Ruling by the Press Ombudsman and a Panel of Adjudicators
21 November 2014
This ruling is based on the written submissions of Mr Saleem Ebrahim, legal counsel for Mr Edrees Ahmed Hathurani, and those of Susan Smuts, legal editor of the Sunday Times newspaper, as well as on a hearing that was held on 4 November 2014 in Johannesburg. Present at the meeting were the complainant Hathurani, Ebrahim and Mr. Imran Khan, spokesperson for Hathurani. Legal counsel for the Sunday Times, Mr Eric van den Berg, Susan Smuts, and the reporter Asha Speckman represented the newspaper. The members of the Panel of Adjudicators who assisted me were Mahmood Sanglay (press representative) and Philip van der Merwe (public representative).
COMPLAINT
Hathurani is complaining about three articles in the Sunday Times: Business Times. These articles are:
His main complaint is that the following statements are false:
He also complains that the:
THE TEXTS
The first story, written by Speckman, said: “Dawood Seedat, the former finance boss of the Financial Services Board (FSB) now implicated in a web of bribery and corruption, claims he is the victim of threats and intimidation by cash-and-carry tycoon Edrees Hathurani.” She added that Hathurani had a long-running battle with SARS, which claims the former “cheated it [out] of tax for decades” (SARS wanting more than R1-bn from him).
The second article, authored by Rob Rose, argued that Seedat had resigned due to his relationship with the “shady” Hathurani. He also referred to the “battle” between Hathurani and SARS, and mentioned a figure of R1-bn in this regard.
The third article (also by Rose) said that Hathurani may expect to be arrested soon. The reporter calls him a tax dodger who admitted paying a R12-million bribe to Seedat, in order to make a R1-bn tax problem “disappear”
CORRESPONDENCE PRIOR TO THE HEARING
The main complaint
Facts misrepresented
Hathurani argues that he has no outstanding tax problems (there was a written agreement to this effect), that there was never any cancellation of an agreement due to non-disclosure (he made the last payment on or about March 2014, in terms of the agreement), that he was never ordered to pay R580.2-m in back taxes, nor was he ever the subject of any further tax enquiry, and that he is not and has never been a director/shareholder of Africa Cash and Carry (Pty) Ltd (the current tax assessment is on that company, and not on him).
Smuts replies as follows:
|
She accepts that Hathurani and SARS had an agreement in respect of his personal taxes. She points out that the story said that his company had a long-running battle with SARS – “We did not deal with Mr Hathurani's personal taxes in the story. While we may not have explicitly stated that the paragraphs relating to Mr Hathurani's tax bill related to his business and not to his personal taxes, we submit that there no reasonable readers would have taken the rather drastic leap to think that we had switched our attention from his business affairs to his personal affairs.” Pretisha Khoosal (a SARS auditor who has been involved in auditing Africa Cash and Carry since 2007) stated in her affidavit that Hathurani's family trust was a shareholder in Africa Cash and Carry as well as in Jumbo Cash and Carry, which was part of his tax dispute in the 2010 matter.
A document submitted by Hathurani does not assist him as it does not deal with his company's tax bill of more than R1-billion, which is still current and in the process of being dealt with in court. The tax agreement of November 2011 deals only with the years of assessment 1994 and 1998. Also, it was entered into after the Receiver had obtained a judgment against Hathurani for R580-million. The agreement arose after he had failed to prove an agreement to settle his tax liability for less than R580-million. A settlement agreement dated 12 April 2007 (case number 76878/2010) was not just between Africa Cash and Carry, but also between various taxpayers including Hathurani. The Court papers demonstrate how the affairs of Africa Cash and Carry and Hathurani are interlinked. Accordingly, the November 2011 agreement is no basis for making the bald statement that Hathurani has no tax problems. Clearly from the November 2011 agreement Hathurani’s tax affairs were not in order and he was being accommodated by SARS to get his tax affairs in order. From the documentation uplifted from various Court applications neither Africa Cash and Carry nor Hathurani’s affairs up to the period 2007 were in order. The papers demonstrate tax evasion on a grand scale. It is also not clear whether Hathurani has other years of assessment outstanding. SARS may not comment on this aspect as taxpayers’ affairs are confidential in terms of the income tax legislation. Also: · The judgment in case number 76878/2010 is clear in respect of the liability for R580-million; · In respect of Error! Reference source not found., Pretisha Khoosal states under oath in the answering affidavit in case number 76878/2010 that the agreement relied upon by Hathurani (the April 2007 agreement) had been cancelled due to his failure to make full disclosure. (See paragraphs 34, 35 and 36 of the affidavit.) In addition: 1.1 Other newspapers referred to Hathurani as the CEO; 1.2 Hathurani has never complained that he was not the CEO, and has chosen not to correct anyone else on this issue; 1.3 The High Court judgment (referred to earlier) describes how he ran Jumbo, had a huge tax bill and then had an interest in Africa Cash and Carry; 1.4 The Court papers show that Hathurani’s family trust has an interest in Africa Cash and Carry. Either the family trust purchased the shares from one of the shareholders (with assets donated to it by him) or he donated his shareholding to the trust. It is common cause that Hathurani is a trustee of the family trust, and that the trust operates for the benefit of his wife and children; and 1.5 The affidavits dealing with the ooplang scheme implicate Hathurani in the running of the business (“ooplang” is when money has been moved before it has been declared to SARS). In light of these submissions and particularly the CIPRO records, the denial is surprising. The only criticism might be that in the final paragraph there is some confusion about whether it deals with Hathurani’s tax affairs or those of Africa Cash and Carry. “In our view this is not a breach of the Press Code.” |
The rest of the complaint
Deliberately ignoring relevant documents
Hathurani complains that Speckman only mentioned the 2007 “agreement”, but neglected to take cognizance of the 2011 settlement.
Biased source
Hathurani complains that the newspaper relied on a source with a monetary interest in the matter. He says he gave Speckman this information a day after publication.
The newspaper says its source was “well-placed”, and his/her information was credible.
No verification prior to publication
Ebrahim says that he invited Speckman to his offices on 20 June, two days prior to publication – an invitation that she declined. She then misrepresented the facts, “despite the fact that we afforded her the unconditional opportunity of verifying her information as well as an opportunity of perusing the various relevant documents at my offices”. He argues: “[Speckman] chose not to verify facts which any reasonable journalist would have done, and instead chose to publish a grossly inaccurate article.”
In his articles, Rose “chose to rely on Ms Speckman’s article without verifying the information”.
Mistakes not promptly corrected
Ebrahim says that Speckman visited him the day after publication, and that she was then informed that her information was inaccurate. He says that the reporter acknowledged the statement that Hathurani had outstanding tax problems was incorrect. She “conceded to me that her article was incorrect and undertook to publish an apology and a retraction of every incorrect fact that was published in the very next edition. This promise was never kept by her.” Therefore, the newspaper did not promptly correct mistakes that had been brought to its attention and that it promised to rectify.
Defamation
Hathurani says the inaccuracies amounted to defamation and that they “have had the deliberate effect of causing [him] and his family unnecessary harm”.
Rose’s articles
Hathurani complains that Rose’s articles are “yet again completely inaccurate for the same reasons [already] mentioned”.
Smuts replies that if her submissions on the main story are accepted, there can be no complaint about Rose’s columns “which clearly constitute protected (fair) comment”.
AT THE HEARING
Hathurani, Ebrahim
The gist of the complaint, as explained by Ebrahim, was that the:
Van den Berg, Smuts
Van den Berg emphasised that the story had been based on Seedat’s affidavit, and that the latter had been the centre of the story, and not Hathurani – the story mentioned him only at the beginning and the very end.
He referred the panel to Khoosal’s answering affidavit (as documented above), as well as to Hathurani’s founding affidavit, and said: “These documents all show that Hathurani was part and parcel of ACC.”
With regards to the headline (which called Hathurani a tax dodger), Van den Berg said that Hathurani’s tax affairs between 1983 and 1998 were not in order, and that an amount of R200-m was “moved” without proper authority.
Smuts objected that this specific issue had not been mentioned in the complaint, and that the newspaper therefore did not have a fair chance to defend itself against it.
Van den Berg also argued that Hathurani/Ebrahim did not mention a settlement to Speckman which had “superseded” the “agreement” made in 2007.
He admitted that the reference in the story to “his (Hathurani’s) company” did imply ownership, and also accepted that Hathurani was not the CEO of ACC.
The panel’s considerations
Firstly, the matter of Hathurani having been described as a “tax dodger”: This issue may have been implied in the part of the complaint referring to “defamation”, but it was never explicitly stated as such. Following a debate on this matter the panel believes that, due to the complicated nature of this statement, it would be unfair to the newspaper to expect it to defend itself on this issue without proper time to prepare its defense.
We accept, as indeed the newspaper did, that the following statements were false:
|
The journalist, Asha Speckman, testified that it did not know about the 2011 settlement. Speckman admitted that, if she had known about it, she would have worded the story differently. The question is: Whose fault was it that she was unaware of this settlement? Speckman sent her questions to Hathurani/Ebrahim only on the Friday, one day before deadline. This resulted in neither of them having had enough time to respond adequately. We note that Ebrahim invited the journalist to his office – but that she was not able to find the time prior to publication (she only went to his office a day after the story appeared). Having perused the content of Speckman’s e-mail to Ebrahim, the panel cannot blame the latter for not informing her about the 2011 settlement – she did not refer to any agreement, and Ebrahim was not to know that the reporter was unaware of the 2011 development. On the other hand, we can also not expect the reporter to ask questions about a matter outside her knowledge. We therefore do not believe that the reporter “deliberately” ignored “relevant documents”. Ultimately, however, the panel believes that Speckman, in the absence of a considered response by either Ebrahim or Hathurani and an open invitation to visit the former in his office, should have waited for such a response before publishing. The mere fact that the reporter communicated with Ebrahim shortly before deadline, does not by default imply that she acted in either the letter or the spirit of the Press Code. Ebrahim responded to the journalist’s questions just over an hour later, saying that Hathurani did not want to compromise the integrity of the investigations that were underway, and that he therefore did not want to comment. “[Suffice it] to say that all the allegations are vehemently denied…” |
The panel cannot make any finding in the matter of the source with an alleged monetary interest in the matter, as we do not know the identity of this person.
The hearing heard contradictory evidence about whether Speckman had promised Ebrahim to correct her mistakes. Be that as it may, no journalist has the mandate to give such an undertaking – that is the sole prerogative of the editor.
Finally, the panel accepts that the following statements did unnecessarily tarnish Hathurani’s reputation and dignity: That he “has” a long-running battle with SARS, that the latter cancelled the 2007 “agreement” with Hathurani due to non-disclosure and that he was ordered to pay R580.2-m in back taxes
FINDING
The story incorrectly said that:
This is in breach of Section 2.1 of the Press Code that states: “The press shall take care to report news truthfully, accurately and fairly.”
After having asked Ebrahim relatively late and after having received an invitation to visit him to discuss relevant issues, Speckman should not have rushed into print without information that may have been imparted by the former. This is in breach of Section 2.5 of the Code that says: “A publication shall seek the views of the subject of critical reportage in advance of publication…”
The above resulted in a breach of Section 4.7 of the Code, that reads: “The press shall exercise care and consideration in matters involving dignity and reputation. The dignity or reputation of an individual should be overridden only by a legitimate public interest and in the following circumstances:
4.7.1 The facts reported are true or substantially true; or
4.7.2 The article amounts to fair comment based on facts that are adequately referred to and that are true or substantially true; or
4.7.3 The report amounts to a fair and accurate report of court proceedings, Parliamentary proceedings or the proceedings of any quasi-judicial tribunal or forum; or
4.7.4 It was reasonable for the article to be published because it was prepared in accordance with acceptable principles of journalistic conduct and in the public interest.
(Sections 4.7.1, 4.7.2 and 4.7.4 have not been adhered to in this case – Section 4.7.3 is not applicable here.
|
The complaints that the newspaper had deliberately ignored relevant documents, and that it did not promptly correct mistakes brought to its attention, having promised to rectify such mistakes, are dismissed.
|
SANCTION
Sunday Times is directed to apologise on its front page (Business Times) to Hathurani for incorrectly stating that:
This apology should include a reference to unnecessary harm caused by the story to his dignity and reputation.
The newspaper is reprimanded for:
In accordance with a decision by the Press Council, as recommended by Sanef, the panel asks the newspaper to prepare such a text prior to publication. Please add to the text: “Visit www.presscouncil.org.za for the full finding.”
|
Section 5.5 of the Complaints Procedures reads: “At the conclusion of a hearing, and after a Panel has reached a decision, both parties shall be entitled to address the Panel, personally or in writing, on sanctions and where appropriate mitigation.” Either party may do so within three working days of receipt of this decision. Please note that this is not an application for leave to appeal – that is a separate process, as explained below. |
APPEAL
Our Complaints Procedures lay down that within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Adjudication Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.
Mahmood Sanglay (press representative)
Philip van der Merwe (public representative)
Johan Retief (press ombudsman)