#JoiningTheDots: US law firm rips open Naspers links to Gupta corruption

EDINBURGH — For a while, there has been a bad smell slowly rising from Naspers as a result of its links to the Gupta family. For example, Esmaré Weideman, CEO of Naspers-owned Media24, was wined and dined by the Guptas, along with a partner, at the three-day 2013 Sun City wedding extravaganza paid for by taxpayers. When Weideman was first asked about her links with the Guptas earlier this year, she told BizNews not to read anything into her attendance. But she never explained why she was invited to a Gupta family wedding. Her boss, Naspers CEO Bob van Dijk, has finally woken up to the reputational risks associated with working with the Guptas. Speaking from Amsterdam today, he told his own news organisation that he is taking revelations about MultiChoice’s payments to the then Gupta-owned ANN7 “extremely seriously“. News24’s #GuptaLeaks report in November detailed how MultiChoice agreed to pay the Guptas’ Infinity Media Networks a “once off” payment of R25m in 2015. MultiChoice also agreed to increase its annual payment for Infinity’s ANN7 news channel from R50m to just over R140m. Multichoice has been criticised for funding a channel with dwindling viewership which essentially became a propaganda machine for the Gupta and Zuma families, reports Naspers-owned Fin24. – Jackie Cameron

*Esmaré Weideman responds:

It is a matter of public record that I attended the wedding, yes. The Gupta family was, at the time, a relatively new entrant to the South Africa media landscape and invited representatives of all the major media companies to the wedding. Media24 attended as a courtesy. Two representatives from Media24 (including me) attended. Several of the large South African media companies were represented.

Response from Multichoice, Naspers:

It is emphatically not true that we haven’t responded to media allegations. We are not “waking up” to anything, our stance has been consistent throughout in that we view the allegations as serious. We re-iterate our position with regards to the recent media allegations against MultiChoice South Africa, Naspers has consistently said:

  1. Naspers takes the recent media allegations about MultiChoice South Africa seriously.
  2. MultiChoice South Africa has many minority shareholders and the responsibility for dealing with the matter lies with the independent MultiChoice South Africa board.
  3. Naspers has confidence in the MultiChoice South Africa board dealing with the matter, following their governance procedures.
  4. Naspers will verify that the MultiChoice South Africa board has addressed the matter adequately.

The MultiChoice Audit & Risk committee has confirmed the action it is taking in response to the allegations in the media. As stated above, once they complete their work following their governance procedures, they will report to the MultiChoice board, and after that has happened the Naspers board will consider whether or not it is satisfied with the action that the MultiChoice board has taken.

By Janice Kew

(Bloomberg) – Naspers Ltd. is being probed by a U.S. law firm over whether Africa’s biggest company by market value was involved in unlawful business practices related to a contract with South Africa’s politically connected Gupta family.

Pomerantz LLP is investigating claims on behalf of investors after Naspers’s TV unit MultiChoice started its own probe into the contract with ANN7, a 24-hour news channel formerly owned by the Guptas. Reports in South African media have alleged that MultiChoice had a corrupt relationship with ANN7, which the family sold earlier this year.

A logo of Naspers Ltd. sits on the side of the headquarters of the Media24 Ltd. building in Cape Town. Photographer: Graeme Williams/Bloomberg

“The investigation concerns whether Naspers and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices,” Pomerantz said in a statement Tuesday.

Naspers investors should contact the firm if they are concerned, Pomerantz said, without saying who had commissioned the company to start an investigation. A phone call to the firm’s New York office wasn’t answered out of business hours.

The probe asks further questions about the involvement of Cape Town-based Naspers in the scandal surrounding the Guptas, who are accused of using their friendship with South African President Jacob Zuma to win lucrative state contracts. U.S. consultancy McKinsey & Co. and auditor KPMG LLP are among international companies to have found that work done for the family had breached corporate governance standards. The Guptas and Zuma deny any wrongdoing.

The News24 website, which is also owned by Naspers, reported last month that MultiChoice increased its annual payment to ANN7 to 141 million rand ($10 million) from 50 million rand, citing leaked emails. MultiChoice, Africa’s biggest pay-TV provider, started its own investigation as its reputation had been damaged by the allegations, it said Dec. 1.

Naspers shares fell 4.1 percent to 3,480 rand as of 2:03 p.m. in Johannesburg, the lowest in more than a month. The stock declined 4.2 percent on Friday, when MultiChoice announced its investigation. The company owns a wide range of media and internet assets around the world, including a 33 percent stake in Chinese giant Tencent Holdings Ltd.

A spokeswoman for Naspers couldn’t immediately comment when contacted by phone.

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