Minutes of a high-level 2013 meeting between South African Broadcasting Corporation (SABC) executives and MultiChoice suggest the Naspers pay-TV subsidiary tried to use a R500m payment for an SABC news channel as cover to secure influence over government policy on encryption.
Analysts said MultiChoice saw encryption as a threat to its dominance of the pay-TV market and the company was determined to reverse government policy and ensure set-top boxes were not encrypted.
MultiChoice’s South African operations generate hefty and much-needed cash flows for Naspers. At the time of the meeting the government’s policy was to back encryption.
The release of the minutes has fuelled growing calls for a probe into MultiChoice’s relationship with ANN7 and the national broadcaster.
"If MultiChoice says there is nothing untoward in its relationship with the two television stations then it must come clean and show us all the documents," said Phumzile van Damme, the DA shadow minister of communications, who has called for an inquiry by the Independent Communications Authority of SA (Icasa).
"Icasa must subpoena all the documents and come to a conclusion, because what we have in front of us right now is very, very worrying."
The minutes form part of documents provided by the SABC in December 2016 to the parliamentary ad hoc committee looking into the SABC.
Van Damme said they support recent media allegations that MultiChoice paid Gupta-owned ANN7 millions in exchange for similar influence over the government’s position on set-top boxes.
"It speaks to a company willing to stop at nothing, including paying kickbacks to the Gupta family, thus supporting state capture, in order to get its way."
The minutes call into question MultiChoice’s recent protestations that its substantial payment to ANN7 for access to its 24-hour news channel was not an unusual action.
During the June 2013 meeting with SABC executives, including then CEO Lulama Mokhobo, Ellen Tshabalala, Hlaudi Motsoeneng and Jimi Matthews, MultiChoice CEO Imtiaz Patel said, "We would not normally pay for a news channel … our understanding is the SABC requires a new revenue source … we want to have a deeper relationship with you … how do we find each other … often in finding each other you need an excuse. OK, so the excuse is the proposal we put on the table."
Patel goes on to say MultiChoice also needed to provide its board with an excuse to justify paying SABC R100m a year.
For the MultiChoice board, the excuse was the news channel and the SABC archives, as well as settling the issue of conditional access.
However, Motsoeneng then told the meeting that encryption was no longer an issue. "As far as I’m concerned this is not an issue anymore," he said, adding that the Department of Communications was going to review the policy.
Within weeks of this meeting then communications minister Dina Pule was replaced by Yunus Carrim, who pushed for the encryption policy agreed by the ANC.
Within 12 months Carrim was dropped from the Cabinet and replaced by Faith Muthambi, who promptly ignored ANC policy and went the unencrypted route favoured by MultiChoice.
On Wednesday Carrim told Business Day the agreement had been concluded shortly before he was appointed. At the time he did not object in principle to an agreement between the SABC and MultiChoice but did object to the requirement that the SABC change its policy on encryption.
"It meant that MultiChoice was seeking to change government policy to serve its own interests," he said.
Naspers and MultiChoice waged a "ferocious campaign" against the Cabinet’s position, Carrim said. "We felt it was wrong for a private company to seek to buy government policy in this way so that it could retain its 98% dominance of the pay-TV sector," said Carrim.
Naspers did not respond to a request for comment.
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