Edrees Hathurani vs. City Press


Sun, Aug 13, 2017

Ruling by the Press Ombud

13 August 2017

This ruling is based on the written submissions of Messrs Asif Latib and Krian Rathinam of Abbas, Latib and Company, on behalf of Mr Edrees Hathurani, as well as those of Dumisane Lubisi, executive editor of the City Press newspaper.

Hathurani is complaining about a sidebar to a story in City Press of 9 April 2017. The story was headlined Spooks and the race haunt Sars, and the sidebar was titled Sars’ forgotten bling raids.

Complaint                                            

Hathurani complains:

·         it was inaccurate to state that SARS had issued a claim against him, as the claim was against Africa Cash and Carry (ACC) – it was therefore uncalled-for to mention his name in the first place, since he and ACC were two separate entities; and

·         his dignity and reputation were tarnished by a statement that he had paid a Financial Service Board (FSB) executive R12-million to make his tax troubles go away, as it implied that he had paid a bribe.

The text

The article was about troubles at SARS.

The sidebar said (relevant part in full): “Africa Cash and Carry: The eponymous case against a cash retail giant laid bare how double accounting works. The owner, Edrees Hathurani, faced a R1.23 billion claim from Sars, but claimed he had paid a Financial Services Board executive R12 million to make his tax troubles go away. This case is now on the back burner.”

City Press responds

Lubisi says ACC and Hathurani were mentioned in a sidebar which was intended and understood by readers to be a summary of high-profile matters between the revenue service and alleged tax defaulters – it was not intended nor understood to be a detailed exposition of the intricacies involving each of the individuals/entities listed.

He adds the “long-running battles” between SARS and ACC and its associated entities and individuals are in the public domain – it has been widely reported that SARS claimed ACC owed it R1.23 billion in unpaid taxes, and that ACC was guilty of having operated two accounting systems (which the sidebar fairly described as “double accounting”).

The editor says:

·         it appears that Hathurani was closely associated with ACC – he was personally cited in at least one SARS court case, alongside ACC and several other associated entities; he was also described in several media reports as ACC’s “boss” and “chief executive”;

·         Hathurani is mentioned in “just about every story that was published relating to ACC’s tax issues”;

·         it was also widely reported that Hathurani had deposed an affidavit wherein he claimed that he had paid an FSB executive R12-million to stop a SARS audit into the affairs of ACC; and

·         after widespread media coverage on ACC’s disputes with SARS during 2014, little if anything was published on this matter. It was assumed, as was stated in the sidebar, that the case has been put “on the back burner” – which was qualified in the sidebar by stating that “City Press has been unable to find evidence of this pattern of collections continuing under the new (SARS) administration”.

Lubisi argues that, in light of the above, City Press accurately and fairly summarised the events related to ACC, Hathurani and SARS for the purposes intended by the sidebar. “In context it was clear to readers that the alleged tax debt related to ACC, not Mr Hathurani personally,” he adds.

He offers Hathurani an opportunity to correct any misunderstanding which the sidebar might have conveyed.

Hathurani replies

Hathurani emphasizes that the sidebar stated as fact that he had paid a bribe of R12-million, and asks City Press for proof.

He also says the:

·         fact that the allegations were mentioned in a sidebar is irrelevant;

·         expectation of the journalist that readers would understand the sidebar in a specific way is unreasonable;

·         mentioning of his name was unnecessary, as the newspaper still would have got its message across without the use of his name; and

·         statement that the matter was put on the back burner was reckless, as it implied there was no evidence under the new SARS administration.

He adds that he is not the owner of ACC, as stated in the story.

Analysis

Claim against Hathurani

The sidebar said, “The owner, Edrees Hathurani, faced a R1.23 billion claim from Sars…”

Hathurani complains about his name being mentioned at all, as the claim was not against him, but against ACC, and denies that he is the owner of that company.

To get clarity on this matter, I have asked Latib to spell out exactly what Hathurani’s position at ACC is.

Latib duly responded, saying that ACC is owned by four family trusts (namely those of Cassim Aysen, Edrees Hathurani, Mohamed Hathurani and Iqbal Hathurani).

He continued, The CEO, CFO and Financial Director of Africa Cash and Carry was Cassim Aysen during the time the SARS investigation commenced and culminated in the SARS preservation order. Aysen was in charge of the day to day affairs of Africa Cash and Carry.

“Mr E Hathurani is a trustee of the Edrees Hathurani Family Trust and became involved in the management of Africa Cash and Carry after the resignation of Aysen in June 2013.  Mr E Hathurani was subsequently prevented by order of court from acting in any capacity at Africa Cash and Carry from July 2015.

“Africa Cash and Carry was placed under curatorship in July 2014, this order was confirmed in October 2014.”

Given this information, the depiction of Hathurani as “the owner” of ACC (as if that company had only one owner) was not placed in the correct context, as it negated all of the above information. This, in turn, has led to the misleading impression that he personally faced a R1.23-billion claim from SARS (as the only owner of ACC).

On the other hand, though, Hathurani was a co-owner, as he was a trustee of one of the (four) family trusts which collectively owned the company.

It would have been easy to report fairly and correctly on this matter, by merely not saying “the” owner, but “an” owner or “a co-owner”.

Because he was indeed still involved in ACC, I do not believe it was wrong to mention his name – as long as it was clear that he was not the only owner, and that he – as a co-owner – faced a claim against the business (and not in his personal capacity).

This potentially misleading reportage calls for some clarification, but is not so serious that it warrants an apology.

Paying a bribe

The sidebar stated that Hathurani “claimed he had paid a Financial Services Board executive R12 million to make his tax troubles go away”.

Potentially, this issue is of much greater importance as incorrect and / or unfair reportage could have seriously damaged his reputation and dignity.

Lubisi’s argument that this was in the public domain, which justified the sentence in dispute, is weak.

A claim that something is in the public domain and therefore may be repeated in the media should be treated with suspicion and be used with circumspection – as such information may be incorrect. One such case comes to mind, where a newspaper wrote that Mr Julius Malema’s house was worth R16-million – a figure which was in the “public domain”, but proved to be wrong (as shown when I obtained an official evaluation of that property from an architect).

Surely, one cannot rely on an underlying assumption that the media’s reportage on a certain matter has to be accurate just because it was reported.

This brings me to the vital distinction between stating something as an allegation, or as fact.

I note that not a single one of the many examples provided by Lubisi to substantiate the reportage that Hathurani has paid, or claimed to have paid, R12-million to make his tax problems go away was stated as fact – those statements were all reported as allegations, without fail.

The payment was alleged to have been made to Mr Dawood Seedat, former chief financial officer of the FSB.

If the sidebar, then, stated that there had been speculation in the media that Hathurani had paid that amount to Seedat, it would have been in order, because that was true. That, alas, was not reflected in the sidebar, which stated as fact that Hathurani had made such a claim.

But that is not all. The statement in question also seems highly unlikely and indeed not reasonably true – would Hathurani have made such a claim? One which could get him in prison?

This has made me extremely uneasy, especially because Lubisi mentions an affidavit which allegedly would prove this claim – while he did not provide this office with any documentation to this effect.

As I felt like walking on egg shells by this time, I wrote the following e-mail to the editor, asking for some kind of proof to substantiate the statement that Hathurani had made such a claim:

“All the links that you have sent me regarding the payment of R12-million make reference to allegations. The sidebar, though, states it as fact that Hathurani himself has admitted to paying that amount of money.

“That sentence reads: ‘[Hathurani] … claimed he had paid a Financial Services Board executive R12 million to make his tax troubles go away.’

“That cannot be right? He denies it in his complaint, and I cannot find it anywhere that he actually had admitted to paying the R12-million. Or am I missing something somewhere?”

Lubisi replied that the newspaper had used the information contained in the publication ‘Supermarket and Retailer’ (www.supermarket.co.za/news-article.asp?ID=4691&CatTags=17)

However, this article stated that “Hathurani last month alleged that Seedat accepted R12 million from him after threatening to close down his business through a Sars investigation”.

In fairness, I asked Hathurani to comment.

Latib pointed out that the word “alleged” had been used, adding that there was no clear evidence that Seedat had accepted R12-million from Hathurani.

He concluded that the newspaper did not substantiate the claim and argued, “City Press have been completely reckless and irresponsible in the publishing of their article. As they had made a statement without first checking the credibility of their source and secondly following up to enquire as to whether there was any hard evidence which supported the statements made by City press and their sources on Mr Hathurani.”

Finding

Claim against Hathurani

The statement that “the owner, Edrees Hathurani, faced a R1.23 billion claim from Sars” was misleading as it lacked the necessary context. This was in breach of Section 1.2 of the Press Code which states, “News shall be presented in context and in a balanced manner, without any intentional or negligent departure from the facts whether by … summarization.”

Paying a bribe

The statement of fact that Hathurani claimed he had paid Seedat R12-million to make his tax troubles go away, was not reasonably true and it was unsubstantiated, which made it also unfair – and carried with it the real possibility of having caused unnecessary harm to his dignity and reputation.

This statement 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: “Only what may reasonably be true … may be presented as fact…” and

·         3.3: “The media shall exercise care and consideration in matters involving dignity and reputation.”

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 breach of the Press Code regarding Hathurani having:

·         claimed that he had paid Seedat R12-million to make his tax troubles go away is a Tier 2 offence; and

·         been “the” owner of ACC, who faced a R1.23-billion claim from SARS, is a Tier 1 offence.

Sanction

City Press is directed to apologise to Hathurani, without any reservation, for unfairly and without any substantiation stating as fact he claimed to have had paid Seedat R12-million to make his tax troubles go away, which made the reportage also unfair – and carried with it the real possibility of having caused unnecessary harm to his dignity and reputation.

The newspaper is also reprimanded for calling Hathurani “the” owner of ACC, and not referring to him as one of the owners.

The newspaper is requested to publish the:

·         apology on the same page and in the same position as that of the offending sidebar, refer to the reprimand, and use a headline containing the words “apology” or “apologises”, and “Hathurani”; and

·         same text online (if the story appeared there as well).

The text should:

·         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 prepared by the newspaper and approved by me.

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.

Johan Retief

Press Ombud