June 4, 2012
This ruling is based on the written submissions of Mr Kaveer Bharath, spokesperson for Sekunjalo, and The New Age newspaper.
Sekunjalo Investment Ltd. complains about a story in The New Age on 21 November 2011, headlined Comrades in business: Sekunjalo Investments has not kept its promises of riches.
Bharath complains that the story:
· inaccurately stated that the chairman of Sekunjalo, Dr Iqbal Survè, made empty promises to disgruntled shareholders who were guaranteed returns;
· omitted to mention that the five investors quoted in the story were all related to a former director (who was also quoted); and
· purposefully neglected to refer to Sekunjalo’s published results.
The story, written by Nadine Ford-Kritzinger, is about disappointed shareholders of Sekunjalo Investment who complained that their investments in the company yielded no financial benefits. One shareholder said that she had persuaded people from her community to invest their life savings in the company and they, too, had not benefitted.
Despite several reminders, Sekunjalo did not reply to the arguments raised by The New Age. I therefore continue to make a ruling without the benefit of such a reply.
Sekunjalo complains that the story inaccurately states that Survè made promises to disgruntled shareholders who were guaranteed returns, but which never materialised.
The New Age says that the story does not adopt the allegations of disappointed investors – it merely portrays the views of these investors. The newspaper adds that the story was in the public interest, and that the public was entitled to be informed about these allegations (even if it could not verify those allegations) as well as Sekunjalo’s response to those concerns.
The article complies with the principle of balance by reporting the other side’s response because the:
· publication of the chairman’s denial (in the third and final paragraphs) gave balance to the story;
· story does not comment on the validity of the concerns – it does not state them as fact, but portrays them as opinions; and
· sources had a right to their opinions, and the newspaper was justified in reporting those views because it was in the public interest.
Sekunjalo complains that the story fails to mention that all five unhappy investors quoted in the story were all related to a former director (who was also quoted), and adds that one investor was the sister of the former director. It says that the story misleadingly positioned the five investors as random, unrelated people – designed to create the impression that Sekunjalo was an underperforming company and that its investors were disappointed.
The New Age says the fact that some of the shareholders were related was irrelevant. It says: “Each shareholder who is quoted in the article invested in Sekunjalo in their personal capacity and can therefore attest to what they have personally experienced.” The newspaper adds that there were also several other shareholders present at a meeting (of approximately 12 shareholders) with the journalist who were not related to the former director.
The newspaper argues that, in the circumstances, it was reasonable to believe that the allegations made against Sekunjalo “were genuine expressions of concern by unhappy shareholders”. It denies that the story was written with the intention to create the impression that the shareholders were random and unrelated. “On the contrary, the article highlights the relationship between two of the shareholders…”
The fact that those who were interviewed were related is indeed not relevant and does not detract from the focus of the allegations. The reporter also highlighted the relationship between some of the shareholders who were quoted in the article.
Neglecting to refer to Sekunjalo’s results
Sekunjalo complains that the story falsely creates the impression that the company is underperforming and that the reporter neglected to check its audited financial results to ensure balanced reporting.
The New Age says that the story was not an opinion piece, but a news story which conveys the allegations made by investors without itself expressing an opinion on those allegations. “Accordingly, the article did not express a view on the overall financial status of Sekunjalo” (as it was not necessary to do so) – neither did it purport to be an assessment of the company’s financial performance. It adds: “In fact the article does not contain an allegation that Sekunjalo is not performing well as a company.”
The newspaper also states that the primary allegation made by unhappy shareholders is that they have not benefitted from their investment because no dividends have ever been paid out by the company – an allegation, it says, that has been confirmed by Sekunjalo.
The New Age asked Sekunjalo if its shares ever paid a dividend since it started – and if not, why not. Sekujalo’s responded on 12 November 2011, explaining that it was a growth investment company which focus is on development and reinvestments. It stated: “All companies make choices depending on the needs of their businesses…and we have chosen to grow value and in time this value will allow us to pay dividends to our shareholders.” (own emphasis)
This means that it was true that the shareholders have not received dividends, which explains their unhappiness.
As this was a news report reflecting the views of a group of unhappy shareholders, the reporter was not obliged to look at the financial performance of the company – that would have changed the angle of the whole story. Besides, there is indeed no indication of underperformance in the story.
The Complaints Procedure permits a party to apply for leave to appeal against a decision of the Press Ombudsman. An application for leave to appeal, fully setting out the grounds, may be made to the Chairperson of the South African Press Appeals Panel, Judge Ralph Zulman. He may be contacted at Khanyim@ombudsman.org.za.