Ruling by the Press Ombudsman
9 July 2015
This ruling is based on the written submissions of Mr M.P. van der Merwe on behalf of the Gupta family, and those of Abdul Milazi, editor of the Sunday World newspaper.
Complaint
The Gupta family is complaining about an article on page 4 in Sunday World of 28 June 2015, headlined Guptas in TV license war – ANN7 owners ‘ask’ for preferential treatment in bidding.
The family complains the story incorrectly stated that:
· Infinity Media was a Gupta company;
· it had asked for a postponement from Icasa to submit its application;
· they had met with one of Icasa’s councilors, Ms Nomvuyiso Batji; and
· its application had deliberately been kept secret.
They add that the journalist did not verify his information.
The text
The story, written by Aubrey Mthombeni, said that Infinity Media, a company it said was owned by Pres Jacob Zuma’s family friends, the Gupta family, would battle it out with three other media companies for a new free-to-air TV license.
The journalist reported, “Icasa had extended its deadline for applications from December 1 to March 31, allegedly to accommodate the Guptas, whose application was not ready. The postponement allegedly came after the Guptas summoned … Batji to their office in Midrand to ask for more time so they could also apply.”
Mthombeni also wrote that an official working at The New Age (TNA, owned by the Guptas) revealed that the Gupta application had been kept a secret from the company.
Analysis
The Guptas’ company
The story called Infinity Media “the Guptas’ company”.
The family says this is incorrect as it owns only 35% of Infinity Media.
Milazi says ownership through a partnership still constitutes ownership. “Individual members/shareholders in a partnership are technically and legally owners (both as individuals and as a collective).”
My considerations
An internet research revealed that Infinity Media Networks is owned jointly by Essel Media (35%), Oakbay Investments, the Gupta family’s investment vehicle (35%), Mabengela Investments (21%) and a further 9% that has been reserved for staff and management. Shareholders of Mabengela Investments include Rajesh Kumar Gupta (25%), Aerohaven Trading (15%), Fidelity Investments (10%), Mfazi Investments (3%) and Ashu Chawla (2%).
I therefore asked the parties the following question: “It looks to me like the Gupta family owns 35%, and that Rajesh Gupta owns 25% of the 21% that Mabengela Investments own. This means that the Guptas own 40.25% of Infinity. Am I correct?”
Van der Merwe responded as follows:
“[Y]ou are quite correct. I would, however, like to make the following submissions.
“I submit that even if Infinity is directly / indirectly owned at 40.25% by the Gupta family, their voting power in meetings of Infinity remains 35%. The minority shareholding of Mr. R Gupta in a minority shareholder of Infinity (25% of the 21% of Mabengela) is irrelevant for purposes of the control of Infinity, as it is for practical purposes 0% when deciding on matters of Infinity. Mr. R Gupta has a minority share in Mabengela, the result of which is that he does not have control over this entity. In other words, when Mabengela has to vote at an Infinity meeting, he cannot control Mabengela’s vote.
“I further submit that, even if the above is not taken into account, if the shareholding under discussion is less than 50%, it can in any event not be said that Infinity is Gupta owned.
“Furthermore, there exists no joint ventures or partnerships or the like between any of the shareholders of Infinity or the shareholders of the shareholders of Infinity, through which the Gupta family can be said to have ownership or control of Infinity.”
If the Guptas did have a majority shareholding in Infinity, Sunday World would have been justified to call it “the Guptas’ company”. This was not the case. I therefore have little doubt that this has caused the Guptas some unnecessary harm.
Asked for postponement
The sentences in dispute read, “Icasa had extended its deadline for applications from December 1 to March 31, allegedly to accommodate the Guptas, whose application was not ready. The postponement allegedly came after the Guptas summoned one of Icasa’s councillors Nomvuyiso Batji to their offices in Midrand to ask for more time so they could also apply.”
Van der Merwe says the bid under question was led by Mr Nazeem Howa, a director of Infinity, who only learnt of the delay when he arrived at Icasa to submit the application on December 1. He adds that Infinity had paid the deposit into Icasa’s bank account ahead of the deadline. “This could easily have been verified.”
Milazi notes that Icasa spokesman Paseka Maleka did confirm that the December 1 deadline had been changed “following representations and requests by various stakeholders” – but Gupta family spokesman Gary Naidoo refused to divulge who had made such a request.
Van der Merwe replies the story stated as fact that Infinity’s application was not ready to meet the December 1 deadline. Then it used this “untruth” to allege that the reason for the extension of the deadline was to accommodate the Guptas. This, and the reference to the alleged meeting with Batji, created the impression that the family had engaged in irregular activities to gain an unfair advantage.
My considerations
It is not true, as Van der Merwe argues, that the story stated as fact that Infinity was not ready to meet the deadline – in both sentences the word “allegedly” was used. An allegation cannot be interpreted as fact.
On the other hand, the editor’s argument is weak. He admits that Naidoo did not reveal who had requested the postponement (Icasa had merely said that “various stakeholders” were involved). So, why did the story suggest that the Guptas were involved?
If that was all the newspaper had to go on, the mere use of the word “allege” was not sufficient justification to create the impression that Infinity had made the request. A newspaper should not publish an allegation just because someone has made it – it has to have enough grounds to do so.
This had the potential to unnecessarily harm the Guptas.
The sub-headline is particularly disturbing. It read, ANN7 owners ‘ask’ for preferential treatment. The use of inverted commas did not do enough to soften the potentially huge unnecessary harm that this could have caused the Guptas. Even if a headline reasonably reflects the content of the story, as prescribed by the Press Code, that headline would be unfair if it reflects an unfair story.
Meeting with Batji
The story said, “The postponement allegedly came after the Guptas summoned one of Icasa’s councillors Nomvuyiso Batji to their offices in Midrand…”
The Guptas deny that any member of their family or any member of Infinity’s management team had met with Batji.
Milazi says that Maleka’s response related to official and not private meetings, “[a]nd our inquiry …was about an alleged informal meeting, not an official Icasa scheduled meeting”.
Van der Merwe replies, “No meeting, whether official or not, was ever held upon the insistence of the Gupta family. It remains the responsibility of the newspaper to verify the facts. It failed to do so. [The Gupta family] did inform the journalist that his information was flawed.”
My considerations
The issue of whether the alleged meeting was official or informal is neither here nor there. The story stated the meeting as fact – and Milazi merely mentions the newspaper’s inquiry into the matter. I need evidence that this meeting took place (especially because it was stated as fact) – evidence that was not forthcoming in the newspaper’s reply to the complaint.
This had the potential of being unnecessarily harmful to the Guptas.
Keeping it secret
The relevant parts in the story read, “An official who works at TNA media in Midrand revealed the application had been kept a secret from the company…”; and, “One of the sources pointed out that by virtue of the Guptas owning a newspaper, they were not supposed to be considered for the free-to-air TV licence (because it was against Section 66 of the Electronic Communications Act of 2005.”
Van der Merwe says these statements created the innuendo that the Guptas had kept Infinity’s connection with TNA secret – and that the purpose of this secrecy was to hide its connection with TNA.
He says that Infinity’s bid documents contained the relationship with TNA – there was no intention to keep it secret. He adds, “Due to the competitive nature of the process, the team preparing the bid worked under strict confidentiality. There was no reason to involve The New Age as Mr. Howa is a director of both The New Age and Infinity. It is incorrect to cast aspersions about the reason for the confidentiality.”
Milazi denies that the story:
· said Infinity had conspired to hide its relationship with TNA, nor was it implied. He says the paragraphs that may have confused Van der Merwe referred to sources reportedly saying that, by virtue of the particular relationship or ownership of a newspaper, Infinity was automatically disqualified from bidding. “Then the following two paragraphs are direct quotations from the Electronic Communications Act, to give context to the statement”; and
· cast aspersions on whatever confidentiality there was about Infinity’s bid. “The article merely mentioned the relevant Section 66 of the Electronics Communications Act.”
My considerations
Firstly, the arguments on the matter of secrecy are unrelated – the story reported a source who alleged that Infinity’s application was kept secret from TNA, while Van der Merwe says Infinity’s bid documents contained the relationship with TNA – a document which was directed at Icasa. There was therefore no need for me to ask for a copy of the bid documents.
In other words, even if Van der Merwe is correct (I have no reason to doubt it), the newspaper was justified to publish the opinion of its source (as the complaint did not address this aspect, I believe the newspaper had enough justification to publish).
No verification
The Guptas complain that the reporter did not verify his information.
Milazi says the reporter contacted Naidoo and forwarded questions in writing to him. “He chose to verbally attack the reporter in his response, instead of providing clarity and details, which did not assist the reporter in getting the Gupta family’s version of the issues and events.”
He adds that the journalist sent the same questions to Icasa – but Maleka, as its spokesman, merely said that all information pertaining to the bid would be published in the Government Gazette.
He concludes that the reporter did all he could to get a balanced picture of the situation. “I don’t see what more he could have done.”
Van der Merwe disputes Milazi’s statement that the reporter did “all that he could” to get a balanced picture. “For example, the reporter did not portray a balanced picture on the Electronic Communications Act issue.”
He adds that the reporter neglected to report on Section 66(6) of the Electronic Communications Act, “which allows for exemptions from the limitations provided for by section 66”. Read in context, the reporter clearly omitted this particular section “[s]o that the reasonable reader could not make any other deduction than that the Gupta family conspired to hide Infinity’s connection with TNA”.
Van der Merwe also denies that Naidoo verbally attacked the journalist. He says this statement was “opportunistic” and concludes that Milazi’s response did not adequately answer the complaint.
My considerations
The journalist did send detailed questions to TNA. I agree with Milazi that the journalist did all he could to verify his facts. The reporter cannot be blamed for the short answer he got.
The matter of the alleged verbal attack was not published and therefore falls outside the scope of my mandate.
Out of bounds
In his response to the newspaper’s reply, Van der Merwe refers to Pres Jacob Zuma and to Section 66(6) of the Electronic Communications Act of 2005.
I cannot entertain these issues as they were not part of the complaint – and Milazi never had an opportunity to respond to them.
Finding
The Guptas’ company
The labelling of Infinity as “the Guptas’ company” was incorrect and unfair, and it had the potential of being unnecessarily harmful to the family. 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.”
Asked for postponement
Sunday World did not have sufficient justification to create the impression that Infinity had requested a postponement. This was unfair and had the potential of being unnecessarily harmful to the Gupta family. It was therefore in breach of Section 2.1 of the Press Code: “The press shall take care to report news… fairly.”
The sub-heading is also in breach of Section 2.1 of the Press Code.
Meeting with Batji
The newspaper did not have sufficient justification to state the meeting with Batji as a fact. This was unfair and had the potential of being unnecessarily harmful to the Gupta family. It was therefore in breach of Section 2.1 of the Press Code.
Keeping it secret
This part of the complaint is dismissed.
No verification
This part of the complaint is dismissed.
Seriousness of breaches
Under the headline Hierarchy of sanctions, Section 8 of our Complaints Procedures distinguishes between minor breaches (Tier 1), serious breaches (Tier 2) and serious misconduct (Tier 3).
The breaches of the Press Code as described above were serious as they had the potential to unnecessarily harm the Guptas. They are both Tier 2 offences.
Sanction
Sunday World is directed to apologise on page 4, above the fold, to the Gupta family for creating – without sufficient justification – the unfair and potentially unnecessary harmful impression that Infinity:
· was Gupta-owned;
· had requested a postponement for the deadline; and
· had met with Batji (in order to gain unfair advantage).
The newspaper should also apologise for the sub-heading, for the same reasons.
If the story was published on its website, the apology should appear there as well.
The text should be prepared by the newspaper and approved by me, with input from the Gupta family. It should start with the apology, and end with the words, “Visit www.presscouncil.org.za for the full finding.”
The headline should reflect the content of the text. A heading such as “Matter of Fact”, or something similar, is not acceptable.
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 Appeals Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.
Johan Retief
Press Ombudsman