With the SABC and its financial problems very much in the news at the moment I was interested to read a letter headlined “Others share blame for SABC woes” in the Mail & Guardian of May 29 2009.
The letter was published under a pseudonym, “SABC staffer — name withheld” — and suggested that despite the fact that Snuki Zikalala had contributed almost a third of the crippling debt that has paralysed the SABC — by setting up overseas news bureaux on a channel that only a few thousand people could access, which accordingly no one would advertise on and whose execrable product nobody wanted to buy — it was the SABC’s chief financial officer, Robin Nicholson, who was equally, if not more, to blame.
I have taken the liberty of reproducing the relevant section of the letter below:
“ … your interview with chief financial officer, Robin Nicholson, gave Nicholson an easy ride. You allowed him to state that negative cash flow has been aggravated by problems such as over-expenditure on foreign-programme rights but failed to ask him why this was allowed to happen once again. A decade ago Canadian consultants pointed out that the then SABC’s bankruptcy was caused largely by massive, uncontrolled expenditure on unused overseas programme purchases. This contributed greatly to the retrenchment of hundreds of staff. Instead of learning that lesson, Nicholson presided over a failed financial empire where the same thing has happened again because of poor control measures. We need to know why.
“Nicholson did not stop a repeat of his blunder. One buyer, whose extravagance is still being audited, wasted at least R49 million on programmes that were never aired.
“In a broadcast to staff, Nicholson blamed the poor financial environment for the SABC troubles. We are, however, aware of where the real problem lies. Why has the executive done nothing while the 7pm TV news’ ratings have reached rock bottom? Why has it taken the top brass four years to replace the dysfunctional newsroom server system which causes embarrassing glitches nightly? Why was a R60-million entrance built at the SABC’s administrative complex while broadcast studios were falling apart and programming staff struggled to get even basic equipment?
“And ordinary SABC staff are asked to tighten their belts and will probably forgo a salary increase, but will executives downscale their perks (like air travel, to economy class) or will the people at the bottom again be expected to make all the sacrifices as happened in the 1990s? And will Nicholson and the executive continue to get salary increases of up to 60%, as happened last year, while ordinary staff get nothing, or face losing their jobs.” SABC staffer — name withheld
Many people were aware of the allegations concerning “over-expenditure on foreign-programme rights” as a result of the Sunday Times front-page lead — “SABC boss blows millions on dud shows” — of March 22 2009. It alleged that tens of millions of rands spent on television programmes by Matilda Gaboo, the 45-year-old head of the SABC’s international programme acquisition division, had been wasted either because they had not been broadcast as a result of being unsuitable therefore or due to not being aired by the contractual deadline.
Among the allegations made by the Sunday Times is the following:
“The documents detail how Gaboo had regularly bought programmes without consulting the SABC’s various channels on whether they needed them or had time slots to flight them. Further details included her buying of 173 titles, representing thousands of episodes, which were never shown and whose licences have now expired from movies such as Austin Powers to children’s programmes like Blob Family.”
The newspaper also alleged that Gaboo:
• Awarded R22 million in deals to programme supplier Irfan Bux, a man who, according to the audit reports, claims to be the father of Gaboo’s six-year-old daughter;
• Paid Bux R652 800 for a wildlife series called Be the Creature, although he had paid just R81 600 for it; and
• Paid UK supplier Mark Deitch more than R500 000 for consulting services and then gave him a contract of R915 000 to supply 58 programmes while he worked in her office. The SABC only broadcast 12 of them, wasting R657 000 on the deal.
It also stated that Gaboo’s transactions were still being audited and that the eventual loss to the SABC — and thus taxpayer — could exceed R100 million.
According to an article in the Sowetan the investigation was apparently prompted after Gaboo allegedly dumped a bag containing R121 584 cash for business-class air tickets for a close friend, ANC treasurer-general Mathews Phosa, and her child on the desk of a travel agent
By all accounts Gaboo’s job at the SABC certainly seems to have had its perks — trips to Cannes included.
What was intriguing was the allegation in the Mail & Guardian letter by “SABC staffer” that what the Sunday Times described in an editorial as Gaboo’s “wanton wastage of taxpayer’s money” had in fact happened before and, after a little internet research proved, that the letter writer’s claim was correct.
Accordingly Nicholson needs to provide answers.
On August 13 1999 the Freedom of Expression reported on its website that:
“Mail & Guardian” reports on August 13 that allegations of corruption in commissioning procedures have been levelled against the head of the SA Broadcasting Corporation television, Molefe Mokgatle, prompting what has been described as a highly sensitive audit by firm of outside auditors. “M&G” said the SABC is trying to keep the investigation secret and no one at the corporation would confirm it officially. The newspaper said Mokgatle has not been suspended as was done last week with acting chief executive of Bop TV, Cawe Mahlati, pending investigations into allegations of mismanagement, fraud, corruption and nepotism. The specific allegations against Mokgatle have been subsumed into a general audit of all commissioning procedures. Thaninga Shope, senior manager at the SABC flatly denied that such an investigation was taking place, while Neil Harvey, chief operating officer told “M&G” that there was a general audit of all purchasing procedures at the corporation. Harvey refused to name the firm of auditors doing the work, but the “M&G” understands that the firm is KPMG. “The SABC’s commissioning process, a lucrative industry for production houses has long been dogged by controversy, with many suspicions and allegations of corruption,” reports “M&G”.
However, in April the following year the Mail&Guardian revealed that contrary to Shope’s claim, there was an investigation and she was implicated.
“One startling index to mismanagement in the corporation is offered in the extraordinary revelation that more than R350 million in television stock programmes commissioned or bought by the SABC since 1997 but never used — will have to be written off ahead of restructuring.” (my emphasis)
“This week the board made the first move in the transformational chess game when dismissing disgraced television chief Molefe Mokgatle and corporate communications head, Thaninga Shope, the governing body decreed they should be demoted to middle-management positions.
“Sources close to the process told the Mail & Guardian that, in many cases, contracts to produce these programmes had been awarded in the absence of required tender procedures. Many of these irregularities were uncovered in last year’s investigation into SABC commissioning practices by forensic auditors KPMG, where, among others, Mokgatle and Shope were implicated.
“Mokgatle and Shope are accused of depleting the SABC’s R200-million commissioning budget by over-invoicing programme distributors and flouting the broadcaster’s commissioning procedures. (my emphasis)
“Shope’s defence was that the heads of the television channels, rather than the corporation’s international programme purchasing division, should have the leeway to negotiate prices in purchasing programmes off international shelves and long as there is sufficient funds in the budget.”
“The KPMG report called for disciplinary action against Mokgatle for overspending on international programmes such as the overpriced Dream Team, a soccer programme screened on Monday nights.”
“He bought the programme at around R42000 per half-hour, instead of the normal R27 000 per hour.”
“The same report found that Shope failed to follow financial procedures with her African Renaissance projects when she was general manager at SABC2.”
“These projects include her much-publicised Meropa Fashion Collection and the Lebone Continental Fashion Show.”
“The KMPG report said at the time that their failure to obtain board approval for expenses before they were incurred constituted a transgression.”
“These revelations come at a time when the audience ratings for SABC news’ audience ratings are plummeting. For example, prime-time television English news ratings are reported to have dropped dramatically, while e-tv’s news ratings are on the rise.”
There is no indication that the SABC made any effort to recover the R350 million lost in these dubious transactions or that the matter was ever referred to the police for investigation and we are told that the “demotion to middle-management positions” involved the retention of salaries and perks and unlimited time to find other jobs.
Nicholson joined the SABC in 2001, little more than a year after the SABC suffered this massive loss. He must, therefore, have been aware of what Mokgatle and Shope had got up to and the fact that these financial losses had led to job losses yet, only a few years later, exactly the same thing seems to have happened again — this time on his watch.
The SABC staff member who wrote to the Mail & Guardian is thus entirely correct in asking for an explanation:
“You allowed him to state that negative cash flow has been aggravated by problems such as over-expenditure on foreign-programme rights but failed to ask him why this was allowed to happen once again. A decade ago Canadian consultants pointed out that the then SABC’s bankruptcy was caused largely by massive, uncontrolled expenditure on unused overseas programme purchases. This contributed greatly to the retrenchment of hundreds of staff. Instead of learning that lesson, Nicholson presided over a failed financial empire where the same thing has happened again because of poor control measures. We need to know why.”
While there is no indication on the internet of what happened to Mokgatle after he resigned from the SABC without sanction, Shope joined Nepad as its communications officer when she left the SABC.
She left Nepad on August 8 last year to join the Department of Foreign Affairs.
In similar fashion, there seems to have been no sanction against Gaboo who, with the assistance of her close friend, Mathews Phosa, seems to have become an expert not only in broadcasting purchases but also in the high-tech world of mining.
If the estimation that Gaboo’s transactions could cost the SABC as much as R100 million is correct then the combined total of the losses suffered by the South African taxpayer as the result of her activities and the activities of Mokgatle and Shope could come to almost half a billion rand — all, it would seem, without any of them having to repay a cent or face any sanction whatsoever, let alone becoming the subject of a police investigation.
Nice work if you can get it.
At a time when SABC broadcasting staff lack functioning equipment and the SABC cannot implement promised salary increases for them and at a time when allegedly Nicholson is himself under investigation for what seem to be dubious practices — he is allegedly accused in a forensic report of irregularly awarding a multimillion-rand software tender — his salary was increased by 18.4% to R3.3 million a year.
Who approved this salary increase and on what grounds?
“Why has it taken the top brass four years to decide to replace the dysfunctional newsroom server system which causes embarrassing glitches nightly?” the Mail & Guardian’s correspondent asked. Perhaps the question was prompted by the fact that Nicholson and a fellow executive, Sipho Sithole, seem to have been spending more than R2 million a month on consultants in the past year and a half — clearly because they cannot do their massively-remunerated jobs unassisted.
And, according to Beeld, “Millions of rands have been set aside by the SABC for the upgrading of its building’s foyer and the acquisition of luxury cars, while workers don’t even have proper broadcasting equipment. A senior TV news employee, who’s been with the SABC for years, said employees are particularly unhappy that ‘huge amounts of money are still being spent on luxury cars and millions on upgrading the foyer.’ Meanwhile essential broadcasting equipment is ‘in a poor condition and deteriorating quickly’.”
Nicholson, it seems, feels that he should bear none of the blame for the SABC’s current financial plight, but this Pontius Pilate approach has not impressed Wits journalism professor and one of the founders of the Mail & Guardian, Anton Harber.
In a Sunday Times editorial on March 22 2009, editor Mondli Makhanya says the SABC has become a “honey trap for the greedy” — in other words, what has happened at the SABC is exactly what has happened to SAA, the Land Bank, Robben Island and similar institutions — they have simply become a trough for the politically connected — and deployed — elite to get their snouts into.
There is a very easy way for Nicholson to absolve himself of blame, to show that such concerns do not pertain to him and that he has impeccably discharged his fiduciary duties. Any executive who feels ethically compromised by decisions taken in the organisation that employs him/her, ring fences him or herself by creating a protective paper trail, putting it in writing and making it a matter of tangible record that either they concurred with dubious decisions under duress or distancing themselves from such decisions or, at the very least, questioning them.
Can Nicholson produce such documentary proof?
If he cannot either he should reconsider his position or the powers that be should reconsider it for him.
Ah, you gotta love the SABC – if they cannot provide entertainment on their channels, at least they provide entertainment by reading about them in the papers!
So they are doing their job then!
Great Questions but sadly nothing will come of this.
I too think Mr Nicholson has some explaining to do but the attention is mostly on the board? As Chief Financial Officer, if our finances are f****d, he should be the first in line to explain why.
As usual at the SABC, the executives will move on to another high-flying, well paying job and its the regular bottom-of-the-food-chain staff who will be told to hang in there and help make it better with whoever the next board/CEO is!
Been dealing with the SABC for almost 20 years and it’s the same sh*t, different year!
i would love to see how the left explains its way out of this one.
i have several friends who work for the sabc. “demoralized” does not begin to describe the mood there. the union has every right to be recalcitrant and to work as hard as possible to not give the sabc an inch of anything. [i'm rarely pro-union in this country, so the employer must *really* have messed up.]
traps, here’s also a suggestion. i know you voted for the anc, but i think you should do a piece — or invite the m&g or the pretoria star to do a piece — on just how service delivery has been compromised by stuff like this [because pouring money into the sabc means that money is not being given out elsewhere for service delivery] and also the actions of the canned gauteng minister and how there is an established and deeply entrenched pattern of graft at the anc employment agency [because, if you pay attention to the details, gives most afro-pessimists the right to say "i told you so" and would make all but the most pollyanna-ish of afro-optimists stop and shake their heads]. cosatu wants to get rid of labor brokers, but the anc is the biggest one of them all.
Traps
Next time cut and paste something shorter!
What the SABC needs is a good CEO. The Board is mostly irrelevant.
It seem that every organization/institution in this country is involved in corruption. It is actually easier to talk about organizations where there is no corruption. One can only Cry for the beloved country. Only God can fix problem of this magnitude and if we are not prepared to pray, we will soon find ourselves below Zimbabwe
and i dont understand why matthews phosa’s name has been dragged into this.
to me, this sounds more like another boring endeavour to dent anc leaders’ name because of their of their day to day association with ordinary south africans.
please learn to write your blogs without dragging irrelevant people’s name.
Great article Traps! We’re seriously considering quitting the cartoon business to make an animated documentary about public transport in South Africa. We’re pitching the production at about R4,000,000 for the SABC less a 20% discount because nobody will be able to watch because it will never be screened. Not sure of the title yet but we’re thinking of calling the doccie ‘Gravy Train’.
@Siphiwox2: There seems to be a lot you don’t understand…
“please learn to” respond to blogs by actually commenting on the issues raised.
Mike, good one!
When the messenger puts in a request for a new bicycle, everyone in the department has an opinion or contribution to the debate. When the department heads propose spending half a billion on un-needed junk, nobody has anything to say. This truly is where the financial controller is supposed to come in. He should have experience with large purchases and be aware of the pitfalls that lie within. Unless he has covered himself with an audit trail as Traps suggests, he should be charged with fraud and embezelment.
Siphiwo Siphiwo call in your fellow ANC hackers to join you urgently.
I am verbose but this time you said it all, Traps.
AT least the news is not marching troops, waving index fingers, terrifying us and planting of trees.
Not to mention lectures on dangers of Rooi Gevaar etc.
Or is that in the pipeline?
My comment – as a pensioner with no DSTV my TV is an ornament wasting space for oxygen.
Except for eTV news at 7 pm.
With no entertainment – I spend my time annoying other bloggers and readers, free of charge or detention.
I promise to not steal a chocolate bar and be sent to prison to die at hands of our
‘protective obese police.’ (good -Rhymes with even meter.)
Rightly put by Gerry:
“Ah, you gotta love the SABC – if they cannot provide entertainment on their channels, at least they provide entertainment by reading about them in the papers!”
There is only one way to sort out the problems at the SABC. Government must accept the fact that the broadcaster is incapable of being revived and close it down.
If this were a private business it would have been liquidated years ago.
The behavior of Gaboo is alarming! Did she ever do business with women? I wonder. It’s worrying that Phosa is involved. There should be a law that says that politicians should not involve themselves in business. Conflict of interest. And yet people on the ground are starving to death and being treated as voting fodder. I hate the condescending tone that some politicians use to speak about the poor. AND NOW THIS. The whole affair is despicable!
Great one!!
Whenever politicians get involved, things fall apart. Corruption everywhere, because all the companies in SA are in alliance with politics. People have to bribe, buy and commit fraud all the time. That is just awesome, shows how poor a nation we will be, and that is going to happen sooner that we thought.
In the meantime people are paying TV licences, how sweet!
Thank you for an eye-opening article.
I’ve just noticed Matilda Gaboo rising like a phoenix from the ashes she left at the SABC. Under the wing of Mathews Phosa (who on 12 June 2009 was appointed nonexec chairperson of the board for Alt-X listed Alliance Mining Corporation Limited), Gaboo has been appointed executive director to the board. Does anyone know what her background is? Her talents are obvious. As far as stock buying tips go, I wouldn’t recommend this one.
Interestingly Molefe Mokgatle continues to feed from the BEE trough. He is a Non Executive Director at Search Partners International(headhunter) and Commercial Executive at AfriSam where he was appointed in November 2008. He is also CEO of Afrilink Pty Ltd – a BEE “investment company” No doubt he has connections. AfriSam is now a black controlled cement company when Swiss cement maker Holcim divested from South Africa in 2007. AfriSam recently recieved a R6bil. cash injection from the Public Investment Corporation who used the poor state employees’ retirement money to prop up this transaction. Rumours abound that the new shareholders have awarded themselves massive directors fees and have started the usual rackets such as “clothing allowance” claims or having to attend meetings! In the meantime Holcim is still owed the company has to scrounge and scramble to make interest payments every quarter to the bankers – and Holcim is still owed CHF270 mil! One of the new shareholders, a lady, even claimed for her expensive new undewear when attending a meeting in London last year with management to convince bankers to fund their expensive transaction. Is it just me or is the corruption and the typical cash stripping exercise at every possible opportunity now just everywhere wnen BEE schemes are implemented? Whatever happened to corporate governance? Have these people no shame? What about the 1500 employees of AfriSam who will lose their jobs once these bozos stuff it up? Oh yes, none of the shareholders or Mokgatle know anything about cement.