Wednesday, November 29, 2017

Democratic Alliance reveals explosive transcript of 'clandestine' SABC meeting where then MultiChoice CEO Imtiaz Patel allegedly says DStv would pay SABC to support change to the government's digital TV in favour of MultiChoice.

The Democratic Alliance's member of parliament Phumzile Van Damme has revealed an explosive transcript of what it calls a "clandestine" SABC meeting on 6 June 2013 - suggesting that the pay-TV operator MultiChoice sought to pay the SABC R100 million for its 24-hour SABC News (DStv 404) channel in exchange for the SABC's influence to change South Africa's digital terrestrial TV process in favour of MultiChoice.

Phumzile Van Damme says the minutes form part of hundreds of documents provided by the SABC in December 2016 to the ad hoc committee on the SABC inquiry.

According to the DA, the transcript of the SABC meeting support allegations in media reports last week that MultiChoice paid the controversial Gupta family millions of rand for its highly-criticised ANN7 (DStv 405) channel on DStv, in exchange for similar influence over the government's position on set-top boxes (STBs).

The release of the meeting's transcript awkwardly comes on the day that Naspers, MultiChoice's parent company, is releasing its interim results, with Naspers chairperson Koos Bekker who has not yet come out publicly to announce any possible investigation by Naspers into the flurry of allegations.

MultiChoice is the latest company to be caught up in the messy dealings of the now-notorious Gupta family embroiled in allegations of State Capture in South Africa.

According to the DA political party, the SABC minutes reveal a "clandestine" meeting attended by the former SABC board members and executives, including the nowdisgraced Ellen Tshabalala, the controversial and shamed Hlaudi MotsoenengLulama Mokhobo who quit as SABC CEO, and Jimi Matthews who eventually quit as acting SABC CEO, with the then CEO of MultiChoice, Imtiaz Patel.

Imtiaz Patel is at pains during the meeting to explain that MultiChoice doesn't ordinarily pay TV stations for their news channels to be carried on DStv, but that he would be able to convice the MultiChoice board to pay for the SABC's SABC News channel, if a set of "deal breaker conditions" in MultiChoice's favour were met.

During the meeting Imtiaz Patel tells the SABC:

We would not normally pay for a news channel. Okay. We don’t. There’s a unique relationship with that everybody espouses etc. It’s got unique conditions. They’re supposed to supply us with many more channels and it’s quite tricky at this point in time. But, besides that we don’t pay for any other news channel, anyway, Okay.”

Imtiaz Patel goes on to say:

“…we need to justify to our Board to say why would we pay you R100 million a year which is a lot of money. Okay. 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. We are less focused on the core elements of it being new content. And we’ve been sort of quite open about it with Lulama, saying even if it’s old stock. 

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.”

Imtiaz Patel also says:

So, in addition to the R100m in cash, you will be getting a lot of advertising revenue, probably the equivalent, even more, I don’t know, I don’t know the details, I don’t know to what extent, you know, given that kind of base, how much you can monetise it

In return, we can justify to our Board that, we are paying this extraordinary sum of money but we are getting something for it
That was the simple logic that we applied in our own minds. So I’m giving you a sense and therefore I’m hoping that if we can co-create a solution, we are also happy to co-create a solution. 

We are not coming here saying this is, you know, this is the be all and end all, you know. But I must say though, Lulama, that this is the very important point for us. It’s a deal breaker point, I’ll be honest. And I have re-iterated it. I have said this to you before. 

The DA in a statement about the meeting's transcript says that "the implications of MultiChoice paying kickbacks in order to not solidify its dominance in the pay-TV sector, but also secure influence over government policy in its favour, are serious".

"It speaks to a company willing to stop at nothing, including paying kickbacks to the Gupta family, thus supporting State Capture, in order to get its way".

The DA in its statement says that "while companies should be allowed the space to conduct business in a free market system, there must be adherence to business ethics and the law."

"This matter, and in particular the payments, now require thorough investigation by the South African broadcasting regulator, the Independent Communications Authority of South Africa (Icasa). The DA has written to Icasa requesting an investigation," says the party.

"The DA had hoped that following media reports about ANN7 last week, MultiChoice would take the opportunity to play open cards by revealing all."

"It refused to do so. It is now left to Icasa to reveal the truth."

MultiChoice in response to a media enquiry from TVwithThinus seeking comment from the company after the Democratic Alliance meeting and transcript release, says: "“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".

The SABC has also been approached for comment about the DA party's statement and the transcript of the SABC meeting, and the public broadcaster's reaction will be added here when received.

Other fascinating titbits from the transcript reveals:

- According to the transcript, Lulama Mokhobo is clearly on such friendly terms that she uses the nickname "Imi" for Imtiaz Patel in the meeting, instead of his full name.

- Nolo Letele, MultiChoice South Africa chairperson, also attended the meeting.

- The then SABC chairperson Ellen Tshabalala tells MultiChoice: "Since you have presented this condition [unencrypted access], if you can just give a day for us to bounce it to the minister of communications, because we have an unclear position on the matter':

- Then MultiChoice CEO Imtiaz Patel reveals that MultiChoice and the SABC previously wanted to do an agreement in terms of Olympic Games broadcast coverage: "'Unfortunately your previous board, its easy to ... we can rubbish them now, they’re gone. But they didn't sign the agreement unfortunately".

- The then SABC CEO Lulama Mokhobo is clearly hungering after the premium type pay-TV channel content for the SABC that is available to DStv's pay-TV subscribers. 
She tells Imtiaz Patel: "It will be good for us to get PBS [public broadcasting system] type content, something like the History Channel, Discovery Channel - those kinds of channels, the ones that really talk to us". 

- Jimi Matthews to MultiChoice deadpans on getting the SABC News channel up and running: "I engage with the bureaucracy of this place [SABC]'.
The then SABC CEO Lulama Mokhobo then responds: "Oh, Jimmy."

- The then SABC chairperson Ellen Tshabalala: "I want to request that we keep this matter confidential" and says: "We know how print media reacts to this kind of thing".