Gravitate MVC and David Mortimer vs Sunday World


Wed, Dec 2, 2020

Finding Complaint 8250

Date of Article: 19/7/20 (print)/ 21/7/20 (online)

Headline: TV presenter kicks up a BEE fronting storm (print)/ Thabang Masanabo in BEE fronting storm (online)

Author: Aubrey Mothombeni

Page:

Online: Yes

Particulars

This finding is based on a written complaint from Adv Lesetja Malope who represented Mr Mortimer and Gravitate, a written response from the then editor of the Sunday World, Makhudu Sefara, further documentation from a new attorney representing Gravitate MVC, Mr China Mathebula, including email records of questions asked and answered and financial documents, and the original complaint to the BBBEE Commission from the acting editor of the Sunday World, Kabelo Khumalo.

Complaint

Mr David Mortimer, a director of Gravitate Multi Video Content and Mortimer Harvey (MH), has complained about an article published in the Sunday World under the headline, ‘TV presenter kicks up a BEE fronting storm’, on several grounds.

He says not all the allegations printed in the article were put to him, and where they were, his specific responses were not used even though he had “taken the trouble” to respond to them.

Some of the allegations were answered with documents, but printed in any event, resulting in inaccurate and untruthful reporting.

Some of the claims in the story were not verified, and the sub-head of the print story: “Masanabo sidelined by minority owners” was misleading in that it put an allegation as a fact.

Specifically the clauses of the Press Code he complains of are the following:

The media shall:

  1. take care to report news truthfully, accurately and fairly;

1.2 present news in context and in a balanced manner, without any intentional or negligent departure from the facts whether by distortion, exaggeration or misrepresentation, material omissions, or summarization;

1.3 present only what may reasonably be true as fact; opinions, allegations, rumours or suppositions shall be presented clearly as such;

1.7 verify the accuracy of doubtful information, if practicable; if not, this shall be stated;

1.8 seek, if practicable, the views of the subject of critical reportage in advance of publication, except when they might be prevented from reporting, or evidence destroyed, or sources intimidated. Such a subject should be afforded reasonable time to respond; if unable to obtain comment, this shall be stated; and

10.1 Headlines, captions to pictures and posters shall not mislead the public and give a reasonable reflection of the contents of the report or picture in question.

  1. Text

1.1 The print story ran under the headline, ‘TV presenter kicks up a BEE fronting storm’ with a sub-head, ‘Masanabo sidelined by minority owners’. The online story is substantially the same but does not have the sub-head.

1.2 The intro to the story reads: “A R50-million Absa-appointed BEE supplier Gravitate Multi Video Content, has been rocked by fronting allegations, fraud charges, claims and counter claims of breach of competition clauses among its partners.”

1.3 It reports that TV presenter Thabang Masanabo and her husband Johannes are “caught in the middle of the drama” over control of the company. Their company, Thape Media, was brought in as a BEE partner and given a 51% share in Gravitate by the minority shareholders, David Mortimer, Denys Webb and Gerald Harvey. “The awarding of the stake was to satisfy the requirements of a R10-million a year five-year contract with Absa.”

1.4 It says Masanabo’s “battle with Gravitate” follows a departure from the same firm by another TV personality, Minnie Dlamini and her husband Quinton Jones, Gugu Madlala and Boitumelo Peter who sold their 51% shareholding back to the company for R1.2m

1.5 Masanabo and her husband have filed a complaint with the Broad-Based Black Economic Empowerment Commission against the three Gravitate directors, Mortimer, Harvey and Webb. They had accused them of “frustrating their efforts to exercise control over the running of the company.”

The complaint, according to the article, claims the Masanabos had no control over the financial affairs of the company, that the bank signatories were executives “loyal to Harvey and Mortimer” who made payments without their authorization and that they earned less than them.

It is dated June 9, 2020.

1.6 They also complained that “funds amounting to R614 000 were fraudulently transferred out of the company as loans to an entity owned by Harvey and Mortimer (called MH) without any loan agreements or payment terms. These amounts were later written off without being paid back.”

It notes the Masanabos have laid fraud charges against the three directors.

1.7 The complaint also accuses the three of “fronting, alleging that the entire company appears to have been structured to benefit the minority shareholders instead of the majority shareholders.”

1.8 The article, citing the complaint, says that “at least” three companies had been awarded the 51% shareholding and all of them including Dlamini’s firm had left before the contract expired.

1.9 The complaint also queried other loans such as one for R1.6m from a company owned by Lynne McKenzie, described in the article as “Mortimer’s lover.” This loan had no agreement or payment terms and Mortimer had not disclosed his relationship with McKenzie, according to the  complaint, nor that Mortimer and Harvey were directors in her company.

1.10 The article quotes Mortimer as saying he was aware of the complaint laid by the Masanabos but added “the allegations were falsehoods”. He said he would provide the commission with “relevant documents to prove that the fronting allegations were not true.”

1.11 He also said that the “minority shareholders” and Thape Media (the Masanabos’ company) were “locked in arbitration” over breach of competition clauses, stating that the two were dedicating 90% of their time to running their company and neglecting their fiduciary duties as directors of Gravitate”

He said the Masanabos took all the decisions on finance and operations so it was not true that they had no control over the company.

1.12 He also confirmed that he and McKenzie were “romantically involved for 22 years” and confirmed that McKenzie’s company had loaned Gravitate R1.2m, but said the relationship and loan were declared to Thape Media.

He said he had not been contacted about “fraud charges”.

1.13 The article cites him “dismissing” claims that the minority shareholders earned more than the majority.

1.14 However, the newspaper adds, “email exchanges between him and Johannes Masanabo show that Mortimer, Harvey and Webb earned R401 000 compared to Thape Media’s R331 000.”

1.15 It reports that Masanabo declined to comment.

  1. The arguments

Adv Lesetja Malope for Mr Mortimer

2.1 Adv Malope, representing Mr Mortimer, argues that not all the allegations mentioned in the article were put to him.

In some cases, specific responses were not printed, only a general response to the complaint laid with the BBBEE commission that the allegations were “falsehoods”.

2.2 He says this is a “major concern as Mr Mortimer took the trouble to respond to the allegations and the journalist opted to ignore those responses and instead detail only the allegations.”

Among these were that:

  • Bank signatories and executives loyal to Harvey and Mortimer made payments without clearing them with the Masanabos.
  • That the Masanabos earned less than the minority shareholders
  • That the R1.6m loan from Lynne Mackenzie’s company “had no agreement or payment terms”. He says a copy of the loan agreement was provided to the journalist. “He conveniently opted to leave out that part as it would taint his chosen narrative and weaken the story.”

2.3 He says the sub-head is misleading as it is an allegation yet it is put as a fact.

2.4 On the reporting of the departure from Gravitate by Minnie Dlamini, her husband, Quinton Jones, Gugu Madlala and Boitumelo Peters, who sold their shareholding back to Gravitate for R1.2m, he asks what the source of this allegation is, as the other allegations were sourced to the complaint before the BBBEE commission. He also asks whether this was “verified or was it another opportunistic namedropping and reiteration of falsehood.”

Mr Mortimer had answered “insinuations” about Cherry Moon (Dlamini’s company) and Inure (another company with which a deal fell through – examined later in the Analysis section), but his responses were not published.

2.5 The journalist was also told that Ms Mckenzie was Mr Mortimer’s wife “and yet he opted to refer to her as just his lover.”

2.6 He asks for a correction of the “false information”, “since the journalist was given the right information and furnished with evidence but ignored it” and an apology.

Mr Makhudu Sefara for Sunday World

2.7 Mr Sefara, who has since left Sunday World for the Sunday Times, responded to the complaint.

2.8 He says all “relevant claims” were put to Mr Mortimer.

The argument that Mr Mortimer was not given an opportunity to respond to allegations, or that when he did his responses were ignored is “baseless”.

2.9 He says the story was based mainly on a complaint filed by Thape Media with the BBBEE commission. This was the source of most of the allegations, and Mr Mortimer was asked questions based on these allegations.

He “provided broad and specific answers”. He (Mortimer) dismissed the BBBEE complaint as a “repository of falsehoods”, which response was reflected.

Some of his responses were “irrelevant” to the questions asked “and some documents he sent did not speak to the questions…” For example, he denied that the minority shareholders were benefiting more than the majority shareholders “while the papers he sent us showed otherwise.”

2.10 On the allegation that the bank signatories were executives “loyal” to Mortimer and Harvey, Mr Sefara replies that four Mortimer Harvey employees were signatories on the Gravitate bank account. The majority shareholders (the Masanabos) wrote to Absa asking that the Mortimer Harvey employees be removed as signatories from the bank account, but this was not done.

He names the bank “users” as Scot Aitken, manager at Mortimer Harvey and Andrew Fradd, MH MD; and “bank account operators” as Gillian Fish and Lynne Harvey, the MH Financial Director.

2.11 He cites an email from Thabang Masanabo to Dave Mortimer, Denys Webb and Gerald Harvey dated 5 May 2020. In it she enquires why “normal month end processes concerning payments to staff and suppliers” were not followed this month.

2.12 She spells out the month-end process since an “accountant service provider” named Kolano was contracted. These include developing a list and sending it to “us as the CEO and COO for approval”; after approval it is sent to “Lynn” (presumably Ms McKenzie) for processing.

Instead, charges the email, “you decided to use Lynn, the Mortimer Harvey FD to decide which payments Gravitate should make and prioritize” without their approval.

2.13 Further, says Mr Sefara, the “sidelined majority owners (the Masanabos) objected to some suppliers because they seemed irregular and were not commissioned by them”. They indicated that some were Mortimer Harvey suppliers, who were paid by their FD “despite the majority shareholders’ objection.” This was queried with Mortimer “who in this application feigns surprise.”

2.14 The email lists various creditors to be paid including Mortimer Harvey House (presumably rental). Next to some there are red “Ys” for “yeses”. The rental does not appear to be approved.

It is not clear from the email list who is approving payments.

2.15 On the claim that the Masanabos earned less than the minority shareholders, he provides a document that he says was “sourced internally” that shows a list of salaries paid: To “Jo and Thabang” the total amount is R331 250; to “Dave, Gerald and Denys” the amount is R401 739.

2.16 On the R1.6m loan agreement that Mr Mortimer says was provided to the journalist and that he “conveniently opted to leave out...”, Mr Sefara responds: “This is a claim contained in the complaint sent to the BBBEE commission. The Masanabos said even if the agreement existed, they had not seen it. Since joining in 2019, the majority shareholders have never been provided with lease agreements, terms of the loan or payment terms, interest. We have never seen it despite requesting for any such document. If it exists, it was never disclosed.”

2.17 On the complaint about the sub-head being misleading as it presents an allegation as fact, Mr Sefara responds: “This is a fact, decisions on equipment, rental, service providers are made by the minority shareholders without the majority shareholders taken into consideration, according to Thape.”

2.18 In response to the complaint about the reference to Minnie Dlamini’s company (Cherry Moon) exiting the shareholding arrangement for R1.2m and Mr Mortimer’s request for a source and claim that this was not put to him, Mr Sefara replies: “Mortimer was asked detailed questions about Cherry Moon including the R1.2 million payment made to the company co-owned by Minnie Dlamini, Gugu Madlala and Quinton Jones. He confirmed these details but said they were buying their shares, not buying them out of the company. We spoke to a source within the company, who confirmed that they ran into troubles similar to what Thape Media experienced, and they chose to accept the money and walk away. As a matter of fact, when we spoke to businesswoman Khumoetsile Moetse, who was also brought into the same Absa deal, she confirmed that she walked away from the deal with these three directors because of problems not too dissimilar with what the Masanabos are dealing with. In an email, Moetse accused the minority shareholders of fronting a week after this story was published. ..’I am certainly not the right black partner to front this deal for Gravitate. I am seasoned entrepreneur who is committed to building a clean and sustainable business with the right partners…” [1]

2.19 “In the end, what we have here are three sets of black partners who have accused Mortimer and his partners of violating the country’s laws and or regulations. The last of these three is the Masanabos, who not only went to the BBBEE commission, but also opened a fraud case against Mortimer, confirmed by police.”

2.20 In response to Mr Mortimer’s question about whether the allegations relating to the history with Minnie Dlamini were verified, Mr Sefara replies: “The BEE allegations were based on the BEE complaint lodged with the BBBEE commission by the current Gravitate shareholders…  We …spoke to a source who worked closely with Dlamini who explained similar concerns and their need to accept the (R1.2m) payment and walk away from a R50 million deal with Absa. They are not at liberty to speak on the record without breaching confidentiality clauses.”

2.21 In response to the claim that Mr Mortimer’s responses to the “insinuations” about the history with Cherry Moon and Inure were not published, Mr Sefara replied that the story “makes absolutely no mention of Cherry Moon” or Inure. The comment, he says “is beyond comprehension”.

2.22 On the complaint that Mr Mortimer told the journalist that Lynne McKenzie was his wife “and yet he opted to refer to her as just my lover”, Mr Sefara replies: “ I don’t know which provision of the press code was breached here. Is there harm caused in referring to someone in a love relationship with Mr Mortimer as his lover? Well, I can’t conceive of any. Nor an established naming convention that has been violated. And, on the facts, there’s no mention in his email response where he said she was his wife. None. But, again, even if there was, what code did we violate?”

Further arguments

2.23 Mr Mortimer’s representative responded to Mr Sefara’s points as follows:

On the argument that not all the allegations were put to him, he asks that if “most allegations” were sourced from the complaint, where did the rest come from?

He says that even if the journalist did “not like” the response, it was still a response and should not have been disregarded.

2.24 On the bank signatories and the email from Thabang Masanabo to Mr Mortimer, he replies that “none of what is mentioned says anything about loyalty of the signatories”. He also claims the information about payments was not verified.

He provides financial statements to show that “the only people who received multiple payments were the Masanabos”.

2.25 He provided four annexures to illustrate his points. Annexure A comprises an email string from December 2019 where Mr Mortimer says he will bill Gravitate for only 40% of his time over the previous year amounting to R140 000 with a further R50 000 “for Gerald’s time for the year”. In an email dated 11 December 2019, he writes: “We thank you for [the] kind consideration to remunerate our inputs during the year. We would prefer, however, to draw any payments into our personal accounts and would be grateful if you could rather direct those allocated funds to any Gravitate SARS commitments and if funds remain to rather direct payments to rental for MH House.

Annexure B comprises a list of loans to and from Gravitate at the year ending March 2020. These involved loans to Thape Media, to Jo Masanabo and to Gravitate Investment Property.

It also includes the loan from Lynne McKenzie to the company (which he says later  was to buy out Cherry Moon) which, with interest, was R1.6m.

Annexure C shows a schedule of “salaries, emoluments, loans” made to directors and shareholders from January 2019 to March 2020.

In total it shows ‘drawings’ of R175 000 to Jo Masanabo plus a R5 000 loan, R220 000 to Malebogo Masenabo [it is unclear who this is], R217 766 to Denys Webb and nothing to either Mr Mortimer or Mr Harvey.

Annexure D is a letter from an auditing firm, M Kruger Auditing confirming transactions in the bank account for the financial year 2019/20. It shows:

  • Payment to Lynn Mackenzie of R50 000 as interest on the loan of R1.2m
  • R120 000 to T Masanabo as a loan
  • R75 000 to T Masanabo for “services rendered”
  • R10 000 to Thape Media (“presumably a loan’)
  • R131250 to J Masanabo for “services rendered’
  • R105 063 to D Webb as “reimbursement of creditors” paid by himself
  • R118 210 to D Webb as salary
  • No payment to D Mortimer or G Harvey

2.26 Mr Mortimer says “the only payments made to Mortimer Harvey were with Thabang’s knowledge…this information was provided to the journalist but ignored.”

He says the Masanabos “were long added as signatories”.

2.27 In response to the internal document sourced by Sunday World showing differing payments to the Masanabos and the minority shareholders, Mr Mortimer says the email was in response to another but other emails “were conveniently excluded in a suspiciously unethical way to suit the narrative:” He cites Annexure D mentioned above, being the independent auditor’s report showing how much each party was paid.

2.28 On the loan agreement, he insists the journalist was provided with a copy but “conveniently opted to leave out that part as it would taint his chosen narrative.”

2.29 On Mr Sefara’s response on the sub-head, where he says the “sidelining” of the Masanabos was a “fact…according to Thape”; he asks why it was not attributed to Thape in that case. “This clearly shows the journalist assumed the position of mouthpiece of Thape…[the] views of Thape and the journalist are blurred.”

2.30 On Mr Makhudu’s response about Cherry Moon and Inure and specifically the R1.2m payment made to Cherry Moon to buy its shares, and the subsequent interview with the owner of Inure, Khumoetsile Moetse who “walked away” from the proposed deal with Gravitate: Mr Mortimer says the source for this information was not included in the story, thus contravening clauses 1.1 and 1.2 of the Press Code.

In response to Mr Sefara’s comment that the paper had spoken to “a source who worked closely with Dlamini who explained similar concerns and their need to accept the R1.2m payment and walk away from a R50 million deal with Absa..” Mr Mortimer says there is no mention of Minnie Dlamini in the complaint to the BBBEE commission.

His response to the question about the reason for her company’s departure was “conveniently excluded” from the story.

“The journalist demonstrates a high level of carelessness by namedropping and that directly impacted on the fairness of the story”, contravening section 1.2 of the Press Code.

2.31 On Mr Sefara’s response that the story made no mention of Cherry Moon or Inure,  Mr Mortimer says “the exact exclusion of that proves the journalist was selective in including responses..” Minnie Dlamini’s company was mentioned in questions to Mr Mortimer “but because the responses did not suit the preset narrative”, they were abandoned.

2.32 On Mr Sefara’s response about the journalist being told that Ms Mckenzie was Mr Mortimer’s wife, he says the description of her in the article as his “lover” was a contravention of the clause 3.1 of the Press Code as he failed to “exercise care and consideration in matters involving the private lives of individuals”.

  1. Analysis

3.1 This is a complex story (and complaint) that indicates a major fall-out between business partners.

3.2 Gravitate, the overall company, divides its shareholding into 51% for its black empowerment partners (currently Thape Media) and 49% for Mortimer and Harvey who run an entity known as MH. The black empowerment deal was brought about as a condition of a R50-million, five-year  contract with Absa.

3.3 The issues that are contested are the following:

  • The status of the loan agreement with Ms McKenzie
  • A loan of R614 000 which the article reports (from the complaint) was “fraudulently transferred out of the company” to an entity owned by MH.
  • Alleged differentials in pay and benefits between the “minority” shareholders and “majority” shareholders
  • The question of bank signatories
  • The question of the withdrawal of Cherry Moon (Minnie Dlamini et al’s company) and the failure of a subsequent agreement with Inure (even though these names are not mentioned in this particular story they are referred to)
  • The sub-head
  • The status of Mr Mortimer’s relationship with Ms McKenzie

3.4 In response to my requests Mr Mortimer’s lawyer (now replaced by attorney Mr China Mathebula), sent me copies of emailed questions and answers from the reporter to Mr Mortimer and a number of documents that are referred to in the responses.

Mr Kabelo Khumalo, acting editor of Sunday World sent me a copy of the complaint to the BBBEE commission.

On the complaint to the BBBEE Commission

3.5 The complaint seems to be the basis of most of the story.

The main points in the complaint are:

  • The R614 000 allegedly owed to Gravitate from MH. It says with no loan agreement “this is fraud”.
  • Differentials in pay, namely R331 250 to the Masanabos; R140 000 to Mr Mortimer, R211 739 to Mr Webb and R50 000 to Mr Harvey.
  • The “R1.6m loan” made to buy out the previous shareholders (Cherry Moon) from Lyn McKenzie described as Mr Mortimer’s “lover”
  • Fronting allegations in that the minority shareholders have “inhibited” the majority shareholders from exercising operational or financial control.
  • That the minority shareholders had “prohibited” majority shareholders from making decisions such as appointing a black auditor or company secretary, removing MH staff from the Gravitate bank account, making payments to staff and salaries, and using their own financial director to process payments
  • Fronting in that Thape Media alleges the minority shareholders in Gravitate “insisted” that it channel its “ringfenced” contracts to Gravitate, which Thape Media has no financial control over. They call this “behavioural fronting”.
  • The minority shareholders “issued a notice of breach” saying that Thape was in competition with Gravitate  but this is not true because Gravitate is a BEE Level 2 status company and not eligible for some of the contracts.
  • Thape Media says Absa undertook to launch a forensic investigation into the allegation of “financial abuse” and “fronting”, but three months later this had not started.
  • Thape said it had opened a case of fraud against Mortimer Harvey and “suspected tax deferral”.
  • The minority shareholders had opposed them paying salaries to themselves and the staff receiving 13th cheques.
  • There were disputes over financial control.
  • “Collectively”, they were remunerated more than the majority shareholders.
  • They stopped them appointing a black auditor by saying all the directors had to sign such a document.
  • They had written a letter to Absa in February, requesting that “all non-Gravitate employees, shareholders and directors” be removed from the Gravitate bank account, but this request was not granted.
  • The majority shareholders requested a meeting with staff “to check up on them” but the minority shareholders said they needed a board resolution to hold such a meeting.
  • Thape Media was refused access to the office  - although the Masanagos themselves were given access.
  • Thape Media threatened legal action in June when “minority shareholders” decided to move “Gravitate staff” out of their office to “upstairs inside MH’s office”.
  • They use the MH financial director to make payments to staff  instead of the Gravitate accountant.

3.6 As a remedy they ask that the minority shareholders resign and give their shares to Thape Media “at no cost”, as well as face charges for “fronting”.

The business relationship

3.7 Mr Mortimer’s attorney provided me with the emailed questions from the reporter and his answers, as well as further documents that he said supported his answers.

These tell a rather different story.

It is not for me to establish the truth of this relationship and the unfolding of events, except insofar as to ask whether readers were given both sides of this complex story and whether the “alternative narrative” was fairly reflected.

3.8 With regard to the purchasing of the shares of Cherry Moon, referred to in the article as the company belonging to Minnie Dlamini, her husband Quinton Jones, Gugu Madlala and Boitumelo Peters, he said there was no wating period, the shares passed directly from Cherry Moon to Thape Media

3.9 The price of the shares was R1.2 million. It was this amount that was borrowed from Ms McKenzie to pay for the shares. The shares were warehoused pending an agreement that was signed in November 2018 with a company called Inure (the subject of the story published on 27/7/20) However, on 31 December 2018 “a substantial and materially different Shareholders agreement was tabled by Inure”.

He provides the agreement and the amended agreement, in which it appears that the price of R1.2m for the shares was changed to R1.

The contested points

3.10 On the financial decisions in the company, Mr Mortimer told the journalist (and provided a document) that “Jo and Thabang Masanabo made all the financial decision in the company. With reference to the rental…Gravitate is four months in arrears. We decreased the rent to assist Gravitate from 20K per month to R16k per month…”

In an email communication (17/7/20), he told the journalist that neither Gerald Harvey not he “had taken one cent or been paid for our time and commitment to try and make a success out of Gravitate. Denys (Webb) has not been paid since December last year and he is working and delivering all the work in Gravitate for Mortimer Harvey clients and Absa direct. There is no input or involvement from Jo and Thabang as they run Thape Media full time which is directly competitive to Gravitate Multi Video Content.

3.11 On the allegation that Webb and Harvey “were benefitting more from the company”, he says “the only party to benefit from taking money out of the company is Jo and Thabang” He refers the journalist in the same email to an attachment which appears to be a financial statement from June which shows that rental to Mortimer Harvey of R23 000 has not been approved for payment, nor has a payment for R30 000 to Denys Webb for “delivery all Absa work.”

In a rather acrimonious email exchange between Mr Mortimer and Mr Masanabo, attached to the answers, Mr Mortimer writes the “bottom line amount brought in by Thape is R562 105 in a year. With R75k taken for airfares… a R10k loan to you, Thabang R50K on demand, R120K to Thabang and R175K to you December. Total taken out R430K.

“Thape contribution to Gravitate operations expenses…for the year R132K

Rental payable for Thape to operate out of MH house, 50% of Gravitate rent – R120K not paid.”

3.12 The Sunday World provided in its responses an excel sheet of payments showing R331 250 paid to the Masanabos, September to December 2019 (these included three advances), and R401 729 paid to Mortimer, Harvey and Webb in December to back up its point that there were differentials in pay.

Mr Mortimer’s documents show a different story. I am puzzled by the document produced by the newspaper because they did not break down payments per capita. Per capita, the Masanabos were paid R165 625 (including advances) and the MH staff were paid  R133 913 per capita albeit over one month.

The point is, though, this document alone does not prove differentials in pay, and Mr Mortimer’s documents should have been reflected.

3.13 In the replies reflected in the article to the question of financial control and benefits, Mr Mortimer is quoted as saying that the Masanabos were “locked in arbitration” with MH over breach of competition clauses, saying they dedicated “90% of their time to running their company and neglecting their fiduciary duties”. He also is reported as saying that it was not true they had no control over finances and operations.

It may have given readers a more complete picture, had the newspaper reported the attempt to remove the directors of MH as signatories on bank accounts without approval from the board, and Mr Mortimer’s reply that he and Mr Harvey had not taken any money out of the company for a period.

3.14 On the question of the debt of R614 000:  the article, citing the complaint to the commission, reports that “funds amounting to R614 000 were also fraudulently transferred out of the company as loans to an entity owned by Harvey and Mortimer, MH, without any loan agreements and payment terms.”

There is no response to this allegation recorded in the article, except insofar as to say Mr Mortimer is unaware of the “fraud charges” that were reported.

In an email exchange (Mr Mortimer’s replies are dated 17/7/20), the reporter asks: “We have also noted that a case of fraud was opened against your Denys Webb and Gerald Harvey at Sandton police station relating to the R640 000 (I assume it is a reference to the above figure) which was offset and other payments made in favour of a company owned by you.”

Mr Mortimer replies to the reporter: “We are not at all aware of any fraud charges against both Gerald Harvey and Denys Webb. I can only think that this is relating to paying back money to Mortimer Harvey, Gravitas’ biggest client who assisted to keep Gravitate operational. Offsetting is normal business practice because the debt has to gradually be settled by Gravitate. Jo and Thabang are fully aware of this.”

The R614 000 is mentioned in the email exchange between Johannes Masanabo and Dave Mortimer cited above. Mr Mortimer says Gravitate still owes MH “a substantial amount of money” and the MD of MH “will not pay Gravitate until Gravitate meets its financial obligations.” (the reply is dated 17/2/20).

3.15 It seems this is part of a tussle for control between MH and the Masanabos. In the same exchange, Mr Masanabo writes: “As a majority shareholder Gravitate is my business and I will run it in a way that is its best interest.” Mr Mortimer replies: “It’s not your business and you have partners and a fiduciary duty to Gravitate as a shareholder and director.”

In any event, the replies to the allegation of R614 000 being “fraudulently transferred” out of the company is not reflected properly except insofar as to note that Mr Mortimer says he was not aware of any fraud charges.

3.16 On the loan from Ms McKenzie: The allegation was that it was for R1.6m, that it had no agreement or payment terms, and that Mr Mortimer had not declared his relationship with Ms McKenzie. Mr Mortimer says he provided the journalist with the loan agreement; also the loan was for R1.2m to buy the Cherry Moon shares. The rest of the amount was interest repayment.

In the article, the journalist reports that “Mortimer confirmed…that McKenzie’s company had loaned Gravitate R1.2 million.

“But he also said the relationship and loans were declared to Thape Media…”

Thus, his position on the matter was reflected, perhaps not in the detail he would have liked but given space constraints this seems a fair reflection.

3.17 On the question of the bank signatories: In the article, the newspaper reports, following the complaint to the BBBEE Commission, that the majority shareholders complained that “bank signatories were executives loyal to Harvey and Mortimer who made payments without first clearing these with them…” The reporter put two questions to Mr Mortimer in an email. These were: 1. “Can you explain why Thape Media as Majority shareholders had not (sic) control over the financial bank account of Gravitate?” And 2. “Can you explain why MH officials, from Financial Director and others were signatory to the Gravitate bank accounts and not Thape as Majority shareholders and other directors in the company?”

Mr Mortimer’s answers were as follows:

To 1. “They do, please see attached Absa  authorised signatories. Thabang and Jo have been signatories since 08/04/2019. Also see attached communication to Absa bank where Jo Masanabo tried to change signatories where only him and Thabang could sign without the knowledge of other directors, which shows poor corporate governance.”

To question 2 he replied: “Mortimer Harvey started Gravitate as an enterprise development initiative. Once the company was up and running, they were no longer signatories. When Jo and Thabang were onboarded, they were made signatories as per the first attachment.”

The attachments to this email exchange between Mr Mortimer and the reporter include an Absa bank form  (dated 17/4/19) and a letter (undated) from Mr Johannes Masanabo addressed to Thokozane Maluka , the Relationship Executive at Gauteng South branch of Absa bank. It says: “Only the following shareholders below should be listed as signatories for any of transactions concerning Gravitate MVC and Gravitate Properties bank accounts: Johannes Masanabo, Thabang Masanabo, Denys Webb and Dave Mortimer. The approval/authorisation process is as follows: Johannes Masanabo and Thabang Masanabo may authorise any transaction without the signatures of Denys Webb and Dave Mortimer. Dave Mortimer and Denys Webb need a signature from either Johannes Masanabo or Thabang Masanabo in order to authorize payment.”

Ms Maluka then sent the letter to Mr Mortimer saying “please advise if everything is in order and that we can act on his instruction.”

Mr Mortimer replies: “Dear TK, Under no circumstances can you action this instruction, it has not been tabled at a board meeting and therefore has not been agreed by all directors and shareholders.”

From his answer and the attachments provided, it was clear that there was a dispute over the issue of bank signatories and that Mr and Ms Masanabo, Mr Mortimer believed, had without the consent of the board tried to change signatories and authorization on the Gravitate bank account.

Their position was not reflected in the article.

3.18 On the question of the loan from Ms McKenzie’s company: it is not explained that the R1.6m includes interest on a R1.2m loan. However, the newspaper reflected Mr Mortimer’s comment confirming the loan for R1.2m

3.19 On the sub-head: Mr Sefara’s response to this part of the complaint is that the charge that the Masanabos were being “sidelined” was a “fact” because this was confirmed by Thape Media. This misses the point. If one side to a dispute says this, it is a claim or an allegation, not a fact. Mr Mortimer has disputed that they are being “sidelined.” The claim in the sub-head should have been attributed.

3.20 On the complaint that Ms McKenzie is described as Mr Mortimer’s “lover”. In the email exchange with the journalist dated 17/7/20, Mr Mortimer writes to the reporter: “Lynne Mackenzie is my common-law wife as we have been together for 22 years. Thankfully, she was willing to loan the money to Gravitate so we could facilitate exiting Cherry Moon to bring on a new empowerment partner.”

But Mr Sefara says in his response that there was no mention in Mr Mortimer’s email that she was his wife and no “naming convention” had been violated.

But there was indeed mention, as noted above. Mr Mortimer adds in his email to the reporter (dated 17/7/20)  that they have been together for 22 years, and again in a reply on 18/7/20, he responds to a question by the reporter: “Can you confirm or deny that you and Lynn McKenzie are lovers?” with the following answer:

Really! After a 22-year relationship I still like to think so.”

While the latter response may have allowed for some ambiguity, he is quite clear in his first response that she is his “common-law wife”. Some people may find the term “lover” insulting, even sexist, as it implies a fleeting and perhaps illicit relationship. This was clearly not the case here. The more neutral word “partner” is more respectful and gender-neutral.

The use of the term, in the face of information to the contrary, was odd, even provocative, and certainly may have undermined the dignity of Ms McKenzie, a professional woman. However, she is not the complainant in this matter. Mr Sefara’s response that Mr Mortimer did not mention the nature of his relationship in his email is less than truthful – he mentioned it twice. The Press Code prohibits  denigratory references to people’s “race, gender, sex, pregnancy, marital status…”. I accept that some may not find the reference to “lover” offensive – even though others may – but the Press Code is not explicit on the use of this phrase, as Mr Sefara points out. 

Conclusion

The newspaper was well within its rights to report on an official complaint made to the BBBEE Commission.

It reported fairly on the complaint and clearly put several questions to Mr Mortimer in writing.

However, there were certain grave allegations in which Mr Mortimer’s replies were not fairly reflected.

These were:

  • On the question of financial control and alleged differential benefits
  • On the question of the R614 000 allegedly taken out of the company.
  • On the question of the bank signatories.

Moreover, the sub-head, “Masanabo sidelined by minority owners” was an allegation by one side in this dispute yet presented as fact.

Finding

Mr Mortimer’s replies to the three serious allegations listed above – on financial controls and differential benefits were not properly reflected. The newspaper’s documents are not sufficient proof as it appears that certain details – such as the fact that certain people in MH were not paid, nor was rental – were missing.

On the dispute over the R614 000, Mr Mortimer said  (to both the reporter and to the Masanabos) that this amount was being held in lieu of certain payments he claimed were still owing to his company, including rental. This reply was not fairly reflected.

Likewise, on the question of bank signatories: the correspondence attached to his replies to the reporter makes it clear that there was, at the very least, dispute over this. His company had objected to what appears to have been an attempt to change bank signatories without the approval of all the directors. His response was not properly reflected. This contravene clause 1.8 of the Code.

The newspaper must apologise for not reflecting fairly replies to serious allegations that have been made in the complaint to the BBBEE commission and which it reported on.

It must also apologise for stating an allegation as fact in a sub-head and contravening clause 10.1 of the Press Code.

These are Tier 2 offences.

The rest of the complaint is dismissed.

The apology should:

  • be published at the earliest opportunity on all the newspaper’s platforms, after the time for an application for leave to appeal has lapsed or, in the event of such an application, after that ruling;
  • refer to the complaint that was lodged with this office;
  • end with the sentence, “Visit www.presscouncil.org.za for the full finding”;
  • be published with the logo of the Press Council (attached); and
  • be prepared by the publication and be 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.

Pippa Green

Press Ombudsman

December 1, 2020


[1] See ‘More fronting allegations against Absa supplier’ (27/7/20) https://sundayworld.co.za/business/more-fronting-allegations-against-absa-supplier/