StratCol Ltd vs. Moneyweb

Mon, Apr 7, 2014

Ruling by the Press Ombudsman and a Panel of Adjudicators

7 April 2014

This ruling is based on written submissions by Mr Hennie Heymans, CEO of StratCol Ltd, and Julius Cobbett, financial journalist contracted by Moneyweb, as well as on a hearing that was held on 26 March 2014 in Johannesburg. Heymans was accompanied by Christine Marincowitz and Ineke Heymans; Moneyweb was represented by its editor, Ryk van Niekerk, and the journalist Julius Cobbett. The two members of the Panel of Adjudicators who assisted me were Henry Jeffreys (press representative) and Peter Mann (public representative).

SECTION 1: PRIOR TO THE HEARING

COMPLAINT

Heymans complains about a story published on Moneyweb on 5 February 2014, headlined: ‘I lost R33 000 to dodgy debit orders’ – businessman.

He complains that:

despite Moneyweb’s admission that it had contravened the Press Code (with a subsequent apology and retraction) in similar articles published in 2013, it again chose to isolate and sensationalise an issue without obtaining and reporting on all the related facts;
although the actions that led to the complaint happened between 2004 and 2012, Moneyweb linked StratCol to these actions – without allowing it to comment on this matter;
these “actions” are still in dispute and under investigation, yet the journalist accepted one party’s version of events (that of Mr Koos Smit), while inaccurately referencing StratCol as a party that was directly involved in the dispute about alleged wrongdoing (resulting in defamatory statements by members of the public as well as by Moneyweb); and
the story was out of context and sensationalised, as it referred to unrelated events in the past, focused only on one aspect that had contributed to the dispute, and failed to point out that StratCol was not directly involved in the dispute (let alone being guilty of any “shenanigans”).

THE TEXT

The story, written by Julius Cobbett, reported Port Nolloth businessman Koos Smit as saying he had lost more than R30 000 to dodgy debit orders that had been paid to Platinum Credit Card Corporation (PC3). The journalist wrote: “When it comes to disputed debit orders, PC3’s track record is worse than most…” and “Despite its poor track record, PC3 remains a client of debit-order company StratCol. This grants it access to the banking system through StratCol’s sponsor bank Absa.”

THE PARTIES’ ARGUMENTS

StratCol

StratCol elaborates on its complaint as summarized above. Heymans says that he discussed the complexity of the debit order industry and its inherent problems with Moneyweb in detail – yet it nevertheless decided to publish the story in dispute.

He also questions the statement in the story that StratCol had a poor track record. “Poor in comparison to what, we ask?” He reminds Moneyweb that the last time it had compared StratCol to a competitor, it had to concede that this comparison was not based on fact “and therefore you contravened the press code and had to apologise”. He adds that it is irresponsible to make comparisons until comparable data are available.

In addition to his complaint that Moneyweb did not contact StratCol for comment, Heymans says that the former also did not bother to contact the Payments Association of South Africa (PASA), or (as far as he knows) any of the banks for their input. He says that StratCol offered to clarify matters, answer legitimate questions and cooperate in any related investigations “and yet, we were not contacted for comment or input in this article”.

Heymans challenges Moneyweb to investigate when last his company processed transactions on the PC3 book “and then show us the relevance of your reference to StratCol in this article”.

He adds:

In order to present a balanced view, the article should have referred to StratCol’s advocacy “and the leading role it is playing to eradicate unlawful debt”;
Despite the fact that StratCol invited Moneyweb to verify this claim with companies, it had failed to do so, and had also failed to notify readers of this “positive development”;
Despite insinuations that StratCol was aiding PC3 in conducting fraudulent business practices, no such evidence has been brought to his attention; and
Moneyweb should publically distance itself from defamatory tweets or comments posted.

Heymans concludes: “The knock-on effect of this type of reporting is that every time the publication incites doubt about the debit order industry, there is a rise in the incidence of libelous comments (such as… ‘ABSA are pigs’).” This also leads to businesses not being paid the debit orders that are legally due to them. By “callously” associating StratCol to words like “rogue” and “dodgy”, Moneyweb has caused “incalculable damage” to its brand.

Moneyweb (Cobbett)

Cobbett emphasises that the article was primarily focused on a dispute between Smit and PC3.

He also denies any bias on his part. “The article specifically states that the question of authorization (to debit his account) boils down to Smit’s word against PC3’s.” The reporter says that, if the article appeared to accept Smit’s version of events, it was only because PC3 failed to explain what value it provided in exchange for the debits, and why his account was debited haphazardly (as many as 13 times in one month).

Cobbett says the article made it clear that it was Smit who used the word “dodgy”. However, he argues that this allegation was not without substance.

Regarding the complaint that he did not ask relevant parties for comment, Cobbett says that:

he did give PC3 ample opportunity to respond to Smit’s allegations – the response by PC3 general manager Johrika Burger to questions posed by Smit’s daughter-in-law (received on 25 October 2013) was incorporated in his story;
there was a link where people could download Burger’s response in its entirety;
the article also included the response by PC3’s legal representative (Mr Pieter Venter) regarding the accuracy of a spreadsheet summarizing debits made on Smit’s account;
he sent a draft article to PC3 on January 23 with an invitation to comment and to correct possible factual errors – he received a reply on January 30, which he incorporated in his text; and
he emailed his draft article to PC3, after which he amended his text in certain respects.

He concludes that he made every effort to obtain PC3’s views, and states that he did include these in his article.

To this, the reporter adds that he:

previously sought StratCol’s comment, as well as that of PC3 and Absa – which he duly included in a story (published on 3 September 2013); and
also asked PASA for its views, as well as various banks for their views (about debit orders). However, his article primarily focused on a dispute between Smit and PC3 – it was not intended to zoom in on broad trends and statistics within the payment industry, which is why he did not ask PASA and the banks for comment on those issues.

Furthermore, Cobbett argues that the reference to PC3’s poor track record was to its “past unflattering media coverage” (he mentions several examples) – and concludes that his article drew no comparisons at all.

Regarding the reference to StratCol as a party to the alleged wrongdoings, he says:

The article only once mentioned this company (“Despite its poor track record, PC3 remains a client of debit-order company StratCol”);
StratCol does not dispute the accuracy of this statement; and
StratCol, who acts as an intermediary between Absa and PC3, has a duty to ensure that debits processed are legitimate.

The journalist also denies that Moneyweb “repeatedly” breaches the Press Code. It did apologise to StratCol in 2013, but this was unrelated to his article.

In conclusion, he says that Moneyweb reacts to all complaints about online comments and takes appropriate steps (if necessary). In this particular case, Moneyweb has already removed the offending comment.

StratCol’s response to Moneyweb’s reply

In general, Heymans says that:

the public immediately reacted negatively to StratCol after Cobbett’s article, despite his “attempts to downplay his actions” – resulting in further defamatory comments relating to his company;
Moneyweb deleted such a comment only after receiving a complaint about it; and
not all negative comments have been removed.

He also asks: If the article focused only on a dispute between Smit and PC3, why then refer to StratCol at all? And why suggest that the company was complicit in a “dodgy” business?

Heymans adds that Moneyweb has previously apologized (on 12 September 2013) for a similar insinuation, based on insufficient information (that StraCol’s standards were allegedly lower because users could access bank accounts via the company’s platform) – yet a similar statement was now published without clarification, based on old, insufficient and unsubstantiated information, and without giving StratCol an opportunity to respond.

More specifically, he argues that:

the amount of R2 654.45 mentioned in the article as having been deducted from Smit’s account in December 2012, amounted to 8% of the R33 000 emphasised in the headline as “dodgy”. Obviously, he states, legitimate alternatives such as the collecting of arrears payments were deliberately ignored;
Cobbett’s statement (in his response to the complaint) that PC3’s actions were indeed dodgy, was speculation without the backing of a single fact (he says his sources were other journalists and members of the public, and not courts of law or PASA);
the journalist relied on articles by other journalists (and on his own articles) while these were all based on allegations without the backing of facts;
the reporter’s denial that he drew any comparisons is meaningless – what other grammatical meaning can “worse than most” have?
StratCol has not processed any transactions on the PC3 book since October 2013 (the story stated that PC3 remained a client of StratCol) – yet Cobbett failed to verify this fact;
the statement that StratCol would submit any transaction to Absa if sent in by PC3 was untrue; and
Cobbett only contacted PASA shortly before publication, and then ignored some of the information given to him.

SECTION 2: AT THE HEARING

The only references in the story to Stratcol were the following sentences: “Despite its poor track record, PC3 remains a client of debit-order company Stratcol. This grants it access to the banking system through Stratcol’s sponsor bank Absa.”

The panel noted that the gist of the complaint was that Cobbett did not ask Stratcol for comment, and that neglect caused the company’s reputation unnecessary harm.

At the heart of this matter is Section 2.5 of the Press Code, which reads: “A publication shall seek the views of the subject of critical reportage in advance of publication; provided that this need not be done where the publication has reasonable grounds for believing that by doing so it would be prevented from publishing the report or where evidence might be destroyed or sources intimidated. Reasonable time should be afforded the subject for a response. If the publication is unable to obtain such comment, this shall be stated in the report.”

The question before the Ombudsman and the Panel was if the references to Stratcol made the company the “subject of critical reportage”, in terms of section 2.5 or not?

The Panel views the reference to “critical reportage” in section 2.5 of the Press Code in two possible lights. One is “critical reportage” – meant in the sense of “serious” or “investigative” reporting. The second interpretation is reportage which is “critical” of the subject being reported on, which implies some sort of negative suggestion towards its public image or reputation.

The panel interpreted this phrase to imply the latter.

At the hearing there was a long debate about the accuracy of the sentences in question – something which Heymans did not mention in his original complaint. The panel accepted that while the text was fundamentally accurate, it did contain critical comment – and we did have a problem with the unnecessary harm that the first five words of the first sentence (“despite [PC3’s] poor track record”) caused Stratcol.

If these words had been omitted, there would have been no need to ask Stratcol for comment (as the rest of the text was common cause). Those words amount to a negative suggestion or criticism of Stratcol.

To the panel’s mind, Cobbett should either have omitted these first five words, or he should have asked Stratcol for comment if he decided to include it. He did neither of the two. The panel was puzzled as to why the journalist did not take the trouble to ask Heymans for his opinion on this matter.

The need to ask Stratcol for comment was even more urgent, given the history between Moneyweb and the company (which was less than healthy, to say the least).

The fact that the story was mainly about PC3, that Moneyweb at least three times asked PC3 for comment, and that the latter did not object to the sentences that were in dispute at the hearing, did not release the publication of its obligation to ask Stratcol for its comments as well. The panel noted Cobbett’s argument that Moneyweb had asked Stratcol for its views six months prior to publication. However, this was not reflected in the article (and even if it was, it would not have sufficed due to the long time that has expired between the enquiry and the publication of the article).

In a nutshell: The story, which was about PC3, placed Stratcol in a negative context, – which made it the subject of critical reportage, which in turn meant that Moneyweb should have asked Heymans for comment (as required by Section 2.5 of the Press Code).

The failure to ask Stratcol for comment resulted in Cobbett not exercising “care and consideration in matters involving…reputation” (Section 4.2 of the Press Code).

The panel then turned its attention to the question of intent: Why did Cobbett find it necessary to put Stratcol in a negative light? At the hearing, he explained that he simply wanted to express the fact that PC3 had access to bank accounts through Stratcol – but he could have done so without the use of the first five words of his first sentence?

Heymans accused Cobbett of malice (understood as the deliberate attempt to harm somebody) and put forward several examples of why he did so.. After much debate, the panel decided that we did not have enough evidence to endorse this accusation.

In summary: Because the reference to Stratcol was (rightly or wrongly) cast in a negative light due to the first five words of the sentence in dispute, Cobbett should have asked the company for comment – failing which the article unnecessarily tainted Stratcol’s reputation.

FINDING

Moneyweb was in breach of following sections of the Press Code:

2.5: “A publication shall seek the views of the subject of critical reportage in advance of publication…”; and
4.2: “The press shall exercise care and consideration in matters involving…reputation.”

SANCTION

Moneweb is directed to apologise to Stratcol for not:

asking the company, which was the subject of critical reportage, for comment; and
exercising care and consideration in matters involving its reputation.

Moneyweb is also directed to:

delete the first five words of the first sentence in dispute in its article; and
publish the South African Press Council logo on its front or landing page, with the words “Press Council orders Moneyweb to apologise to Stracol”, with a link to the text below.

Beginning of text

In a story published on 5 February 2014, headlined ‘I lost R33 000 to dodgy debit orders’ – businessman, Julius Cobbett reported that Port Nolloth businessman Koos Smit claimed he had lost more than R30 000 to dodgy debit orders that had been paid to Platinum Credit Card Corporation (PC3). We added: “Despite its poor track record, PC3 remains a client of debit-order company Stratcol. This grants it access to the banking system through Stratcol’s sponsor bank Absa.”

StratCol CEO Hennie Heymans lodged a complaint with the Press Ombudsman about these statements, who held a hearing on March 26.

The Adjudication Panel said that the use of the words “despite its poor track record” placed Stratcol in a negative context – which made it the subject of critical reportage, which in turn meant that we should have asked Heymans for comment (as required by Section 2.5 of the Press Code).

The neglect to do so resulted in us not exercising “care and consideration in matters involving…reputation” (Section 4.2 of the Press Code).

We apologise for not asking Heymans or Stratcol for comment, and for the unnecessary harm that this may have caused the reputation of this company.

Visit www.presscouncil.org.za for the full finding.

End of text

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.

Henry Jeffreys (Press representative)

Peter Mann (Public representative)

Johan Retief (Press Ombudsman)