Multichoice in South Africa STB scandal

South Africa’s pay-TV broadcaster Multichoice, owned by giant conglomerate Naspers, is facing allegations of being linked to local corruption claims between a TV channel, the immensely powerful Gupta family and the country’s former Minister of Communications, Mrs Faith Muthambi.

The channel is ANN7, described by most local observers as a highly partisan News broadcaster and backed by the Gupta family. A series of leaked e-mails are alleged to show that Multichoice paid millions in bribes to ANN7 with the allegation that the payments were to influence the then Minister to use her influence over the use of unencrypted set-top boxes for the country’s digital TV service, and which would protect Multichoice’s pay-TV position.

Multichoice has firmly denied any wrongdoing and dismissed the allegations, saying its actions have always been above board.

However, South Africa’s opposition political parties, themselves keen to tarnish President Jacob Zuma for his links to the Gupta family, are piling on the pressure.  The two leading opposition parties are calling for Multichoice to disclose the full nature of its relationship with ANN7, the former Minister and the Gupta family in what they allege to have been underhanded dealings by MultiChoice in a bid to maintain its dominance within the country’s pay-TV market.

A special South African communications committee is now calling for a formal parliamentary inquiry into the events.

Multichoice, in a statement, said: “While we understand that some people may not be aware of it, it is standard practice to pay for mainstream news channels – particularly for local 24-hour news channels. The fee structure for the ANN7 contract is in line with the costs of developing and running such a channel, and ANN7 is definitely not the highest-paid local news channel on the DStv platform. The Rand 25 million fee referred to in the articles is also not unusual.”

One of the leaked e-mails seems to suggest that Multichoice increased its payments to ANN7 from Rand 50 million to Rand 141 million.

Multichoice insists on the integrity of its conduct.

“MultiChoice has no knowledge whatsoever of the Minister sending our proposals to any other person, and can in no way be held responsible for that. There is absolutely no relationship between our interaction with the Minister, the channel supply agreement for ANN7, and any fees or increase in fees paid for that channel,” added the company’s spokesperson.

The Gupta family sold their interest in ANN7 earlier this year to a business owned by the former government spokesman.

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