The SABC has confirmed that two senior executives, who have been on suspension since February, have been fired for trying to hide a multimillion-rand profit arrangement on a digital contract.
Ian Plaatjes, who has served as the broadcaster’s COO since November 2019, and head of video entertainment Merlin Naicker had their employment contracts terminated with immediate effect after a disciplinary process.
“The board has duly considered the findings and recommendations of the report by an independent chair and decided to release Mr Plaatjes from his duties as the SABC’s COO with immediate effect. The SABC can also confirm that the group executive for video entertainment, Mr Merlin Naicker, is also released from his duties with immediate effect after a disciplinary hearing,” acting SABC executive for corporate affairs and marketing Mmoni Seapolelo said.
She said the SABC would not disclose the date on which this happened or any other information about the development.
Plaatjes and Naicker were suspended in February at the same time that head of advertising sales Reginald Nxumalo resigned. This happened in the wake of their alleged failure to disclose a 7.5% profit-share deal with Discover Digital, which runs the public broadcaster’s SABC+ video streaming service.
A City Press report at that time said the suspensions were on legal advice from Werksmans law firm. An internal audit by the SABC of the secret profit-sharing deal came to the conclusion that the three executives had failed to act in the SABC’s best financial interests.
Werksmans said Plaatjes, Naicker and Nxumalo had allegedly deliberately concealed crucial information on the 7.5% profit-share agreement from the SABC’s executive committee during their presentation of the deal, before it was signed, and misled the committee when they said the public broadcaster would get 100% of the advertising revenue made through SABC+.
Werkmans found a prima facie case for gross dishonesty against all three.
City Press reported that the SABC has a R35m contract with Discovery Digital, renewable for five years, to run SABC+ as its over-the-top video streaming service.
According to Werkmans, the business plan for SABC+ that was presented to the SABC’s executive committee members during a meeting on November 7 2022 stipulated that the SABC would get 100% of the revenue generated.
The SABC was projected to initially make between R100m and R200m with SABC+.
Plaatjes, Naicker and Nxumalo signed the deal with the profit-sharing clause without authorisation from the SABC’s head of legal or the CEO at the time.
The controversial 7.5% profit-share agreement was allegedly kept secret and came to light nine days after the committee approved the proposal. The SABC’s legal division picked up and queried the appearance of the 7.5% advertising revenue-sharing clause on November 16 2022 during the contract drafting process.
Plaatjes signed the SABC+ deal with Discover Digital a day later, meaning that Discovery Digital gets 7.5% of the advertising revenue made through SABC+, above the company’s quoted fees.
According to Werkmans, Naicker misrepresented his own involvement in the agreement and failed to make sure that all costs related to the creation of SABC+ were clearly defined and accounted for.
Werkmans found that Nxumalo “was aware of the 7.5% as a number but could not join the dots on what it was for. His response was tantamount to withholding vital information,” according to City Press.
The Communications Workers Union (CWU) welcomed the dismissals. They come at a time when unionised workers are fighting for their next annual salary increases after successfully winning the fight for backdated increases to be paid out in September after a three-year salary freeze.
On Sunday, CWU national bargaining co-ordinator Nathan Bower accused the SABC of pleading poverty in the face of allegations of concealing profit while failing to hold all those involved accountable, as well as financial managers under whose watch mismanagement was taking place.
“The plundering of the financial resources of the SABC through shady contracts and unaccounted fruitless and wasteful expenditure every financial year cannot continue and be used as an excuse,” Bower said.
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