with the ANN7 contract, why nobody would be fired or disciplined for this, and why the only victims of this saga are the employees of ANN7, who will all be jobless after August.

Patel is at the centre of this scandal and until his role is fully explained, it won’t go away.

The MultiChoice board essentially investigated four things:

  • Whether Patel was conflicted through a business connection with Tony Gupta and Duduzane Zuma;
  • Whether the R25m constituted a bribe or irregular payment to ANN7;
  • Whether Clarissa Mack, MultiChoice’s former head of regulation and police, influenced government policy by drafting confidential memoranda for former communications minister Faith Muthambi; and
  • Whether MultiChoice lobbied the Guptas through this to support its position on set-top box encryption.

The answer to each of these questions by the panel, led by Eriksson, was no. The panel however identified “procedural shortcomings”, including the lack of a due diligence exercise on the Guptas (when their close relationship with the Zuma family was already well publicised in the media) and the lack of proper lobbying regulations.

As a symbolic gesture, Mawela announced that ANN7 would be canned in August, and that MultiChoice would open a tender for a new black-owned local news channel. 

If Mawela had hoped the saga would disappear after his press conference and uncomfortable interview with Carte Blanche, he was wrong.

  • Media freedom advocates are challenging the decision to drop ANN7 after MultiChoice found no corruption or irregularities with the contract;
  • Regulator Icasa is still finalising its investigation into the ANN7 contract and MultiChoice’s dealings with the SABC;
  • MultiChoice is refusing to release the report of Webber Wentzel attorneys and an independent audit firm that informed the board’s findings. This does not bode well for transparency and the credibility of what is perceived as an “internal investigation”; and
  • Mawela’s close familial relationship with Mantashe has already fuelled speculation on social media that canning ANN7 was a political move to please the “new” ANC leadership under Cyril Ramaphosa, who Mantashe supported. Mawela said the new channel to replace ANN7 must be free from political interference, but critics will cite his closeness to Mantashe as a conflict of interest if an ANC-aligned provider is chosen.

It’s one thing to admit “mistakes” were made, but quite another to think your customers and the public would be naive enough to not insist on knowing what those mistakes were, who made them and what steps you are taking against these individuals to make sure history doesn’t repeat itself.

Switching off the lights at ANN7 and walking away is simply not good enough.

- Fin24 is part of Media24. Both Media24 and MultiChoice are owned by Naspers.

* Adriaan Basson is Editor of News24.


Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

ann7  |  multichoice  |  adriaan basson  |  opinion
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