Lodged by: Mr Sam Buthelezi
Article: Inquiry into missing R87m retirement funds stalls as more money ‘disappears’.
Date: 15 September 2011
Respondent: Cape Times
Mr Sam Buthelezi complains about a story in the Cape Times, published on 1 August, 2011 and headlined Inquiry into missing R87m retirement funds stalls as more money ‘disappears’.
Buthelezi complains that:
• the Trilinear Group of companies was not asked to comment or verify;
• R10.7 million was not missing;
• the confusion of the Trilinear group of Companies with the Trilinear Empowerment Trust (and with Canyon Springs Investment) falsely leads to the insinuation that Trilinear has misappropriated funds; and
• the headline is misleading.
The story, written by Louise Flanagan, says that the liquidation inquiry into Canyon Springs Investment 12 that took R87 million in textile workers’ retirement funds has stalled because more money went missing. Flanagan quotes Cape Town lawyer Barnabas Xulu saying that “there should have been R10.7m in the Trilinear Empowerment Fund account…but Trilinear had told him that it was gone.” Trilinear reportedly refused to comment. The story also says that Trilinear had “loaned” Canyon Springs R87 million on the basis of a verbal agreement that “seems to have been illegal and was not paid back”.
I shall now look at the merits of the complaint:
Not asked to comment or verify
The story says that Trilinear “has refused to comment on the missing money”.
Buthelezi complains that no commentary was sought from the Trilinear Group of Companies. He adds: “We believe that the journalist was irresponsible to accept Mr Xulu’s version as the sum total of the truth without seeking commentary.” He also says that, if Flanagan had asked for comment, she would have understood that the R10.7 million was not missing. He adds that stating that Trilinear has refused to comment did not absolve the journalist from seeking comment.
Flanagan replies that Buthelezi has previously made it clear that he would not comment on this issue. She says that:
• she spoke telephonically to him on May 25, when he refused to respond on the record to questions and asked for questions to be emailed;
• she then emailed him questions;
• his lawyer (Mr GD Solomons) later told her that no comment would be forthcoming;
• she told Buthelezi’s lawyers that, if the position changes, to please let her know (still on May 25);
• on June 8 she asked Buthelezi in an email for comment, but his lawyer (this time Mr Chris Briston) “responded with threats of action”;
• on June 9 she sent another email with further questions to both Buthelezi and Briston;
• she did not receive any response and in fact was told telephonically by Briston that there would be no response; and
• on July 26 Buthelezi wrote to her, saying: “Do not write any emails back, I will not respond at all”.
She concludes that, on the basis of the above, she did not ask Buthelezi for further comment for the story in dispute. She explains: “It is unreasonable to make a point of refusing to talk to a reporter and then complaining that your views on accuracy were not heard.” She adds: “If he changed his mind, then he should have contacted me…directly as soon as he saw the article and offered his comment.”
Flanagan argues that Xulu is a lawyer acting in the matter and argues that there is nothing irresponsible about using him as a source.
Buthelezi replies that Flanagan has not provided evidence that she approached him or the Trilinear group regarding the R10.7 million, “the same query that we accepted questions for and gave concrete answers to other journalists”. He argues that, as a result of this, there is a “huge contrast” between Flanagan’s story and one published by the Mail & Guardian.
That may be the case, but note that, after Flanagan has been turned down several times, Buthelezi wrote his (crystal clear) July 26 email to her – less than one week before the publication of the story in dispute. This left her with no way of knowing that he was willing to respond to the allegation that R10.7 million was missing.
His eventual words “I will not respond at all”, following other turndowns, came over as so categorical and final that it would be unfair of me to have expected of her to contact Buthelezi again.
I can only express the wish that the working relationship between Buthelezi and Flanagan will improve – in the interest of transparency and the free flow of information.
R10.7 million not missing
Buthelezi complains that it is not true that R10.7 million was missing.
Flanagan responds that it is insufficient to simply deny this, and asks that, if the money is not missing, why was it not available to fund the liquidation hearing? And why was the hearing postponed indefinitely?
Buthelezi replies that just because he abides “by FAIS rules and refuse to divulge information without written consent from our client does not mean that the funds are missing”.
Firstly, the story attributes the reference to R10.7 million to a source. Flanagan wrote that Xulu had said that Trilinear had told him this money was “gone”. The story continues: “ ‘It (the R10.7 million) has disappeared,’ Xulu said.”
This makes the reportage reasonable – Xulu had a right to say what he reportedly said and the newspaper had a right to publish that statement.
But that is not the end of the matter. A few sentences later the story states, as a fact (this time without attribution), that “the money disappeared”.
It is not clear from the story to which amount this “money” that “disappeared” refers to – it could be the R87 million, or the R10.7 million, or both.
Flanagan indicated that this money refers to the R87 million.
If that is true, it should be noted that the complaint is not about the R87 million, but about the R10.7 million.
However, if readers would interpret that phrase as referring to the R10.7 million, as I did (because that amount is much closer to the phrase than the earlier mentioned R87 million), I had to satisfy myself that the reportage was fair and reasonable, based on the information at her disposal.
That is exactly what I did.
Note that this is not a conclusion that the R10.7 million has indeed disappeared – all I am saying is that Flanagan was justified in her reportage on this matter.
Confusing Trilinear leading to false insinuation of misappropriating funds
Buthelezi complains that the story wrongly assumes that Canyon Springs and matters relating to the Trust are one and the same. He says that the assumption of missing funds relating to Canyon Springs “is unrelated to the missing funds within the Trust itself” and that the Canyon Springs liquidation is a “completely separate matter”.
He adds: “By not clarifying this matter the journalist continues to conflate the Trilinear group of Companies with the Trilinear Empowerment Trust.” He explains that the latter is a separate entity with its own board of trustees, and adds: “It is misleading to not clarify which ‘Trilinear’ she refers to as Mr Xulu represents the Trilinear Empowerment Trust.”
He also complains that this confusion has led to the “inaccurate and grossly damaging” allegation that Trilinear has misappropriated Client Funds.
Flanagan says that Buthelezi is the chairman of the Trilinear group and the sole director of all but one of the companies in the group; he is also listed with the Financial Services Board (FSB) as part of one of the two Trilinear businesses which are registered with the board.
She notes that his letterhead on the complaint to our office refers to “Trilinear”, and argues that any of the Trilinear businesses or the trust could be implied.
Flanagan also says that Buthelezi is implicated in the apparently illegal moving of the R87 million to Canyon Springs and benefitting from this personally to a total of R20.8 million, explaining that he is the sole director of Trilinear Specialised Finance which got this money as “fees”.
She continues: “Buthelezi, on behalf of both the Trilinear companies and the trust, authorized the loan, resulting in the disappearance of the money through Canyon Springs.” She argues that any confusion is a direct result of Trilinear’s and Buthelezi’s behaviour and that “it would have helped” if he responded to her questions.
Flanagan concludes that the matters are not “unrelated” as everything relates to the disappearance of R87 million and states that Buthelezi has not offered any indication why he thinks they are not related.
The story says the following: “Trilinear…‘loaned’ Canyon Springs about R87m.” As Buthelezi does not deny this statement, I cannot find that Trilinear and Canyon Springs are unrelated.
Flanagan’s argument (mentioned above) is reasonable – the Trilinear group of companies and the Trilinear Empowerment Fund seem to be tightly inter-linked. Moreover, Buthelezi did not point me to a specific sentence or phrase where the journalist allegedly confused these matters. I also take into account that the only time that the story mentions Trilinear Empowerment Fund is in a direct quote.
The headline reads: Inquiry into missing R87m retirement funds stalls as more money ‘disappears’.
Buthelezi complains that this is misleading as he denies that money has “disappeared”.
The newspaper denies that there is anything wrong with the headline and argues that Buthelezi has not offered any coherent explanation of why he regards it as inaccurate.
Art. 5.1 of the Press Code states: “Headlines…shall give a reasonable reflection of the contents of the report…in question.”
This is exactly what the headline does.
The complaint is dismissed in its entirety.
There is no sanction.
Please note that our Complaints Procedures lay down that within seven days of receipt of this decision, anyone of the parties may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Ralph Zulman, fully setting out the grounds of appeal. He can be contacted at Khanyi@ombudsman.org.za.
Deputy Press Ombudsman