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MultiChoice to open probe into ANN7 deal

MultiChoice on Friday morning said that it is aware that its deal with ANN7 has caused “real public concern”. As a result, the broadcaster’s board has instructed its audit and risk committees to probe the contract.

In a statement, MultiChoice independent nonexecutive director Don Eriksson, who chairs the board committees, said: “The MultiChoice board has read the various media reports alleging that MultiChoice has entered into an irregular relationship for the carriage of the ANN7 channel. The board is aware that the ANN7 channel has caused real public concern because of the allegations of corruption levelled at the former owners of the channel.”

ANN7 was owned by the controversial Gupta family, which has been accused of using its close association with President Jacob Zuma to win state contracts. Zuma and the Guptas have denied the allegations of “state capture”. The Guptas sold the business earlier this year to Mzawanele Manyi, a former government spokesman, in a “vendor-financed” deal.

“These allegations have negatively impacted the reputation of MultiChoice,” Eriksson said in the statement. Because of this, the board has asked the audit and risk committees to:

  • Assess whether there has been any corporate governance failures at MultiChoice and report back to the board. Based on what is contained in that report, the MultiChoice board will take the necessary action.
  • Assess whether the total amount paid to ANN7 is comparable to payments made for other locally produced channels with due consideration being given to the estimated costs of running a 24-hour news channel.
  • Draw on any expertise and skills necessary in order to fulfil the mandate given by the board.

Adv Kgomotso Moroka, one of the MultiChoice board members, has been asked to assist the audit and risk committees in their investigations.

MultiChoice and its parent, Naspers, have faced growing calls for a probe into the ANN7 deal.

Parliamentary probe

The Democratic Alliance last week called on MultiChoice to publish the contracts it entered into with the Gupta-owned 24-hour news channel ANN7 along with the record of negotiations with the channel.

The party wants parliament to probe the deal, said the party’s spokeswoman on communications, Phumzile Van Damme.

The DA’s requests come after News24 reported that MultiChoice made a “questionable payment” of R25m to ANN7 and increased its annual payment to ANN7 from R50m to R141m. The payments were revealed in the so-called “Gupta Leaks” e-mails.

“The payments came after the family seemingly assisted former communications minister Faith Muthambi in getting President Jacob Zuma to transfer certain broadcasting powers to her, something MultiChoice was lobbying the minister for,” News24 reported.

“Following the transfer of powers, Muthambi controversially pushed through a decision in favour of unencrypted set-top boxes, which benefitted MultiChoice.”

MultiChoice has denied any link between Muthambi’s decision in its favour and the payments to ANN7. — (c) 2017 NewsCentral Media

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