Bophelo Beneficiary Fund, Bongani Mhlanga, Mvunonala Holdings vs. City Press


Sat, Jul 15, 2017

Ruling by the Press Ombud and a Panel of Adjudicators

15 July 2017

This ruling is based on the written submissions of Mr Tshepo Mathopo of Mathopo Attorneys, on behalf of Bophelo Beneficiary Fund (BBF), those of Mr Bongani Mhlanga, CEO of Mvunonala Holdings, and of Dumisane Lubisi, editor of the City Press newspaper, as well as on a hearing held on 29 June 2017 in Johannesburg. Adv L. Hollander represented the complainants, while Mr Willem de Klerk appeared on behalf of the newspaper.

The members of the Panel of Adjudicators who assisted the Ombud were Judy Sandison (media representative) and Carol Mohlala (public representative).

Complaint                                            

BBF et al are complaining about a front-page lead in City Press of 30 April 2017, headlined At least R255m in mine workers’ cash lost in PENSION SCAM – Echoes of Fidentia disaster as Bophelo Beneficiary Fund failure to pay workers pension money leaves families devastated. This story continued on page 2, headlined Asset manager ‘loses’ workers’ pensions.

This story also appeared online.

Also on page 2 appeared a:

·         separate story, headlined Our husbands’ money is gone; and

·         sidebar, headlined What Mvunonala said…

BBF’s main complaint is that the story and its headline infringed on its dignity and reputation by unfairly and without proper substantiation presenting the allegation, as fact, that it had:

·         lost R255-million (suggesting that this had happened either through illegal misappropriation or through the unlawful squandering of funds belonging to widows and other beneficiaries); and

·         “cooked” its financial statements in an attempt to hide the “lost” money (by wrongfully reflecting two “investment properties” worth R255-million in its financial statements, and calling it a “scam”).

They also complain that the:

·         newspaper did not give them a right of reply regarding:

o   the two main issues mentioned above;

o   unpaid beneficiaries; and

o   an investigation by Amplats into BBF; and

·         story did not adequately reflect their response regarding its two “investment properties” and Mhlanga.

Mhlanga complains that the article has:

·         implied that he had a questionable background;

·         infringed on his privacy; and

·         incorrectly stated that he had been deported (as a legal process regarding this matter was pending at the time).

The texts

Pension scam

The main article, written by Sipho Masondo, started off by stating, “In a case reminiscent of the heartbreaking Fidentia scandal, a pension fund administrator has lost R255m worth of mine workers’ money. There are now fears that the amount lost by the Bophelo Beneficiary Fund (BBF) could be as much as R560m – a devastating blow to the families of deceased mine workers who rely on the money to survive.”

Three widows reportedly told City Press that they had been ­battling to feed and clothe their children, and send them to school, “while fund staff come up with excuses”.

Mention was made of the 2007 Fidentia scandal in which the company’s boss had squandered about R1.3bn in investments, “leaving more than 47 000 beneficiaries – mainly mine workers and their families – destitute”.

In this case, Masondo continued, pension money belonging to workers at Anglo Platinum was invested in the BBF, which was administered by Bophelo Benefit Services, a subsidiary of Mvunonala Holdings.

The journalist also reported that, although it was unclear what had happened to the money, a City Press investigation found that, in trying to hide the lost R255m, the BBF “appears to have cooked its financial statements for last year”.

He added that the fund falsely claimed to own two ­“investment properties” in Johannesburg – the Parktonian Hotel in Braamfontein and an ­office block on Grayston Drive, Sandton.

Our husbands’ money is gone

This story related the woes of some beneficiaries who allegedly had not received money for several months from Bophelo Benefit Services (BBS), entrusted with administering pension.

What Mvunonala said…

In the sidebar of 525 words, which exclusively quoted Mathopo, the latter mainly denied that BBF had experienced any financial problems or problems with payments to beneficiaries.

He was extensively quoted on the ownership of the office block on Grayston Drive and the Parktonian Hotel in Braamfontein. The attorney also commented on Mhlanga’s “deportation”, and denied any fraudulent activities on BBF’s part.

CORRESPONDENCE PRIOR TO THE HEARING

The main complaint

R255-million ‘lost’

The first sentence of the story read, “In a case reminiscent of the heartbreaking Fidentia scandal, a pension fund administrator (BBF) has lost R255m worth of mine workers’ money.”

Mathopo says it was immediately apparent from the opening paragraph, as well as from the headline and the sub-headline, that the reportage had been intended to convey the message (stated as fact, not as an allegation) that BBF had either (illegally) squandered or (unlawfully) misappropriated funds belonging to widows and other beneficiaries – reportage which has infringed on the complainants’ dignity and reputation.

He adds that the comparison with the Fidentia scandal in 2007 contributed to the conclusion that the complainant had been guilty of a pension fund scam and that the “lost” money had been unlawfully misappropriated.

The attorney denies that the company has lost R255-million.

Lubisi says the complainants are conflating “lost” with “squandering” and “misappropriation” – the report that BBF lost R255 million does not necessarily mean that the money has been “squandered” or “misappropriated”.

He says companies quite often lose investor funds in a variety of ways, for example through a currency crash (such as in Zimbabwe in 1997) and the “spectacular collapse” of the global economy in 2008, which saw multi-billion financial companies disappear overnight.

“As such,” the editor argues, “the claim that City Press’ report conveyed the conclusion that the trustees of the BBF are guilty of misappropriation should be dismissed because it is not based on fact.”

Mathopo replies that the headline, in using the word “scam”, created the impression that the alleged loss of R255-million had arisen as a result of dishonest, unlawful and fraudulent activities. He argues, “The word ‘scam’ would certainly not give an indication to a reader that the alleged loss could have arisen simply as a result of the complainant making bad investment decisions or that the economy had turned for the worse.”

Cooking of financial statements

The sentence in question read, “Although it is unclear what happened to the money, a City Press investigation has found that, in trying to hide the lost R255m, the BBF … appears to have cooked its financial statements for last year.”

Mathopo argues that this statement, again, unfairly created the impression that BBF was guilty of irregular and untruthful reporting in its financial statements and consequently that it has illegally and unlawfully misrepresented its financial position.

Lubisi replies the newspaper’s investigation did find that the complainants were guilty of untruthful reporting of its financials, based on the following:

·         The BBF’s financials claimed to own a property on Grayston Drive, as well as the Parktonian Hotel – but the company did not own those properties. Even BBF itself acknowledged this by saying it had been in the process of acquiring the properties;

·         The Public Investment Cooperation (PIC), whose reason for existence is to invest the Government Employees Pension Funds (GEPF), told City Press that the building on Grayston Drive was owned by the GEPF. “We had asked the GEPF direct questions about the building’s ownership. If the complainant’s claim that it was in the process of buying the property had an element of truth, the PIC would have told us that it was selling the property to the complainant”; and

·         According to Generally Accepted Accounting Principles (GAAP) the BBF should not have listed the Grayston Drive building and the Parktonian Hotel as “investment properties”.

The editor concludes, “Based on the above, any reasonable person would have arrived at the conclusion that the complainant had ‘cooked its books’.”

Mathopo questions the newspaper’s reasoning. He says City Press apparently simply extracted the amount of R255-million from BBF’s annual financial statements, where that amount was reflected as the value of the property investment funds being administered – not by BBF, but by Mvunonala Properties (MP). He says the financial statements did not show that BBF owned the properties in question, but rather that the figure represented the value of two investment properties in relation to which MP held funds to the value of R255-miljoen.

He asserts, “City Press’ conclusion that the R255-million has been lost is unfounded, unsubstantiated and false. Such a conclusion has been obtained, not by any forensic investigation or by obtaining the views of the financial directors or accountants of the complainant, but by simply plucking a figure out of the financial statements and portraying that as an amount which has been lost… These allegations … are, at best, founded on opinion, allegation rumour or supposition and are made in circumstances where City Press could, and should have, verified the truth of such statements.”

Questions and Answers

No right of reply

R255-million ‘lost’; books cooked

Mathopo says the journalist did not ask BBF about the so-called “lost” money and the “cooking” of the books to cover it up, even though those accusations were extremely serious as they amounted to theft, fraud, corruption and forgery.

He does admit that the journalist touched on the “cooking” of books – but says that was in the context of “if BBF does not own the properties as reflected in the financial statement, then it would appear that the financial statements are cooked”. He argues that this was “quite distinct” from the accusation that “one’s financial statements were inaccurate in order to hide the theft of R255 million…”

Lubisi says the journalist asked the complainant that, since the fund could not list the properties as “investment properties”, how then did it account for the R255-million, which appeared on its balance sheet; he also asked if the complainant had cooked its books, because it was clear that the fund didn’t own the properties.

He argues, “The question about the cooking of the books relates to the R255 million which the complainant could not account for. To drag the argument to its logical conclusion: the complainant should have known that since City Press was alleging that the fund didn’t own the properties, it stands to reason that we also had problems with the fund claiming in its financials to have invested R255 million in ‘investment properties’. Naturally, this would mean that claiming to own properties that you don’t in your financials amounts to ‘cooking books’. The upshot is that the complainant, as any reasonable person would have, should have taken upon itself to clear insinuations from our questions that the R255 million was not there, which is why the books had to be cooked.”

The editor adds it is clear that the complainant wanted to be asked questions about the misappropriation or stealing of R255 million. “Once again, our story did not accuse the complainant of neither stealing, nor misappropriating any monies,” he remarks.

Mathopo insists that the journalist did not mention the figure of R255-million in his questions to the company. He denies that the questions related to the R255-million which “the complainant could not account for”. He adds that BBF has explained why the investment properties, and their value of R255-million, had been reflected in the financial statements as they were.

The attorney also rejects Lubisi’s argument that the story did not accuse the complainants of misappropriating any monies. He argues the import of the article was that the complainants were involved in a pension fund scam in which R255-million of pension fund money had gone missing – and to cover up for that loss, BBF cooked its books.

Beneficiaries; Amplats

Beneficiaries: Mathopo says the story referred to three people who were beneficiaries and had allegedly not been paid by BBF. On learning that Masondo was doing a story on beneficiaries, BBF requested him to provide it with information so that it could respond properly to the relevant questions – this, the attorney says, the journalist failed to do.

Amplats: The attorney says the journalist stated as fact the version by Amplats Group Provident Fund (AGPF) that BBF had failed to provide it with information about the fund’s compliance with matters relating to health and the law. The text also stated that preliminary results had revealed non-compliance with regulations and a possible breach of governance procedures – however, the reporter did not ask BBF or BBS to comment on this issue.

Lubisi says that, while City Press had not asked any questions specific to the beneficiaries, the journalist did ask whether BBF was experiencing financial problems. He says the complainant denied that there were any financial problems, despite knowing that many of its beneficiaries had not been paid. He argues, “Had the complainant been honest, it would have acknowledged that it had not paid beneficiaries because of one reason or the other.”

The editor notes that the complainant takes issue with City Press’s claim that AGPF had launched an investigation into allegations of non-compliance. The complainant seems to suggest that AGPF did not institute a probe into BBF. Moreover, City Press reported the complainant’s response that “there had been no problems with payments to beneficiaries”. This particular sentence is critical, it puts paid to insinuations by the complainant that City Press’s intention was to ambush and injure and tarnish its reputation.

Lubisi asks whether the complainant had not been approached by WMK Matlala Attorneys, which was appointed to investigate allegations of non-compliance, and by KPMG, which was appointed by AGPF to investigate allegations of non-compliance.

Mathopo replies the journalist asked questions about beneficiaries on a previous occasion, and the complainants then requested the reporter to supply them with details of beneficiaries who had not received payment – which never happened.

He adds Lubisi incorrectly said the complainants suggested that AGPF had not instituted a probe into BBF.

The attorney refuses to respond to the editor’s questions, saying that the newspaper should have asked those questions prior to publication.

Responses not (adequately) reflected

Mathopo says City Press asked 21 questions regarding the way in which these properties were reflected in BBF’s financial statements – which were “comprehensively answered”. Yet, the journalist unfairly excluded this explanation on the front page “and accordingly BBF’s version to counter the factual statement that the fund has falsely reflected properties in its financial statements was not conveyed to the public”.

He admits that the newspaper did cover BBF’s response to a certain extent – but says that was done in a “follow-up article” on page 2. The online versions also carried “nothing to connect the two articles”. He notes that a reference to the story on page 2 was made at the bottom of the front page – but he argues that incorporating some of BBF’s comments in a “secondary” story did not diminish the damage and unfair reportage of the “primary” article on the front page.

He says that in the online version, the reader was not even referred to the “secondary” story “and accordingly would believe that the factual statements in the main article were true, verified and uncontested”.

The attorney also notes that BBS’s denial that any of the entities falling under Mvunonala Holdings had been registered without due compliance (as suggested in the article) was not published. He argues, “The implication is that the version that the companies will be deregistered because they were set up using fraudulent documents conveys the inevitable implication that such a statement is in fact true.”

Regarding Mhlanga, Mathopo says while the newspaper did ask questions about the status of his alleged deportation, the story did not reflect that a legal process was pending between him and the Department of Home Affairs. Instead, Mhlanga’s honesty and status as a businessman were “severely impaired and prejudiced” by insinuations that he had previously been employed by Mantadia Asset Trust Company – which was involved in the Fidentia scandal in 2007.

Lubisi replies that City Press published the response on page 2. He says, “The complainant is under the misguided and unreasonable impression that its response should have been on the front page. The story started on page one and ended on page two, as such there would have been nothing wrong with publishing the complainant’s response on page 2.”

He adds the complainant has erroneously concluded that the articles on page 2 were “follow-ups” or “secondary articles” – all the reports which appeared on page two, the editor says, were part and parcel of the story which started on page one and ended on page two.

Mathopo rejects Lubisi’s argument that the newspaper adequately reflected the complainants’ views. He says it was only on page 2 that a selective part of the responses was published – and these responses would in any case not have convinced readers that the complainants were not guilty of the allegations made against them.

Mhlanga

Questionable background

Mhlanga complains that, by reporting that he had previously been employed by Mantadia Asset Trust Company, which had been involved in the Fidentia scandal in 2007, he had a questionable background.

Lubisi replies it is a fact that Mhlanga had been employed by Mantadia. He argues, “It was very fair and necessary for City Press to report that a man who worked for Mantadia, which lost over a R1 billion worth of pension funds, is now involved in another company whose financials are under suspicion.”

Privacy

Mhlanga complains that the reporting of details of his properties, including a street address of one of them, as well as a picture, have breached his privacy and tarnished his reputation and dignity.

Mathopo argues, “It is submitted that the purpose of this detail is to suggest that money has been appropriated illegally by Mhlanga in order to purchase such properties. This is both unfair and without basis.”

Deported

The article stated, “Earlier this month, the department of home affairs deported ­Mhlanga … back to his home country, Zimbabwe. Home affairs spokes­person David Hlabane said Mhlanga was deported because ‘he was in the country illegally and with fraudulent ­documents’…  After he was deported, Mhlanga resigned as the company’s group chief executive.”

Mhlanga denies that he had been deported, as a legal process was pending between him and the Department of Home Affairs.

Lubisi says Mhlanga’s deportation is not “alleged”, as suggested by the complainant – it has been confirmed by the Department of Home Affairs. The department did not tell City Press about any “pending legal processes”. In any case, City Press reported that the complainant said there was a “legal process”.

ANALYSIS

The main complaint

R255-million ‘lost’; financial statements ‘cooked’

The context

The specific statements in dispute read:

·         “[BBF] has lost R255m worth of mine workers’ money”; and, “in trying to hide the lost R255m”; and

·         “… the BBF … appears to have cooked its financial statements for last year.”

BBF’s main complaint is that the story infringed on its dignity and reputation by unfairly and without proper substantiation:

·          reporting as fact that it had lost R255-million (either through illegal misappropriation or through the unlawful squandering of funds belonging to widows and other beneficiaries); and

·         alleging that it had cooked its books in an attempt to hide the fact that that money had been lost (by wrongfully reflecting two “investment properties” worth R255-million in its financial statements).

The complaint had more flesh to the bone than just the above, though, as the:

·         story twice referred to a scandal (the “heartbreaking Fidentia scandal”); and

·         headline used the word “scam” in connection with the pension fund.

It is in this context that the “lost” R255-million and the apparent “cooking” of the books should be interpreted.

‘Investment properties’

City Press linked the “lost” money to the item in BBF’s financial statements listing the amount of R255-million as “Investment properties”.

The issue was that, by its own admission, the properties in question did not belong to BBF at the time they were listed as such. The company’s explanation was that the R255-million was “earmarked” for buying the properties, and that it was held in trust for that purpose.

It was noticeable that the words “Investment properties” were accompanied by a star (*). However, Hollander could not explain what this sign referred to, even though it must have been there for a reason (which might have shed some light on this matter).

Be that as it may, given BBF’s insistence that the money had not been lost, the panel believed it was justified to ask the company for some form of documentation confirming that the money was safe and available for the stated purpose. Hollander indicated that he would take instructions from his client in this regard, but he never reverted to the panel.

The panel is not going to jump to any conclusions as to why BBF failed to make use of this opportunity to clear its name.

Was the reportage justified?

Lubisi’s argument that the “lost” money did not necessarily mean that it had been squandered or misappropriated is neither here nor there – the fact remains the story stated as fact that the money had gone missing and, given the context as pointed out above, it hardly matters just how or why this money went missing.

The central issue in this regard is that BBF’s financial statements reflected assets worth R255-million in “investment properties” while the properties did not belong to that company (but, instead, to the Government Employees’ Pension Fund).

This is a fact; how one interprets it, is another matter.

City Press is convinced this means that the fund falsely claimed to own two ­“investment properties” (and therefore that the money went missing, which is why the books were cooked).

The panel members are first to admit that we are not specialists in accounting and therefore are not able to ascertain whether the money was in fact lost – which, in any case, would fall outside our mandate.

We are willing to say, though, that we do not blame City Press for being suspicious – in fact, we commend the newspaper for taking its role as a watchdog seriously.

However, we also believe the newspaper took it one step too far, as the notion that the money had been lost was an inference or a conclusion – there indeed is no concrete proof that the money went missing. Therefore, the story should not have stated as fact that the money was missing; instead, it should have asked, “Where did the R255-million go?” If satisfactory answers were not forthcoming, then the journalist could have proceeded to report the allegation that it was lost.

The problem, though, is that the question mark became an exclamation mark.

Please note: While the panel is not saying the money is lost, we are also not saying it is not lost. What we are saying is that, at the time of publication, the newspaper was justified to ask the question, but not to state it as fact.

In other words: The panel is not in a position to decide whether the statement about the “lost” millions was accurate or not; we can, however, say that to present a question or claim as fact, at the time of publication, was unfair to BFF.

Questions and Answers

The panel now turns to the question of whether City Press gave BBF a right of reply to material issues on which it reported, as well as to the other side of that coin, namely whether the journalist omitted essential information provided to him by BBF.

No right of reply

BBF complains that City Press did not ask it about the R255-million at all, and also did not adequately address the allegation that the financial statements were “cooked”.

R255-million ‘lost’

Regarding the item of “investment property”, Masondo asked BBF how it accounted for the R107.4-million or R120.2-million (amounts rounded off) with reference to the two properties respectively, adding that a detailed response was necessary to avoid confusion.

In other words, his question to BBF amounted to R227.6-million – approximately R27.4-million short.

While this is not insignificant, the panel also has to look at the nature (the “quality” and the quantity) of the related questions.

Amongst the 21 questions Masondo put to BBF regarding the properties, he inter alia asked:

·         “Does a building which is leased from a landlord (referring to the office block on Grayston Drive) qualify as an ‘investment property’?”

·         “If the BBF is leasing the property … it means that you are paying rent … clearly this cannot be classified as an investment property?”

·         “If the BBF doesn’t own this property, it would appear that the books were being cooked?”

From these, and other, questions, it should have been clear to BBF that the matter was urgent and required detailed responses.

It is true that the amount of R255-million should have been mentioned specifically, but it can also be argued that the urgency of the matter was the same – even with an amount of R27.4-million less. This consideration will reflect in the “Seriousness of Breaches” below.

Books ‘cooked’

Masondo asked, if the BBF did not own the properties, “it would appear that the books were being cooked?”

He used a question mark and, given the urgency of his other questions, the panel believes that his questions (he asked this twice) should have made BBF aware of the seriousness of his enquiry.

The panel submits that these questions, together with the rest of the quite long list of questions, afforded BBF with a reasonable opportunity to respond to allegations of the cooking of its books.

So therefore, it is a qualified “yes” to the complaint about the R255-million, and a definite “no” to the cooking part.

Unpaid beneficiaries

The panel notes that BBF asked City Press to provide the company with names of such people, which the newspaper refused – arguing that BBF knew about the problem and that it was not the newspaper’s job to give it any information.

The panel does not blame the newspaper for this editorial decision.

However, while it was not necessary for City Press to provide BBF with names and contact details, the journalist should specifically have asked the company about this matter, especially as the second story was entirely devoted to people who alleged they were suffering because they did not receive their pension fund payments.

Amplats

 The main story devoted a whole section to this matter, 333 words. The following was inter alia reported:

·         “A senior AGPF official said: ‘… We discovered that about 2 000 ­beneficiaries [of deceased mine workers] who had come of age had not been paid’ ”;

·         “We asked Bophelo why, and they told us that they couldn’t trace them. In December and January, we started engaging with Bophelo, but it was all to no avail”;

·         “The AGPF now fears that the BBF will not be able to account for the money. ‘In fact, we are told that there may be nothing left in the fund,’ the official said”;

·         “The responses we received (from BBF) failed to ­[satisfy us]”;

·         The audit firm KPMG and the law firm WMK Attorneys were contracted to conduct a formal forensic investigation; and

·         “Preliminary results have revealed noncompliance with regulations and a possible breach of governance procedures”.

These, and other, issues called for comment from BBF, but for some reason City Press did not ask the company for its comments on these issues. It surely should have.

Responses not (adequately) reflected

The question now is whether Masondo adequately reflected BBF’s responses regarding its two “investment properties” and Mhlanga.

‘Investment properties’: In the sidebar headlined What Mvunonala said… City Press devoted approximately 300 words to BBF’s response to this matter. Mathopo reportedly said inter alia that the:

·         Fund was still in the process of “executing both deals”;

·         purchase was going to be done after completion as it would present good value for the investor;

·         funds were still held by Mvunonala Properties with the aim of executing both deals; and

·         funds have been properly audited, every cent being fully accounted for by the three parties who have a direct agreement with the Fund.

Having compared this reportage with BBF’s reply to Masondo’s questions, the panel is satisfied that City Press has adequately reflected the company’s responses – most of those were reported, and the published text did not leave out any matter of material importance.

Mhlanga: BBF’s complaint that the story did not reflect its response that a legal process was pending between Mhlanga and the Department of Home Affairs is not correct. The sidebar quoted Mathopo as saying on Mhlanga’s deportation, “There is currently a legal process pending between Mhlanga and the department of home affairs. Under the circumstances, we are precluded ... from providing a detailed response.”

Other considerations: The fact that BBF’s responses were not reported on page 1 is neither here nor there – its views were extensively reflected on page 2, and quite prominently. The complaint that there was no “link” between the stories cannot hold water – the layout of the reportage more than sufficiently accounted for this “link”. At the hearing, City Press conceded that there was no clear link between the online articles – as it should have done in the first place.

Mhlanga

Questionable background

The Press Appeals Panel has formerly ruled that a publication cannot be held accountable for inferences made by the public if the information reported was true.

Lubisi’s argument is sound as Mhlanga, who had been in some way or other involved in Fidentia, was now involved in another company whose financials are under suspicion. Whether this suspicion will prove to be correct or not, is not relevant – what is important, is that sufficient grounds existed for the suspicion of wrongdoing.

Infringing on privacy

The story said, “Mhlanga owns a string of properties in South Africa – including a palatial home on Umhlanga’s exclusive Ridge Road with a view of the Indian Ocean. Deeds office searches also revealed that he owns another home in the expensive Meyersdal Eco Estate in Alberton, south of Johannesburg, where properties are on the market for between R7m and R25m. Mhlanga also owns two other homes: in Mulbarton, south of Johannesburg, and in Boksburg, east of Ekurhuleni.”

Section 3.1 of the Code of Ethics and Conduct states, “The media shall exercise care and consideration in matters involving the private lives and concerns of individuals. The right to privacy may be overridden by the public interest.”

The panel now has to weigh up two conflicting principles (privacy vs. public interest), to see which carries more weight.

In doing so, we have to determine to what extent Mhlanga’s privacy might have been invaded, and if and why this was in the public interest. It speaks for itself that the more privacy was invaded, the more weight public interest should carry if it is to outweigh its “opponent” – and vice versa.

The references to the Meyersdal Eco Estate in Alberton, Mulbarton and Boksburg can hardly be seen as an invasion of Mhlanga’s privacy, as they are much too vague.

The only exception is Umhlanga, where the story added that his house was in Ridge Road (which is quite long). A picture of this house accompanied the text.

This picture had been taken from the street, with the sea visible over the top of the roof. The house itself is barely visible, as the picture mostly features the roof. No street number is visible.

The panel believes it is possible for someone who really wanted to trace the house to do so – but that would take a special effort.

The crux of the story, which concerns the financial status of BBF and affects people who are dependent on the payout of pensions, is such that the public interest easily outweighs this possible invasion of privacy.

Deported

The panel notes that the newspaper did report Mhlanga’s denial; we also take into account the credibility of the newspaper’s source in this regard.

Finding

The main complaint

R255-million ‘lost’

The story reported the opinion / supposition that BBF had lost R255-million as fact, and called it a “pension scam” in the headline. This was in breach of the following sections of the Code of Ethics and Conduct:

·         1.1: “The media shall take care to report news … fairly”;

·         1.3: “…Where a report is not based on facts or is founded on opinion, allegation, rumour or supposition, it shall be presented in such manner as to indicate this clearly.”

Financial statements ‘cooked’

This part of the complaint is dismissed.

Questions and Answers

No right of reply

R255-million ‘lost’: City Press’s question about the “lost” R255-million was not quite adequate, and was in breach of Section 1.8 of the Code that states, “The media shall seek the views of the subject of critical reportage in advance of publication…”

Books ‘cooked’: This part of the complaint is dismissed.

Beneficiaries: City Press should have, but neglected to ask BBF about the alleged non-payment to beneficiaries, especially as a whole article was devoted to people who alleged that they were suffering because they did not receive their pension fund payments. This was in breach of Section 1.8 of the Code.

Amplats: This part of the complaint is dismissed.

Responses not (adequately) reflected

This part of the complaint is dismissed.

Mhlanga

Questionable background

This part of the complaint is dismissed.

Infringing on privacy

This part of the complaint is dismissed.

Deported

This part of the complaint is dismissed.

Seriousness of breaches                                  

Under the headline Hierarchy of sanctions, Section 8 of the Complaints Procedures distinguishes between minor breaches (Tier 1 – minor errors which do not change the thrust of the story), serious breaches (Tier 2), and serious misconduct (Tier 3).                                              

The reporting of the opinion / supposition that BBF had lost R255-million as fact, as well as the failure to ask BBF about the alleged non-payment to beneficiaries, were both Tier 2 offences.

The not-quite adequate question about the “lost” R255-million was a Tier 1 offence.

Sanction

City Press is:

·         directed to apologise to the complainants for:

o   unfairly reporting the opinion / supposition as fact that BBF had lost R255-million;

o   using the words “pension scam” in the headline; and

o   neglecting to ask BBF about alleged non-payment to beneficiaries; and

·         cautioned for not specifically asking BBF about the amount of R255-million which was reportedly lost.

The newspaper is requested to publish:

·         a kicker on the front page, above the masthead, with the words “apology” or “apologises”, and “BBF” or “Bophelo”, and referring to page 2;

·         a summary of the finding, starting with the apology and putting the matter in context, on the top half of page 2, with a headline also containing the words “apology” or “apologises”, and “BBF” or “Bophelo”; and

·         the same text online.

The text should also:

·         be published at the earliest opportunity after the time for an application for leave to appeal has lapsed;

  • refer to the complaint that was lodged with this office;
  • end with the sentence, “Visit www.presscouncil.org.za for the full finding”; and
  • be approved by the panel.

Addressing on sanction

Section 5.5 of the Complaints Procedures reads, “At the conclusion of a hearing, and after a Panel has reached a decision, both parties shall be entitled to address the Panel, personally or in writing, on sanctions and where appropriate mitigation.”

This section should not be confused with an appeal – it merely gives each party an opportunity to address the panel on the sanction itself. The opportunity to appeal, either the finding or the sanction, remains open for the next seven workings days, as outlined below.

Appeal

The Complaints Procedures lay down that within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.

Carol Mohlala (public representative).

Judy Sandison (media representative)

Johan Retief (Press Ombud)