SABC Board Inquiry interim report: consideration of responses

Ad Hoc Committee on SABC Board Inquiry

22 February 2017
Chairperson: Mr V Smith (ANC)
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Meeting Summary

The Committee continued considering the SABC response to its Interim Report and making amendments to it. The SABC response clarified that the Vision View contract was approved 31 July 2015 but was confirmed on 18 September 2015 and that in addition to the Board’s round robin decision, further ratification was confirmed at a fully constituted meeting of the EXCO. Based on the SABC response, it agreed that the Interim Report had to be more specific as the SABC refuted Mr Mabaso’s claim that he had introduced their performance management system. “According to the SABC Mr Mabaso had only revised a policy that which had been approved prior his appointment in June 2013”. It agreed that the SABC had said up to the time that the Constitutional Court pronounced on the status; there had been uncertainty about the binding nature of the Public Protector’s remedial actions.

The Committee Researcher briefed the Committee on Minister Faith Muthambi’s response to the Committee Interim Report dealing with irregular amendments to the MOI. Minister Muthambi's submission addressed the following matters in the Interim Report:
• the MOI which had been irregularly amended to empower her to remove directors of the SABC Board in line with the Companies Act of 2008.
• the amendments which had been proposed in the Broadcasting Amendment Act 4 of 2009 to concentrate power to her ministry.
• her involvement in the removal of non-executive board members
• her unduly pressurising certain board members to resign
• her covert or overt pressuring of the SABC Board to appoint Mr Motsoeneng as Chief Operations Officer.

Minister Muthambi had replied that it had been factually incorrect that she had irregularly amended the SABC MOI to concentrate power in her office. When she had been appointed on 24 May 2014, the SABC MOI had already provided for the non-executive directors to be removed using section 71(3) of the Companies Act. The relevant clause in the MOI had been 14.4. The Interim Report had been incorrect that the MOI had moved powers of the board to the Minister. She reaffirmed points from her testimony, especially removing of board members through section 71(3) of the Companies Act. She had sought independent legal advice and her decision had been put to the Portfolio Committee on Communications. She cautioned Parliament about interpreting law and urged that the doctrine of separation of powers be maintained. Section 5 of the Companies Act mentioned legislation that took precedence over the Companies Act and the Broadcasting Act 4 was not mentioned there.

The Minister submitted that the SABC Board had acted without undue influence from herself in the removal of three former non-executive board members. On pressuring the SABC Board to appoint Mr Motsoeneng, Minister Muthambi submitted that she had declined to attend that meeting but eventually attended after deliberations had been concluded.

The Minister raised process and natural justice principles in terms of the Committee’s findings that she had acted in conflict with various statutes. She said this section in the Interim Report was vague and that she had not been afforded proper notice of the allegations against her. Minister Muthambi stated that there had been no evidence that she had exposed herself to any situation involving the risk of a conflict between her official responsibilities and private interests.

The Committee was trying to establish if the latest Memorandum of Incorporation (MOI) from the SABC was valid because during the inquiry many MOIs were mentioned. The Committee Content Advisor noted that the Committee was in possession of three MOIs. The Researcher had then checked with the Companies and Intellectual Property Commission (CIPC) where the MOI would have been logged. CIPC records had shown that the only MOI submitted to it had been on 14 October 2013 as signed by former Minister of Communications, Yunus Carrim, with a notice to amend submitted by his then attorney. The only record of another submission on behalf of SABC was dated 15 July 2015 which had been a notice of change of directors.

The Committee Evidence Leader provided a briefing on contradictory evidence. Some of these included:
• Whether Ms Gugu Duda and Ms Lulama Mokgobo had been related to Minister Dina Pule had no relevance to the Committee mandate on whether the SABC Board had discharged its functions.
• The cost of The New Age (TNA) breakfast shows had been reported with a lot of contradictions but the Committee certainly had sufficient evidence to conclude on that matter.
• Gross political interference allegations would have to be weighed against the performance of Ms Tshabalala versus Dr Ngubane in that regard, so as to determine whether there had been political interference or not.
• There had also been much evidence around the sale of the SABC archives. Adv Vanara felt it irrelevant to the Committee mandate although it was an important aspect about SABC assets. The Committee could defer the matter to the successive SABC Board to look into.
• Whether there had been a meeting about R500 000 was of no consequence as it had been an issue from before the Board chaired by Prof Maguvhe.
• On whether it had been Dr Ngubane or the Board that had decided that Mr Motsoeneng had to attend board meetings had no material relevance in the report of the Committee.

Members suggested that if the Minister and the Board were using a Memorandum of Incorporation that was not submitted to CIPRO, then everything they had done is illegal. SABC Board decisions based on the changes by Minister Muthambi and Hlaudi Motsoeneng to the SABC Memorandum of Incorporation (MOI) since 2014 appear to be illegal. The intention was to regulate something that was seen to be wrong. Mr Hlaudi becomes a director in October 2011 and attended board meetings, but no one knew about his capacity in those meetings. But now it becomes clear he was a director. The Chairperson decided this matter should be parked until more information is gathered. The whole matter raises serious questions and no one seems to give the Committee an answer. The Committee could make a recommendation about its observation and ask that somebody else takes the matter forward. The role of the Committee is not accusatorial.

Meeting report

The Chairperson noted that the Committee had indicated that it would deal with the Memorandum of Incorporation (MOI); consideration of the Minister’s responses and a briefing by Adv Vanara on areas of possible conflict.

The Committee continued it consideration and summary of responses to the SABC Board Inquiry Interim Report.

SABC response to response to Interim Report
The Chairperson noted that the South African Broadcasting Corporation (SABC) refuted what the Committee had concluded here. Was the Committee correct in capturing its comments on this?

Mr N Singh (IFP) agreed that indeed the SABC had refuted this and it also said the Vision View contract contract had been executed only on 18 September 2015. The Committee could add that to 16.12 (1).

The Chairperson noted the confirmation date as 18 September not 31 July 2015.

Mr M Waters (DA) referred to the working draft of the report at page 116; the SABC was not disputing there had been a round-robin but there had been a ratification of that round-robin at a fully constituted meeting of the Executive Committee (EXCO). It had gone the extra mile to seek ratification.

Mr S Swart (ACDP) proposed revised wording: “the contract was approved 31 July 2015 as stated in paragraph of Interim Report but was confirmed 18 September 2015. It also explains that in addition to the board’s round robin decision on this issue, further ratification was confirmed at a fully constituted meeting of the EXCO”.

Ms F Loliwe (ANC) said that on page 116 she read the round-robin as preceding the approval on 18 September 2015. The sentence could start as:”the round-robin on 31 July...which was then approved on the 18 September 2015”.

Ms J Kilian (ANC) said that since the Committee did not know when the agreement had been signed she found it strange that the discussion was about ratification by the EXCO of SABC since the EXCO could not replace the SABC Board.

The Chairperson said that the Committee was putting what the SABC had said in their response.

16.13 (1) - Human Resources (HR) related matters
Ms Kilian said the capturing was correct as it was.

Mr Singh asked if it was necessary for the Committee to include that the SABC had attached board meeting and Annual General Meeting (AGM) minutes in reference to the amendments of the MOI.

The Chairperson said the committee secretary had suggested including: "as confirmed by the minutes of the 4 September".

The Committee agreed.

16.13 (2)
The Chairperson asked if the Committee Interim Report had said Mr Hlaudi Motsoeneng had been appointed as Corporate Affairs Executive (CAE); since the SABC response had been that he had not been appointed but rather 'returned'.

Mr Waters replied that in the Committee Interim Report it had been noted in 8.2.1.

The Chairperson asked if the Committee was satisfied with the way 16.13 (2) had been crafted.

Dr M Khoza (ANC) said her reading of 8.2.3 of the Committee Interim Report was that Mr Motsoeneng had been appointed.

Mr Waters said he did not see where in the Committee Interim Report, it said Mr Motsoeneng had been appointed permanently to his previous position.

The Chairperson said he also could not see that point in the Committee document.

Mr Swart said the SABC document should be referring to paragraph 8.2 – HR.

Ms Kilian said that on page 120 of the SABC response there was a reference to paragraphs 8.2.1; 8.2.2 and 8.2.6 where SABC made one general comment and quoted the outcome of the court case. The court had restored the employee to a position to which he should have been in. Therefore the capturing of 16.13 (2) was correct.

Prof N Khubisa (NFP) agreed that 16.13 (2) had been captured properly.

Mr Swart said the word ‘appointed’ was incorrect. The Committee Report had to say Mr Motsoeneng returned to his position since he was not appointed according to the SABC response.

The Chairperson said the advice of the secretary was that the Committee could replace ‘denied’ with ‘stated’ so the sentence read: ’SABC stated’.

Dr Khoza did not understand why the Committee would want to replace the term ‘deny’

The Chairperson suggested that they flag the sentence as the secretary was insistent that ‘deny’ implied something else. He recalled that the Committee had never said anything about the CAE position which Mr Motsoeneng had returned to.

The Committee agreed.

16.13 (3)
Ms Kilian suggested that ‘claimed’ be used in place of ‘pointed out’ since that would mean the knowledge was public and factual when in fact only the SABC had the information that people who had been referenced in the Public Protector Report, had denied participating in her investigation.

Mr Swart said that the use of ‘stated’ was a reference to what was in the SABC response without the Committee necessarily accepting what was stated. In the Observations section of the Committee Report, the Committee could consider the credibility of the SABC responses. As the Committee was still recording the SABC response, the use of ‘stated'; 'claimed' or 'pointed out’ was of no consequence.

Mr Singh suggested alternating between the three words and agreed with Mr Swart that there was no need to split hairs about the capturing.
 
The Committee agreed.

16.13 (4)
No substantive changes made.

16.13 (5)
Mr Singh said the wording of the Interim Report had to be more specific as the response from the SABC had stated that the SABC refuted Mr Mabaso’s claim that he had introduced its performance management system. “According to the SABC Mr Mabaso had only revised a policy that which had been approved prior his appointment in June 2013”.

The changes were agreed too.

Dr Khoza recalled that at 17.1 (1) the Committee had recommended that ‘misled’ be replaced with ‘lied’. Had the change been effected?

Mr Swart clarified that it had not said Dr Ngubane misled; rather Mr Molefe had been quoted as saying Dr Ngubane had misled.

Mr J Mahlangu (ANC) said that what Mr Swart had referred to could become problematic after the tabling of the Committee Final Report. He wanted the language of the Report to be clear that it was reflecting the SABC responses.

Dr Khoza said that the section the Committee had just gone through could not be confused with the Committee’s position as it was merely summarising the SABC response to the Committee Interim Report.

Mr Singh supported the sentiments of the Committee and added that verbatim statements could be simply put in quotation marks.

The Chairperson said that the secretary suggested that in the Committee Interim Report at 12.4 one adds: "The Committee has considered the responses in detail. The salient points of each response had been summarised in paragraphs 13.2 (1) to 21". It has to be noted that the section did not contain the Committee’s views or offer an evaluation of the responses.

Mr Swart referred back to 16.15 (1) suggesting that the Committee insert a sentence to indicate that in the SABC's view there had been uncertainty as to the binding nature of the Public Protector’s remedial actions.
It be could be captured that: ‘up to the time that the Constitutional Court pronounced on the status; there had been uncertainty about the binding nature of the Public Protector’s remedial actions’.

The proposal was agreed to.

Minister Muthambi response to Interim Report
The Committee Researcher briefed the Committee on the Minister’s submission in response to the Interim Report and identified areas where the Minister of Communications, Ms Faith Muthambi, was implicated.

Minister Muthambi's submission addressed the following in the Interim Report:
• the MOI which had been irregularly amended to empower her to remove directors of the SABC Board in line with the Companies Act of 2008.
• the amendments which had been proposed in the Broadcasting Amendment Act 4 of 2009 to concentrate power to her ministry.
• her involvement in the removal of non-executive board members
• her unduly pressurising certain board members to resign
• her covert or overt pressuring of the SABC Board to appoint Mr Motsoeneng as Chief Operations Officer.

Irregular Amendments to the MOI
Minister Muthambi had replied that it had been factually incorrect that she had irregularly amended the SABC MOI to concentrate power in her office. When she had been appointed on 24 May 2014 the SABC MOI had already provided for the non-executive directors to be removed using section 71(3) of the Companies Act. The relevant clause in the MOI was 14.4. The Interim Report had been incorrect that the MOI had moved board powers to the Minister. She reaffirmed points from her testimony, especially removal of board members through section 71(3) of the Companies Act. She had sought independent legal advice and her decision had been put to the Portfolio Committee on Communications. She questioned the credibility of Mr Masinga as a witness and why he had decided to contest the MOI referencing the court case: Masinga v the Minister of Communications and three others: case 10721/2015.

Amendments to the Broadcasting Act
The Minister's submission said that the entire paragraph 4.2 of the Interim Report had been irrelevant to the issues investigated by the Committee. The Committee had failed to acknowledge that the Bill had been certified constitutionally compliant by the Office of the Chief State Law Advisor and independent counsel. The Bill had further been approved by Cabinet and tabled to the Portfolio Committee on Communications. Minister Muthambi contested the claim that the amendment of the Broadcasting Amendment Bill had been an attempt to centralise power. Further, she cautioned Parliament about interpreting law and urged that the doctrine of separation of powers be maintained. Section 5 of the Companies Act mentioned legislation that took precedence over the Companies Act and the Broadcasting Act was not mentioned there.

Removal of non-executive board members
The Minister submitted that the SABC Board had acted without undue influence from herself in the removal of former non-executive board members Mr Lubisi, Ms Zinde and Ms Kalidass. At no point had the Minister pressured any board member to resign.

Pressuring of the board to appoint Mr Motsoeneng
Ms Muthambi submitted that she had been invited to attend a board meeting on the 7 July 2014 when the matter of appointing Mr Motsoeneng as permanent chief operations officer (COO) would be discussed. She had told the SABC Board that it had no power to appoint or suggest appointments of executive members as outlined in the Broadcasting Act. She had declined to attend that meeting but eventually attended after deliberations had been concluded. She had then suggested that she receive a written recommendation from the Board suggesting the appointment of Mr Motsoeneng as permanent COO. The decision she had taken had been after consultation with Mchunu Attorneys who had been mandated to provide a report on the Public Protector Report which had had findings against Mr Motsoeneng. She had not been part of the deliberations of the Board but rather her decision to appoint Mr Motsoeneng had been after considerable consideration of the facts before her.

Alleged breaches of law
The Minister raised process and natural justice principles on the Committee findings that she had acted in conflict with various statutes. She referred to the section in the Interim Report as being vague and that she had not been afforded proper notice of the allegations against her. Further, she was not waiving her right to be properly informed of allegations against her and to be afforded sufficient time to engage such allegations.

MultiChoice deal
Minister Muthambi noted that Caxton as one of the complainants in the Competition Commission matter between SABC and MultiChoice had returned the case to the Competition Appeal Court on the grounds that not all documents had been made available by the SABC and MultiChoice. The matter had been heard in December 2016 with a decision still pending. Therefore the matter was sub judice.

Breach of the Constitution
The Interim Report stated that both in instances where Minister Muthambi had presumably played a role in the removal of non-executive directors, she could have contravened section 96(b) and (c) of the Constitution; section 15(1) of the Broadcasting Act; section 2(1)(b) and (d) of the Executive Members Code of Ethics and section 17(e) of the Powers, Privileges and Immunities of Parliaments and Provincial Legislatures Act, 2004.

The Minister’s submission stated that the section was section 92(2)(b) and (c) and not section 96(b) and (c) of the Constitution. The use of language in the Interim Report suggested that the Committee had been uncertain about its finding and the term suggested possibility and not guilt of any wrongdoing. Minister Muthambi stated that there had been no evidence that she had exposed herself to any situation involving the risk of a conflict between her official responsibilities and private interests. Therefore the Committee finding was factually incorrect.

Discussion
Mr Singh noted the similarity between the draft summary and what the researcher had just presented.

Ms Kilian said she was content with the summary as it was not that different from the research input.

Ms Loliwe said if there were no differences in content there was no need to amend the Committee summary.

The Chairperson suggested that the Committee go through the Committee summary despite it being similar to the researcher's input.

Committee summary of Minister Muthambi response
15.1 Amendment to the MOI
Mr Waters said paragraph 9 of the Minister’s submission had stated that the MOI had been lodged with the Companies and Intellectual Property Commission (CIPC) on the 20 May 2014. He felt it important that the date as indicated by the Minister was important for inclusion in the Committee Report.

The Chairperson asked for confirmation from the Committee on Mr Waters' proposal.

Ms Loliwe said she saw no problem with the proposal.

Mr H Chauke (ANC) said the Minister was appointed on the 25 May 2014 and not the 24 as was captured in the Committee Report.

15.3 Removal of non-executive Board members
Mr Mahlangu said that Minister Muthambi had submitted that the matter of the removal of the non-executive board members had been reported to the Portfolio Committee on Communications.

The Chairperson replied that the secretary had already captured that at 15.1.2.

The Committee was satisfied.

15.4 Pressurising the Board to appoint Mr Motsoeneng
Mr Waters noted there was fault in the capturing as it stated that Minister Muthambi had initially declined the invitation but eventually attended the meeting until deliberations were concluded. Minister Muthambi’s response had actually read: "I declined to attend the board meeting but waited at the SABC premises until it was completed. After about two hours the chairman of the Board informed me the SABC Board had taken a decision which it wanted to relay to me". Mr Waters said that that was when Minister Muthambi had joined the meeting. He suggested that the sentence read: "The Minister eventually joined the meeting when deliberations had been concluded".

Ms Loliwe said that it made no difference as Minister Muthambi’s response had earlier alluded to the fact that she had eventually joined the meeting and was told the SABC Board had resolved to appoint Mr Motsoeneng.

Mr Mahlangu agreed with Ms Loliwe.

Ms Kilian said the Committee had to read what it had said very carefully; if it was saying Minister Muthambi had initially declined to attend the meeting that could be read to mean something else. Therefore she had sympathy for the argument that the wording be: "Minister Muthambi declined to join the meeting; then came in only after the Board resolution was taken".

Dr Khoza agreed to dropping ‘initially' from 'initially declined’ as it would suggest that at some stage Minister Muthambi had agreed to the invitation.

Mr Waters reiterated that it would still mean at some point the Minister joined the board meeting during deliberations on the COO; which was not correct.

The Chairperson suggested small changes which left the sentence reading as Mr Waters had proposed.

Mr Waters said Minister Muthambi's submission said that she had also considered that the COO position had not been externally advertised and that the Board justification had satisfied her. That needed to be included here.

Ms Loliwe asked if the addition from Waters would assist here as it was part of the interview copy which Minister Muthambi was given for consideration and it was related to another point.

Mr Waters said it was extremely important that Minister Muthambi felt satisfied that there was no need for the COO position to be advertised. That had to be included somewhere in the summary.

The Chairperson said it would be considered where best to put Mr Waters’ remark but it would be included in the report. He asked if the Committee wanted to add anything more to the summary of the Minister’s input.

The Committee was satisfied.

Mr Chauke proposed that since Ms Kilian had started working on Recommendations could that be circulated amongst the Committee members for the afternoon session of the meeting.

The Chairperson noted there had been a skeleton recommendations document; was that not a better base to work from?

Mr Chauke said he was referring to that skeleton together with what Ms Kilian had developed as well.

Ms Kilian explained she had not changed any of the previous recommendations rather she had rearranged the headings and collated some paragraphs.

Prof Khubisa said he wondered by when the Committee would package the recommendations in terms of short; medium and long term as he thought that was what Mr Chauke was referring to.

Mr L Mokoena (EFF) said there was nothing wrong with sharing information.

The Chairperson said that the presentations which would follow were merely for the Committee to elaborate on its Observations in the Committee Report.

SABC Memorandum of Incorporation (MOI) changes
The Researcher said the Committee was in possession of three MOIs. The first MOI had been undated and unsigned and was part of the submitted documents by the SABC. The second MOI had been adopted on 20 September 2013 and signed by the Minister of Communications on 30 October 2014. The third MOI was similar to the second one with the additional signature of Professor Maguvhe.

Mr Singh asked which Minister of Communication was being referred to.

The Researcher replied that both signed MOI copies before the Committee had been signed by Minister Muthambi.

The Researcher said the first change identified in the MOI had been in about AGMs. The signed copies had said: notwithstanding that the SABC was a private company and accordingly not required in terms of the Companies Act to hold an AGM as defined in that Act duly called and constituted in terms of section 61 (7) of the Companies Act.

Section 13.3.3 which spoke to the chairperson and deputy chairperson of the SABC Board being absent or unable to perform their functions, the Board could nominate any other non-executive board member to act as a chairperson had not been included in the unsigned and undated MOI; whereas the signed copies had that clause.

The Researcher had also identified alteration of Section 13.4 on delegation and assignment in the unsigned and undated MOI in terms of numbering. The undated and unsigned MOI did not have Section 14.2.7 whereas the other two MOIs had the clause. Sections 14.3; 14.4.1.2.6 had also been missing in the unsigned MOI.
 
In the Minister's submission she had stated that it had been factually incorrect to conclude that she had irregularly amended the MOI to concentrate power to her ministry. She further contended that when she had been appointed on 25 May 2014, the SABC MOI already had provided for non-executive directors to be removed. Further, she reaffirmed points made in her submission particularly on the validity of removing board members using sections 71(3) and she had also solicited independent legal opinion and that her decision had been tabled to the Portfolio Committee on Communications.

She had questioned the credibility of Mr Masinga as a witness and why he had contested the MOI. The Researcher said according to the SABC; it was incumbent upon the stakeholder to include the unalterable clause contained in the Companies Act in order for the MOI to be accepted or registered by CIPC. The SABC refuted the statement that the MOI had been used to trump the Broadcasting Act as invalid. The SABC had further provided evidence in annexures where the board meeting minutes of 29 June 2016 reflected the request to amend the MOI where the resolution had been that the proposed amendments were approved for submission to the shareholder for filing with the CIPC. The Researcher said it had not been clear if the MOI referred to in the 29 June minutes had ever been submitted to the CIPC.

The SABC had also alleged that there was a MOI resolution dated 20 September 2013 and in the submitted copies by Minister Muthambi she had signed a MOI on the 30 October 2014. Further, the Board had been party to the changes to the MOI as evidenced by 4 September 2015 minutes of the AGM and board meeting minutes of 29 June 2016 and 18 August 2016.

Mr Masinga had appeared before the Committee on 12 December 2016 and told them how he had challenged attempts by Mr Motsoeneng and Mr Heunis to suspend him on the basis that only the Board had the competence to suspend or discipline him. Mr Masinga had testified that he had reported the matter to board members who were up in arms as there had been no board resolution authorising his suspension. He had further submitted that Minister Muthambi had amended the MOI in 2014 to give executive directors powers to appoint, discipline, suspend and fire group executives. It had been that MOI that enabled executive directors to purge those who were opposed to the wrongs that were being done, and replace them with pliant individuals.

Mr Masinga’s further statements contradict the evidence provided by Minister Muthambi in that she submitted that the MOI changes had been in line with the Broadcasting and Companies Acts. She said it had not been compulsory but she had consulted the Board on the MOI changes as a courtesy before they were submitted to CIPC. She said she had also briefed the Portfolio Committee on Communications in June 2015 on the MOI changes with no objections raised by that Committee or the SABC Board.

Mr Masinga submission of the 29 January 2015 board minutes showed that concerns were raised by the SABC Board and a resolution followed that the Minister would be invited to discuss concerns about those changes to the MOI.

The Researcher had then checked with CIPC where the MOI would have been logged. CIPC records had shown that the only MOI submitted to it had been on 14 October 2013 as signed by former Minister of Communications, Yunus Carrim, with a notice to amend submitted by his then attorney. The only record of another submission on behalf of SABC was dated 15 July 2015 which had been a notice of change of directors.

Issues for the Committee to consider
If there had been changes to the MOI as suggested in the SABC response to the Committee Interim Report; it had to be ascertained if the MOI changes had indeed been submitted to CIPC. Minister Muthambi had been correct in her evidence that clause 14.4 of the MOI had provided for removal of board members prior to her tenure as Minister.

The Broadcasting Act of 1999 was outdated and made it difficult to dissolve the SABC Board in the event that it was not quorate nor did the Act provide for the Board to be dissolved if board members resigned as had happened at the SABC. Such loopholes created opportunities for the Companies Act to be misconstrued as the principal Act governing the SABC. Amendment to the Broadcasting Act with the intention of strengthening the law could be a possible resolution in the conflict of application of relevant law as it was the principal Act and general law was the Companies Act.

The implied insinuation of the two signed copies of the MOI that the Companies Act trumped the Broadcasting Act also had to be urgently addressed.

Minister Muthambi had to give clarity as to which MOI had been logged with CIPC and which MOI was still in force as SABC had submitted evidence contrary to what she had said.

Reflection on Portfolio Committee on Communications official minutes & Parliamentary Monitoring Group minutes of 23 June 2015 briefing by Minister Muthambi on the MOI
Mr Mbombo Maleka, Committee Content Advisor, noted that Minister Muthambi during the 23 June 2015 meeting with the Portfolio Committee on Communications had said that the MOI had been amended by her predecessor Mr Carrim. She had indicated that the MOI she had tabled then had been logged with CIPC on 14 May 2014. She had said the process in section 71(3) of the Companies Act to remove board members, did not involve the National Assembly. She said: “Certain interest groups may be unhappy with this as it left the matter entirely in the hands of the SABC Board but this was what the legislature chose and intended”. The powers of the National Assembly, in terms of section 15(1) of the Broadcasting Act had not been diluted or removed by section 71(3) of the Companies Act. Therefore it had been unnecessary to canvass the MOI changes further as there had been an overlap in terms of these sections of the Broadcasting and Companies Acts, in relation to the alleged misconduct of dereliction of duty of the three board members who were removed in 2014/15.

Minister Muthambi had then explained to that Committee the three procedures for removing SABC Board members. First had been removal by the President on the advice of the National Assembly after due enquiry upon recommendation by the SABC Board in terms of section 15(1)(a) of the Broadcasting Act. Second was removal by the President after findings of misconduct by a National Assembly Committee and adoption of a resolution calling for that board member’s removal from office in terms of section 15(1)(b) of the same Act. Lastly, would be removal by a resolution of the SABC Board where the Board had determined that a director had been derelict or negligent in the performance of duties and functions as a director in terms of section 71(3)(b) of the Companies Act.

Minister Muthambi had also said the provisions of the Companies Act and Broadcasting Act in this scenario “were capable of concurrent application”. She did not want a situation “where the House was misdirected to be a forum to argue which laws were to be applied or not and to argue the interpretation of law – this attempt must be defeated”. She had assured that Committee that the three former SABC Board members who had been removed, had been given a fair inquiry and were afforded an opportunity to make representations. Section 71(3)(b) of the Companies Act empowered the SABC Board to remove board members who had been found to have abandoned the fiduciary duties they were required to uphold. Her emphasis was that the legal opinion of Parliament’s legal advisors had ignored the provisions of the Companies Act and section 8(a) of the Broadcasting Act. Moreover, the former board members had not disputed the outcome and the Portfolio Committee on Communications was not the correct forum for legal submissions and interpretation of law.

The Portfolio Committee on Communications had acknowledged Minister Muthambi’s legal opinion which contradicted the opinion of Parliament’s legal advisors.

Discussion
Mr Waters said the summary by the researcher had been helpful. In the working draft of the Committee Interim Report, Minister Muthambi had denied ever signing an MOI in her testimony before the Committee when in fact the analysis by the researcher showed she had signed two copies. A second contradiction was that board minutes dated 29 January 2015 as provided by Mr Masinga proved that concerns were raised about changes to the MOI by the Board. Thirdly, analysis showed that the last amendment to the MOI logged with CIPC had been June 2015 not 14 April 2014 as Minister Muthambi had alleged. There was also no evidence that Minister Muthambi had actually submitted the MOI. There was a procedure in place to dissolve the SABC Board and section 15(1)(b) read: “The National Assembly could after due inquiry and by adoption of a resolution by the House recommend the dissolution of the SABC Board”. Section 15(2)(c) further read: the authority or body could dissolve the Board if a resolution recommended a removal of all board members. Therefore Mr Waters did not agree that it was ‘difficult’ to dissolve the SABC Board as it was never supposed to be easy.

Mr Singh asked which MOI was in force at the SABC at the time. As he understood it, the MOI amendment of 14 October 2013 was filed and recognised by CIPC in May 2014. He asked if there had been any other attempts to file a MOI amendment with CIPC.

Prof Khubisa asked if the Committee Interim Report sent to the SABC had been contradicted regarding the authentic MOI and the analysis given by the researcher and content advisor.

Mr Mokoena said until the Committee understood which MOI was in force, all debate around the MOI would be fruitless. The MOI which Minister Muthambi had alluded to seemed to be illegal according to the records from CIPC unless the Minister or the SABC were able to produce a CIPC letter of receipt for the newer one.

Ms Kilian said unless there had been an administrative error on the side of CIPC and evidence could be produced that Minister Muthambi had filed a MOI amendment in 2015; then the Committee had to accept that the MOI in force was the one which had been signed by former Minister Carrim.

Had the researchers analyzed the amendments from the MOI signed by Minister Carrim and the MOI that had two signatures from the Minister and SABC Board chairperson?

Dr Khoza asked if there was any information on the circumstances that had led to there being three different MOIs with changes in the clauses contained.

Mr Mahlangu asked if he would be wrong if he concluded that there were four MOIs, the fourth being the one that had been signed by former Minister Carrim and acknowledged by the CIPC. The Committee did not have an analysis of that MOI. Secondly, that MOI read that it had been filed for corrections. Did corrections equate to amendments or where those two different things?

Mr Mahlangu asked which of the Acts referred to in the discussion trumped the other? Who had the authority to amend the MOI? Which was superior between the Broadcasting Act and the Companies Act? Who had the authority to remove EXCO members and non-executive members? Who was the appointing authority for the SABC Board?

The Chairperson said the consensus was that the researchers had to find out from CIPC which MOI was in force at the SABC. He was proposing that the researchers be allowed to go find that out.

Mr Mokoena said that it would be important to get the SABC or the Minister’s view on what had informed their decision to use a MOI that CIPC did not recognise.

The Chairperson said the Committee had debated the matter of introducing new evidence at this point. His biggest fear was in wanting a response to Mr Mokoena’s question, this would be opening the door to new evidence being introduced.

The Committee agreed.

Contradictory evidence presented to the Committee: briefing by Evidence Leader
Adv Ntuthuzelo Vanara, Committee Evidence Leader, said his presentation captured particular principles rather than all the evidence presented. Hopefully it would assist the Committee in its final deliberations. Whilst there was contradictory evidence; not every contradiction was material and relevant to the matters to be determined by the inquiry. Not every contradiction had been motivated by the desire to mislead the Committee or was dishonest or lies but that would remain for the Committee to determine. The credibility of witnesses played an important role in the analysis of contradictory evidence. Relevant would be an assessment of the witness’s performance under oath and whether the witness’s evidence had been corroborated by other witnesses. He had only focused on witnesses that had testified under oath and were engaged by the Committee; that excluded written commentary by the SABC to the Committee.

Some of the contradictions were:
• Whether Ms Gugu Duda and Ms Lulama Mokgobo had been related to Minister Dina Pule had no relevance to the Committee mandate on whether the SABC Board had discharged its functions.
• The cost of The New Age (TNA) breakfast shows had been reported with a lot of contradictions but the Committee certainly had sufficient evidence to conclude on that matter.
• Gross political interference allegations would have to be weighed against the performance of Ms Tshabalala versus Dr Ngubane in that regard, so as to determine whether there had been political interference or not.
• There had also been much evidence around the sale of the SABC archives. Adv Vanara felt it irrelevant to the Committee mandate although it was an important aspect about SABC assets. The Committee could defer the matter to the successive SABC Board to look into.
• Whether there had been a meeting about R500 000 was of no consequence as it had been an issue from before the Board chaired by Prof Maguvhe.
• On whether it had been Dr Ngubane or the Board that had decided that Mr Motsoeneng had to attend board meetings had no material relevance in the report of the Committee.

Adv Vanara said the relevance of the MOI as he understood it as evidence leader for the Committee had been that, it had contributed to the weakening of governance within SABC. Although Minister Muthambi had initially said she had not initiated the MOI amendment, she had however taken responsibility when she said she had amended the MOI. Critical about this were the powers of the Board which had been taken and given to the executives; which Minister Muthambi did not dispute. The impact of that decision had catastrophic effects which were also not in dispute. The Committee could make findings and recommendations on that.

The 63% salary increase of Mr Motsoeneng had been found in the Public Protector Report which Dr Ngubane had never challenged. Whether Mr Motsoeneng’s appointment as acting COO had been done through the Board or by Dr Ngubane, as testified by Mr Phil Molefe, was not material to the Committee mandate. In the event it became material, the Public Protector Report was public knowledge. The question that arose was who had appointed Mr Motsoeneng Acting COO prior the three years it had taken the SABC Board to confirm his appointment?

The MultiChoice agreement was a matter under litigation and the Committee would not be incapacitated to report on it.

Discussion
Mr Waters asked if the amendments made to the MOI by Minister Muthambi were ever implemented at the SABC. It was material to the Committee mandate on who decided to appoint Mr Motsoeneng permanent COO. Minister Muthambi had from start contradicted herself on the MOI and only backtracked after the signed MOI was made public.

The Chairperson said that it had been agreed that the MOI issue would be left to the researchers to find out as earlier agreed.

Mr Chauke said that much had been discussed about statements under oath. When they were contradictory what would be the implication?

Ms Kilian said she had hoped that Adv Vanara would have listed this material evidence though she would not discard his input. Would he agree that statements such as “so and so were related” would affect a witness’s credibility?

Afternoon session
Adv Ntuthuzelo Vanara responded to Members’ question on his briefing about contradictory evidence.

On the credibility of witnesses, Adv Vanara said the preoccupation with who is related to who amongst the witnesses does not take the Committee forward. The Committee should look at the totality of the evidence.

On whether the Minister was telling the truth, Adv Vanara replied there is no need to create the impression that the Minister was telling the truth or not. Even if a witness contradicts herself/himself in a particular testimony, that does not mean the entire testimony should be totally discarded or it was a lie.

Dr M Khoza (ANC) asked Adv Vanara to comment on allegations that the Committee was relying heavily on oral evidence rather than on written documents.

Ms J Kilian stated the information presented to the Committee was enough but the SABC has reported the Committee did not capture information from the SABC Board.

The Chairperson said it is not true that the Committee did not capture information from the SABC Board.

Adv Vanara maintained that the Committee has called many witnesses to appear before it. The Committee has to determine the process, as it has done before. The Committee does not have to rely heavily on what the witnesses said. The SABC Board and its executive were given a chance to question the witnesses and to take the opportunity to respond to the issue of bias. That allegation of relying heavily on oral evidence does not have merit. The Acting Group CEO was given the opportunity to take the stand but offered to forward a written response. The Committee rejected the offer. So, there is no evidence before the Committee to challenge the evidence laid before the Committee by the witnesses. The information presented by the witnesses carries more weight because that was done under oath and the testimony of witnesses was evaluated.

The Chairperson indicated it is ironic that the SABC said the Committee has not used written information. The Committee was not granted the documents by the SABC on legal grounds. The Committee had to go to court for the documents.

Dr Khoza said the reason for asking about that allegation about oral evidence, is that it is a material distortion. So, Members have to leave the Ad Hoc Committee knowing very well they responded to it.

Ms J Killian agreed with Dr Khoza, saying the response of the SABC is derogatory and rubbishes the witnesses and the document of the Committee.

Dr Khoza asked which Memorandum of Incorporation (MOI) is valid and lawful as many MOIs have been referenced during the inquiry; because it appears that the decisions taken by the SABC Board may be unlawful and invalid. She asked the research team to explain.

Mr Mbombo Maleka, Parliament Content Advisor, explained that file MOI COR 14.3 was for changing the company name and memorandum of incorporation in 2014 but was never filed with CIPRO. The last official document MOI COR 39 was filed with CIPRO in October 2013 by Minister Carrim, then Minister of Communications, and was finalised by CIPRO in 2014. The last amendment was made in 2015 on COR 39 with the notice to change directors. The researchers have got four documents at their disposal.

Dr Khoza asked the Committee to confirm that the July 2015 amendments to the MOI did go to CIPRO.

Mr Maleka agreed in the affirmative.

Mr N Singh (IFP) said if the Committee says there are four versions of the MOI, then that means the three versions were attempts to amend the MOI. The only MOI the Committee should consider is the one filed in 2013 and signed by Mr Carrim and it got amended in 2015. That is the MOI the Committee should consider.

Ms J Kilian stated the Committee has two documents. The first one is an amendment of the Memorandum of Incorporation. So, with the new Companies Act they (SABC Board and Minister Faith Muthambi) had to comply with the legislation. The other document is a notice of change of company directors. That was the last document filed in July 2015. There is a pattern of amendments. It is important for the Committee to look at those changes and consider what necessitated them.

Mr L Mokoena (EFF) said if the status of the document is as is, that means the Committee has got a problem with the delegation of authority framework. The Committee needs to know when the framework was agreed on by the Board. He said Mr Hlaudi Motsoeneng was appointed as a director in 2011 in one of these companies but the capacity under which he was appointed is not clear. He asked the research team to give the Members more information on that. This has implications for all the other SABC legislation, and the SABC was being run on an illegal document.

Mr J Mahlangu (ANC) asked if any decision was taken on the basis of the 2013 MOI seeing that the fourth MOI is still alive.

Mr H Chauke (ANC) said the position is not clear. There is only one standing MOI and it is that of 2015. Changes in other MOIs were never launched or submitted to CIPRO. All that was done is illegal. After Minister Faith Muthambi won the case against Mlengana, she never submitted amendments to CIPRO. But the question that needs to be asked is who has the authority to sign and submit the amendments to CIPRO? The Committee should focus its energies where it is going to get answers, not where it would not find them.

Mr M Waters (DA) said there seems to be confusion about which MOI is standing. The one signed by Mr Carrim appears to be standing. That is MOI 2015. He asked if the current Minister of Communications and the SABC Board did accede authority to the current MOI, and asked if it is true that the Minister and the Board were using the MOI that was not signed and not submitted it to CIPRO. Everything they had done is illegal.

Mr S Swart (ACDP) pointed out that these revelations had huge implications. The Committee needs to bear in mind the implications of such a finding. The Committee has done its own research and got the facts right compared to the documents submitted by the SABC Board. It is clear CIPRO was never advised of directors that had resigned.

Mr Singh said that the document states that the first person to be appointed was Hlaudi Motsoeneng in 2011 and the others in 2012. He wanted to know what the legal processes were that informed the submission of COR 39 to CIPRO. He said COR 39 should be looked at carefully, and not be taken at face value.

Dr Khoza agreed with Mr Swart, saying the intention was to regulate something that was seen to be wrong. Mr Hlaudi becomes the director in October 2011 and attended Board meetings, but no one knew about his capacity in those meeting. But now it becomes clear he was a director. Something ought to have happened and which the Committee needs to establish.

The Chairperson stated this matter should be parked until more information is gathered. The whole matter raises serious questions and no one seems to give the Committee an answer. The Committee could make a recommendation about its observation and ask that somebody else takes the matter forward. The role of the Committee is not accusatorial.

Mr Swart said if the appointment of the Board was correct according to the Broadcasting Act, Parliament and President, but the submission of documents to CIPRO is not satisfactory, then the Committee should make a recommendation.

The Committee then went through the working draft of the Committee Report, making technical amendents. It was not adopted. The draft Final Report would be presented at the next meeting.

The meeting was adjourned.

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