Ruling by the Press Ombudsman
9 March 2016
This ruling is based on the written submissions of Mr Karl Blom of Webber Wentzel, on behalf of Harith General Partners (Harith), and those of Sharon Chetty, deputy editor of Business Day newspaper.
Complaint
Private equity company and authorized financial services provider Harith is complaining about a front-page article in Business Day (BD) of 20 January 2016, headlined Holomisa claims PIC funded ANC in complaint to public protector. The story also appeared on its website.
Harith complains that BD:
· unfairly targeted it, as only Harith was mentioned and Deutsche Bank was not, while the latter had also been implicated (allegedly in connection with a much larger amount);
· identified it prematurely as BD had not ascertained at the time whether the Public Protector (PP) intended to pursue the matter; and
· did not undertake any independent steps to verify and/or corroborate the allegations against the company, seemingly made by an anonymous source.
The company adds that the reportage has unnecessarily damaged its reputation and jeopardized its future.
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In some of the correspondence, much is made (from both sides) of the abortive attempt(s) to resolve the matter informally between themselves. I am not taking these arguments into account, as they cannot form part of a legitimate complaint. |
The text
The article, written by Sam Mkokeli and Natasha Marrian, said that United Democratic Movement (UDM) president Bantu Holomisa had filed a complaint with PP Thuli Madonsela, asking for an investigation into allegations that money from the Public Investment Corporation (PIC) had been channeled to the African National Congress (ANC) some weeks before. The money had allegedly been used to pay party employees’ salaries and for the ANC’s birthday celebrations.
Holomisa reportedly called on Madonsela, inter alia, to investigate a R2-million payment from a PIC account to Harith, also for the ANC’s benefit. This was one of three allegations that “could potentially explode into a scandal”.
PIC spokesman Sekgoela reportedly denied the allegations and undertook to co-operate with the PP, should the investigation take off.
Harith investor relations and communications executive Pule Molebeledi denied that the company was involved in facilitating the transfer of funds to the ANC. “We unequivocally and strongly deny that we received any money from the PIC meant for the ANC… We reserve our rights given the reputational impact such an unwarranted and false claim will have on our business,” he was quoted as saying.
The PP’s office reportedly confirmed that it had received the complaint from Holomisa, “but could not immediately confirm whether the matter would be investigated”.
Analysis
Unfairly targeted
Blom says that Holomisa, in his complaint to the PP, mentioned Deutsche Bank (in connection with an alleged payment of R40-million) before referring to Harith – yet the journalists did not mention the bank in their article (even though the amount of R40-million was mentioned).
Harith complains that this amounted to incomplete, inaccurate, unfair and unbalanced reporting – especially because the allegations against Deutsche Bank were “far more serious” than those against itself. Blom argues, “It is unclear why the Business Day seemingly elected to give Deutsche Bank the benefit of the doubt in relation to the allegations levelled against it in the PP Complaint and yet did not afford Harith the same courtesy. In Harith’s view, this disparate treatment lends credence to the argument that the Business Day deliberately and unfairly targeted Harith in the article.”
Blom also observes that BD again did not mention Deutsche Bank in a follow-up article.
Chetty denies that the newspaper targeted Harith, and replies that the:
· article clearly reflected the response of Harith’s spokesman;
· story contained the proper context within which Holomisa complained to the PP; and
· journalists did not mention Deutsche Bank because they could not contact the appropriate people at the bank for comment.
The deputy editor adds that it was the principle, and not the amount allegedly involved, that was at stake.
In its response to Chetty’s reply, Harith stresses that other newspapers did manage to get comment from Deutsche Bank, and that BD again did not mention the bank in its follow-up article.
My considerations
Like Harith, I find it strange that BD did not mention Deutsche Bank in its follow-up article. However, I have to confine myself to the article that is the subject of the complaint.
Even if it is true that BD could not get hold of the right people at Deutsche Bank (I have no reason to believe that the newspaper did not make the attempt – even while other publications succeeded in doing so), an argument could be made that this should have been stated in the story. Be that as it may, it is not for Harith to complain about this issue, nor is it for me to adjudicate a matter that is not before me (Deutsche Bank did not complain).
Therefore, I have no proper ground to decide that BD has favoured Deutsche Bank over Harith, or that it has targeted the latter.
The question, however, of whether the article should have mentioned Harith at all is a separate one – which will be discussed below.
Prematurely mentioned
The article stated that the PP:
· had not, at the time of publication, decided whether it would investigate Holomisa’s complaint; and
· normally does an internal assessment before making an announcement on the investigation of a complaint.
Harith complains that, based on the above, it was “wholly premature” for BD to publish its name in connection with Holomisa’s allegations, which were serious.
Blom submits, “This conduct [by BD] … is akin, in the criminal context, to the publication of the name and identity of a suspect prior to that suspect being formally charged in court – an issue which was dealt with and settled by the Supreme Court of Appeal in Independent Newspapers Holdings Ltd and Other v Suliman [2004] 3 All SA 137 (SCA) (‘the Suliman case’)”.
He explains as follows:
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Mr Walleed Suliman sued the Cape Times for alleging that he had been arrested in connection with the bombing of Planet Hollywood restaurant at the V&A Waterfront in Cape Town. He was subsequently released and cleared of all charges. The court held that although it was true that Suliman had been arrested, it was generally not in the public interest to name a suspect before he had appeared in court and had been charged. (However, he says there are exceptions to this principle – for example, when it is necessary to name a person in order to warn the public about that person or when the person holds high public office.) In particular, he cites Judge R. M. Marais (on behalf of the majority of the bench in this case) as follows:
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With the above in mind, Blom argues there was no public interest in identifying Harith prior to the PP’s decision on whether or not to pursue the complaint.
Chetty denies that it was premature to mention Harith’s name, as it was contained in an official document. She adds that the response from the PP was “standard” and that it did not lessen the gravity of the allegations against Harith.
The deputy editor also says that the matter was not a criminal one, and argues that the “imperatives” (on a newspaper) are different in cases where Chapter 9 institutions are concerned. She argues, “It is the norm to report on official complaints to statutory bodies … as they are of public interest because the role of these bodies is to support and strengthen constitutional democracy. Criminal cases are different and therefore the rules restricting reporting do not apply in this instance.”
Harith replies that even a mere allegation of corruption and impropriety, especially in the South African context, is prima facie defamatory and can have significant ramifications for the person or entity at the sharp end of such allegations. Blom submits, “In relation to the allegations in the article, it is Harith’s submission that, in the context of the article as a whole, the overwhelming impression that a reasonable reader of the article would form is that Harith is a corrupt company that conducts its business in an unethical and unlawful manner.”
Blom admits that the complaint before the PP is not a criminal prosecution initiated by the National Prosecuting Authority – yet “the substance of the allegation … suggest criminal behaviour or conduct on the part of Harith”. He argues, “The harm contemplated in the Suliman case – that an individual's reputation will be harmed when associated with criminal allegations – is the same harm suffered by Harith in this matter. It is, with respect, inaccurate to suggest that the Suliman case finds no application in the present matter.”
My considerations
A newspaper is justified to report on all complaints lodged with the PP (given the public interest in such matters). It does not matter whether or not the PP has decided to pursue a complaint – the mere fact that it has been lodged is newsworthy (especially when the complaint comes from a Member of Parliament).
The question, though, is whether it was premature for BD to mention Harith either before the PP’s decision on pursuing the matter, or before the company has had an opportunity to defend itself.
In criminal cases, I accept that an accused may not be identified before he or she has appeared in court. The essence of this matter therefore firstly boils down to the following question: Is the difference between a criminal court and a Chapter Nine institution material enough to apply the same yardstick to cases pertaining to the latter? (There is another vital issue at stake, as can be seen from my argument below.)
Chetty’s response does not clarify matters. Her statements that Harith’s name was contained in an official document, and that criminal cases are different from those before Chapter Nine institutions (and that the rules restricting reporting therefore do not apply in this instance) are just that – statements. She presents them without any argument to back them up; she does not say why the rules of criminal court reporting do not apply here (save for a general statement about the strengthening of constitutional democracy).
As far as I know, it is the first time that this office has had to deal with this specific issue; I am therefore well aware that my ruling on this point will set a precedent (unless, of course, it is overturned by this office’s Appeals Panel).
After much thought, I have decided not to obtain legal opinion on this matter as this office is an institution of ethics, and not of law. I shall therefore apply ethical arguments in my consideration of this matter (without, of course, ignoring legal precedents that may have an impact on the matter).
While it is accurate that Harith was mentioned in the document, my first question in this regard is one of fairness. It is possible that the PP may not investigate the matter at all – and even if it does, that it might find for Harith. In that case, BD would unnecessarily have cast doubt on the company’s reputation. This is the same argument, at least from an ethical perspective, on why the media is restricted from prematurely identifying a suspect’s name (in a criminal court case).
I therefore do not think the mentioning of Harith’s name was particularly fair to the company, which also implies that the company’s reputation may have been tarnished unnecessarily.
However, that is not the end of the matter. I now need to move on to the other principle mentioned above – freedom of speech – and weigh that up against the possibility that Harith’s identification may unnecessarily have harmed the company.
I am fully aware of the fact that no freedom should exist without responsibility, which means that all arguments do not by default fly out the window once “freedom of speech” enters the front door. But still, it remains a central pillar, not only of South Africa’s Constitution, but also of the Code of Ethics and Conduct (in particular, see the Preamble to the Code, and also consider the spirit of the document).
The central question now becomes this: Which weighs heaviest in this case – unfairness to Harith, or the public’s right to know about complaints to the PP?
Having weighed and counterweighed this issue for quite some time, I came to believe that the public’s right to know outweighs the damage that may have been done to Harith’s reputation (I say “may”, because it remains possible that the PP may investigate this matter and find against the company).
Anonymous source; independent verification
The article said that Holomisa lodged the PP complaint pursuant to information he received from an anonymous source.
Blom points out that Section 11.2 of the Press Code warns against the use of, and reliance on, anonymous sources (unless there is no other way of dealing with the story) and states that the media should take care to corroborate information provided by anonymous sources.
He says, “[However,] the article is silent on the issue of whether any investigative steps were taken by the Business Day to corroborate the information obtained by Mr Holomisa from his anonymous source and merely states that [he] ‘was confident about the process he went through in gathering and verifying the preliminary information that convinced him of the need to rope in the public protector’.”
In fact, he states, the article merely repeated Holomisa’s allegations – without any suggestion or hint of any journalistic or editorial investigation into the allegations. “It was wholly unacceptable … to publish the allegations … without it having taken the necessary steps to verify and/or investigate [them]. This conduct … smacks of lazy journalism and is patently against the principle set out in section 11.1 of the Press Code. It is such conduct that calls into question the integrity of our media and that ought to consequently, be rebuked by the Press Ombudsman.”
He adds that Section 1.7 of the Press Code requires proper verification which, in this case, has not happened. “This is particularly problematic if one considers the fact that Mr Holomisa is the leader of a political party that is in direction opposition to the ANC. This fact should have prompted the Business Day to exercise greater care in dealing with Mr Holomisa and the allegations made by [him] … and should have alerted the Business Day to the need to independently verify the accuracy of the allegations.”
Chetty replies that Holomisa’s complaint was an official one, lodged by a Member of Parliament, and argues that there was therefore no obligation on the newspaper to verify the veracity of the allegations contained in his document. She says the mere fact that there was such a complaint was newsworthy – and BD’s task was to report that fact accurately (which it did). Moreover, the story reflected Holomisa’s allegations as allegations, and did not present them as fact.
The deputy editor also argues that, strictly speaking, the source for the article was not anonymous, as that person was Holomisa himself. “Our writers spoke to him to verify if he indeed lodged the complaint. His sources were anonymous but he assured our writers that he was confident that the allegations had merit… Business Day itself did not conduct a separate investigation and at no stage presented the information as if we had.”
Blom responds that Harith was not afforded a reasonable opportunity to produce evidence to dispute the allegations in Holomisa’s complaint. “Put differently, while the Business Day was more than willing to apply the principles of fairness to Deutsche Bank, it (through its failure to properly engage Harith on the allegations) failed to afford the same courtesy to Harith.”
He adds that Harith accepts that, had the allegations made against it been shown to be true by BD, there would have been a legitimate public interest in publishing the allegations. “However, this was not the case. The Business Day admits that it took no steps to independently investigate the claims made against Harith. It simply repeated the allegations made by Mr Holomisa and now seeks to rely on the argument that it did not present the allegations as facts – and therefore did not need to satisfy itself with regard to the truthfulness thereof. This argument made by the Business Day does not in any way detract from the impression that was created by the article (i.e. that Harith is a corrupt entity). This sting continues to remain in the minds of reasonable readers.”
He submits that it is unacceptable for the media to be allowed to hide behind the notion of “only having made an allegation … without any form of independent verification of those serious allegations”.
He continues, “This is particularly unacceptable in circumstances where commercial interests (including the ability to continue effectively conducting business) are at stake – as is now the case with Harith. The media should not be allowed to gamble with the reputations of persons and entities in this fashion.”
Blom adds it can never be that a journalist’s obligation, in matters such as this, is to provide a mere summary and replication of allegations made by an opposition politician to the PP – a newspaper should be different from a public bulletin board. “What the Business Day did in this case was to publish hearsay statements without any interrogation of those statements…” – it merely took Holomisa at his word and seemingly took no steps to interrogate the credibility of the anonymous source and/or the information provided by the anonymous source.
He concludes that, in this case, BD merely outsourced its editorial obligations to Holomisa and exercised no independent thought or editorial control in this process. He adds that this is particularly alarming, given that Holomisa is a member of a political party in opposition to the ANC (the party to which Harith is alleged to have facilitated the transfer of payments).
My considerations
While the use of an anonymous source should be limited as much as possible, the Code does not prohibit this practice altogether.
Moreover, a publication is not supposed to do the investigation that may land on the PP’s desk. I do not think I need to belabour this point any further (as it speaks for itself).
Reputation damaged; future jeopardized
Harith complains that the reportage has unnecessarily damaged its reputation and jeopardized its future. It says when the journalists approached Harith for comment, the company made it clear that such unwarranted allegations could have a material impact on its business.
Blom explains that, if Harith is perceived as being untrustworthy, unethical and/or corrupt, it will be hard-pressed to find any investor or sponsor. “Moreover, any allegations that call into question Harith’s ethics and/or integrity could also have an impact on, and ultimately jeopardise, [its] ability to maintain its registration (with the Financial Services Board) as an authorised financial services provider. Accordingly, any allegations of impropriety on the part of Harith are likely to have a significant impact on [its] ability to continue conducting its business.”
In later correspondence, Harith says a key component of the harm suffered is that it has been associated with criminal activity as a direct result of BD’s conduct, despite the fact that no formal investigation has been initiated by the PP.
My considerations
Having decided that the public interest in this case outweighs possible unfairness to Harith, it follows that I need to dismiss this part of the complaint as well.
Finding
The complaint is dismissed.
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