MultiChoice in a mess after revelations of questionable ‘’pay-for-play’’ deals with the Guptas


THUR, NOVEMBER 30 2017-theG&BJournal-Top executives of the pay-TV company that operates a near monopoly in Nigeria, MultiChoice, has in the past couple of days, been enmeshed in one of the biggest corruption scandal in South Africa’s corporate history.

The troubles began following revelations by investigative journalists in the country that the company, the owners of DStv and M-Net, paid millions of Rands to the Gupta family and a host of other individuals.

The revelations appeared in a Paper known as the GuptaLeaks, akin to the Panama Papers. It showed that the pay-TV company made a questionable R25m to the Guptas’ controversial ANN7 channel and in addition increased its annual payment to ANN7 from R50m to R141m under clandestine circumstances.

ANN7 is South Africa’s third 24-hr news channel that was sold for RR450m in August this year to Jimmy Manyi, the owner of Lodidox. The channel broadcast DStv satellite television service.

The GuptaLeaks revealed that the payments came after the family seemingly assisted former communications minister Faith Muthambi in getting President Jacob Zuma to transfer certain broadcasting powers to her, something the Leaks say MultiChoice was lobbying the minister for. The GuptaLeaks also showed that after the transfer of broadcasting powers, Muthambi controversially pushed through a decision in favour of unencrypted set-boxes, which benefitted MultiChoice, in clear violation of the ANC policy on encryption-required for pay TVs, to promote competition in the sector.

MultiChoice in a statement rejected insinuations of wrong-doing saying that there is no relationship between the policy outcomes in favour and payment made to ANN7. But the GuptaLeaks detailed how Multichoice executive Clarissa Mack sent policy documents to Muthambi who in turn shared them with a top Gupta aide, Ashu Chawla. The document set out proposals for Zuma to transfer broadcasting power back to Muthambi after he split the communications portfolio into two departments in 2014.

The Leaks showed that in September 2015, just six months after Muthambi told the nation there would be no encryption, MultiChoice increased its annual payments to Guptas’ controversial ANN7 channel from R50m to R141m “at a time when the channel had failed to win a significant slice of DStv’s new audience, and whilst the channel received widespread criticism over quality of its content.”

The leaks were exposed in between the more than 200,000 emails that have become known as the #GuptaLeaks.

South Africa media report that after a lengthy court battle, the country’s constitutional Court earlier this year ruled that it was within Muthambi’s right to make policy decisions affecting the broadcasting sector.

MultiChoice has faced a fair deal of criticism in Nigeria where many view it as a monopoly over-looked by the country’s sector regulators. In April 2017, Nigeria’s member of the Federal House of Representative directed its committee on Information, National Orientation, Ethics and Values to investigate what it deemed ‘exorbitant charges’ and refusal of MultiChoice to adopt ‘Pay-As-You Go package option.

The company is known to arbitrarily increase the price of its packages almost on a yearly basis without recourse to due process and regulators seem helpless. In 2013, the monthly subscription increased by 7% to 10%, in 2014, it increased by 10% to 15%, in 2015, it went up further by 12% to 22%. In April 2017, another increase was forced on subscribers across the bouquet ranging from 10% to 22%.

DCSL 90X780