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Naspers not concerned about MultiChoice allegations

Even though MultiChoice now pays more for ANN7 than eNCA.

Naspers and its executives continue to ignore allegations that pay-tv subsidiary MultiChoice used its influence over the SABC to improperly affect the direction of government policy with respect to digital migration and the adoption of encrypted set-top boxes.

Naspers reported interim results on Wednesday for the period ending September 2017 and had ample opportunity to address the allegations in the presentation of its financial results. But neither chairman Koos Bekker nor CEO Bob van Dijk were willing to engage on the matter, this despite Van Dijk sitting on the board of MultiChoice. Neither was the issue addressed in an earnings call with the investment community on Thursday.

Listen to the podcast: State capture allegations are MultiChoice’s problem , not Naspers

The allegations made in the media included a copy of minutes of a meeting held between MultiChoice and the SABC in 2013, which appeared to show MultiChoice CEO Imtiaz Patel stating that the deal, which would see MultiChoice pay the SABC more than R100 million per year to include the SABC News Channel on the MultiChoice bouquet, would hinge on government pursuing a non-encrypted set-top box policy. Patel described the issue as a “deal breaker”.

Moneyweb has made repeated attempts to get comment from MultiChoice, Naspers and Koos Bekker on the matter, with no success.

Read: Koos the dragon-slayer

Finally, after an entire week of silence from the company, MultiChoice issued a statement in which it quoted MultiChoice chairman Nolo Letele saying: I attended that meeting – it was certainly not secret and there is nothing illegal or improper in those minutes.”

Read: No secret clandestine meeting, says MultiChoice

The company in and of itself did not deny the allegations. Instead it chose to address inaccuracies reported in the media and the selective reference to the minutes.

Why did it take so long to issue this? Why has Naspers and MultiChoice not made Imtiaz Patel and Koos Bekker available to discuss and refute the allegations given its explosive nature and highly disparaging implications for the company?

There are material risks the company now faces. For starters, its business in South Africa is regulated. Whether it continues to operate under license could come under immense pressure should serious wrongdoing be revealed. Secondly, as a company, Naspers trades in the over-the-counter market in the United States and has recently listed more American Depositary Receipts (ADRs – a share instrument) in London, possibly opening itself up to investigation by the Serious Fraud Office and the US Department of Justice. It’s one thing dealing with an inept local prosecuting agency, it might be something else if it’s the FBI.

So much for the good news – MultiChoice now pays more for ANN7 than eNCA

Over the past few weeks it became apparent that MultiChoice increased ANN7’s initial annual R50 million per annum license fee to R141 million, in addition to a once-off R25 million.

Similarly, MultiChoice paid R100 million per annum for the SABC news channel.

Spare a thought for eMedia, the company that owns eNCA and eTV. In eMedia’s latest intermin results to the end of September, the company saw profits plummet by R103.5 million to R1.9 million. eMedia attributes this drop to “the renegotiated DStv contract, which showed a significant decline in the license fee revenue the group receives from MultiChoice for the supply of eNCA and five other channels.”

eMedia also states that eNCA performed well during the period and states that it was the most-watched 24-hour news channel on DStv with an approximate market share of 50%. But, despite this, the license fee for the group was reduced from R267 million to R140.8 million for the six-month period.

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Looks dodgy! Hopefully the truth all comes out in wash – just like all the other government corruption that’s taken place.

OK, so if they are not concerned, do they want us to punish the company until they are concerned? Already stopped my Showmax subscription, must I stop my more profitable DSTV one as well Naspers?

Not sure they really care about the profitability of Dstv when Tencent accounts for 130% of the value of Naspers. All they now really care about is probably the FBI.

There’s a migration to Netflix and Amazon Primevideo taking place, which is in an embryonic phase.

All it takes is for the likes of Netflix or Primevideo to start bidding for live sports events, and we’d start seeing a greater exodus from DSTV.

There’s technical issues and Netflix/Primevideo haven’t expressed any appetite for that yet; but there’s a good chance that it’s the way things are heading.

Indeed, Naspers does not need to worry. Corruption and underhand tactics is not a big deal for the big-shots in SA. If Naspers wanted to compete in a first world economy, however, they would handle this matter very seriously and act swiftly.

Of course they aren’t worried. They’ll just pay their proxies at ANN7 and the SABC to arrange with their government friends to make it go away.

However, when a change of government happens, they should be very concerned.

That arrogance displayed by Koos Bekker and his cronies is going to come back and bite them in the butt. It was that exact same arrogance that the Gupta’s showed us South Africans. And where has that gotten them.
In my circle of friends about 45% have already ditched DSTV for Netflix and Amazon. I am about 2 weeks away from my fibre being connected and then – bye bye DSTV and your arrogance!!!!

I was trying to think of any way that I am paying money towards Naspers.

The only one that I have *occasionally* at the moment is Takealot.

Given how many of their “deals” have been shown up by other shops as being higher than prices in normal retailers (e.g. Exclusive Books cheaper by 20% for 5 books that I bought recently!!) I’ll be dropping them completely pretty soon.

#NotMyBusiness

Koos and Bob are impervious, or so they think. They should consider the message they are sending their many senior and not so senior managers – – – – it is ok to stuff up and do stuff that borders on potential criminal or at least questionable – nothing will happen to you because your BIG BOSSES are above this.

Watch this space.

The next disciplinary inquiry – – the defence should remember this

From all I have read they are concerned but are at this stage leaving it to the board of Multichoice to resolve. And what’s wrong about that?

We have to many reporters these days who seem not to focus on the facts but to try and fabricate sensation. Really, Naspers not concerned about Multichoice allegations… Waiting for the day that a reporter is taken on by way of legal action in personal capacity for loss of earnings.

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