Moretele Local Municipality vs. City Press


Mon, Aug 6, 2018

Ruling by the Press Ombud

3 August 2018

PARTICULARS

 

Lodged by

 

 

Ms Serrah Vilane, Acting CFO, Moretele Local Municipality

 

 

Date of article

 

 

13 May 2018

 

Headline

 

 

VBS saga could sink 15 councils – Municipalities unlikely to recover millions in operating revenue from the doomed bank

 

 

Page

 

 

2

 

Author of article

 

 

Sipho Masondo

 

Respondent

 

 

Dumisane Lubisi, editor

Complaint                                            

Asking for a retraction and an apology, Vilane complains that the newspaper:

·         incorrectly reported that the Moretele Local Municipality has invested R70-million, while the correct amount was R50-million; and

·         did not give the municipality a right of reply. 

The text

The article said fears had been mounting that up to 15 municipalities could collapse because they were not likely to recover their R1.5-billion investments at VBS Mutual Bank.

The text itself did not mention Moretele Local Municipality, but a chart detailing figures for some municipalities did. It showed “exposure” up to 21 February 2018 as R70 447 439; “annual operating revenue” as R391 859 000; and the “% annual revenue” as 17.98.

The arguments

Lubisi says that the:

·         story was based on a document that had been published by National Treasury and forwarded to all municipalities (which indicated that, at the end of February 2018, Moretele’s exposure to VBS was R70.44-million); and

·         newspaper had approached the municipality with a list of questions, sent to spokesperson Mothupi Molebye, on the Thursday before the story was published. 

This correspondence, dated May 10, read:

Dear Mothupi,

We are writing a story about municipalities which had invested in VBS. According to information we have received from Treasury, by the end of February this year, the Moretele Local Municipality had invested about R70 million at VBS. Will you kindly respond to the following questions:

  1. Did council pass a resolution for the money to be invested at VBS?
  2. If yes, when was such a resolution passed?
  3. Will you send us a copy of the said resolution?
  4. Did the council source quotations from all other banks before investing at VBS?
  5. If yes, kindly provide us with proof of the quotations you had received from other banks.
  6. You invested R70 million at VBS. Do you have any other short term investments with other banks?
  7. If yes, what are the names of those banks and how much have you invested in them?
  8. Treasury has said that all the banks which invested at VBS are unlikely to get their monies back. How do you intend recovering the money from VBS?
  9.  The money was meant for service delivery. How will its absence impact on your ability to deliver services?
  10. Information received by City Press suggests that municipalities in Limpopo were forced by the ANC’s Treasurer in Limpopo (Danny Msiza) to invest at VBS. At any point in time, did senior politicians at the council and Danny Msiza ever discuss the possibility of council investing at VBS? Did Danny Msiza force the council to invest at VBS?
  11. Do you consider your investment at VBS to have been a wise investment decision?
  12. At some point in August last year, Treasury had informed municipalities that they are not allowed to invest in Mutual Banks. Why did council not withdraw all its investments from VBS forthwith?

Kindly respond by 3pm tomorrow afternoon (Friday, May 11).

Vilane replies that this response from City Press does not indicate or share the link for the data which they are referring to. “I can however confirm that the data is not correct. I am attaching proof of investment and balance with VBS and the letter from the municipality to National Treasury confirming what was invested,” she adds.

Secondly, Vilani says the media should source information from the Accounting Officer/ Municipal Manager in terms of the Municipals Systems Act. “There is no indication that the journalist confirmed receipt of such an e-mail or if the journalist diligently followed up on the matter by phone,” she submits.

Analysis

I wrote the following email to Lubisi:

“In your response to the complaint … you state that the:

·         story was based on documents which had been published by National Treasury. Kindly supply me with these documents; and

·         journalist asked ‘a Mr Mothupu Molebye’ for comment. Please inform why this person was contacted, and in which capacity he was expected to respond.”

The editor duly sent me a copy of the relevant Treasury document, and added that Molebye was contacted in his capacity as the spokesperson for the municipality. “In fact, internet is littered with examples where he was quoted on behalf of the municipality,” he replied.

I have established that the graph in the newspaper and the one provided by Treasury are identical. Therefore, if there was a mistake in the relevant information, the municipality should take up the matter with Treasury and not with the newspaper.

Moreover, if Vilane’s argument is that the newspaper has wrongly interpreted these data, I am yet to hear such a contention.

Lubisi also provided me with copies of newspaper articles in which Molebye had been quoted as a spokesperson for the Moretele local municipality.

Based on the above, I believe that the newspaper’s reportage on this matter was in line with requirements set by the Press Code.

Finding

The complaint is dismissed.

Appeal

The 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 Ombud