Ebrahim vs Sunday Times

SUMMARY

The headline to the story in dispute read, #ImStaying is still around, but the money’s gone – Former and present CEOs can’t show any financial paperwork (In print); and, #ImStaying is still around, but the money’s gone – Current and former CEOs of the non-profit company could not show any annual reports or audited financials. It was published on 18 September 2022.

This ruling by Deputy Press Ombud Franz Krüger was based on the Press Code that was in effect before 30 September 2022.

 

The report dealt with #ImStaying, which was set up in 2019 as a Facebook group and as a non-profit company (NPC) to bring together all those “that choose to grow and improve South Africa”. The report essentially said that its directors were unable to account for how donations raised from the public were used. The figure provided was around R2m.  The report quoted the former CEO as saying that Shireen Ebrahim, his successor, had been unable to produce a financial report or audit.

Firstly, Ebrahim complained the claim that R2m had gone and could not be accounted for was false and should have been verified with her.  She said a file with the relevant information had been made available, but the reporter did not take a look at it. She added that the BackaBuddy website would provide relevant evidence.

The question of whether Ebrahim, on behalf of #ImStaying, was able to produce financial records or not was at the heart of the story and of the complaint.

Krüger said an audit provided the security of an independent, professional opinion on the reliability of the information given. Dismissing this part of the complaint, he said, “I feel that without at least a financial report, #ImStaying can’t be said to be accounting for its use of money… Overall, I find the newspaper had enough support for the statement that #ImStaying has not adequately accounted for its finances.”

Secondly, Ebrahim maintained the claim that #ImStaying had no audited financials was untrue. After mulling over some arguments, the Deputy Ombud concluded that it had been justified to assert that #ImStaying “could not supply audits” – but not that it had “never had an audit done”. In that respect, he opined, the opening paragraph was an exaggeration. He directed the publication to apologise to Ebrahim, #ImStaying and its readers for this breach of the Press Code.

Krüger dismissed the rest of the complaint, namely the claim that #ImStaying was an illegal company and that it had no insurance, no contingent and no business cover; and that Ebrahim had not been given sufficient time to respond.

 

THE RULING ITSELF

Ruling by the Deputy Press Ombud

Date of publication: 18 September 2022, at https://www.timeslive.co.za/sunday-times/news/2022-09-18-imstaying-is-still-around-but-the-moneys-gone/

Headline of publication:

In print: #ImStaying is still around – but the money’s gone, with the subheading: Former and present CEOs can’t show any financial paperwork

Online: #ImStaying is still around – but the money’s gone, with the sub-heading: Current and former CEOs of the non-profit company could not show any annual reports or audited financials

Author: Gill Gifford

Particulars

1. The complaint was lodged by Shireen Ebrahim, the CEO of the group #ImStaying.
2. The complaint was laid against the Sunday Times.  The newspaper’s response was submitted by Nicky Güles, assistant editor for investigations and special projects.
3. The complaint was dealt with on the basis of the formulation submitted on February 16 2023, together with some supporting documentation. It should be noted that several other versions of the complaint were submitted at different times, and that various further complaints and allegations emerge in the extensive correspondence with the office of the Public Advocate.  However, it is clear that the February 16 version is intended as the authoritative submission, as well as being the clearest and most succinct formulation. Also considered was the response from the Sunday Times, dated March 1 2023, and the undated rejoinder from the complainant. I requested the reporter’s notes, which were supplied and considered.

The report

4. The report deals with #ImStaying, which was set up in 2019 as a Facebook group and as a non-profit company (NPC) to bring together all those “that choose to grow and improve South Africa”, as the group’s website says. The report essentially says that #ImStaying directors are unable to account for how donations raised from the public were used. The figure provided is around R2m.  The report quotes the former CEO as saying he handed over the financials to Ms Ebrahim, who took over from him, and it says she was unable to produce a financial report or audit. Some former and current members are quoted as being unhappy with an alleged lack of accountability.

The complaint

5. Ms Ebrahim complains against the article on a number of grounds. I will outline the various elements of the complaint, together with the newspaper’s  response and give my view on each. I follow the structure of the complaint. Note that the headings are my own, drawing on the main element of each part of the complaint.
6. Though the February 16 version of the complaint does not refer directly to the Press Code, the relevant provisions can be inferred.  The most important applicable provisions are 1.1, 1.2 and 1.3, requiring truthful and accurate reporting. In one respect, provision 1.8 on the right of reply is applicable. Others can also arguably be considered.

Complaint 1: Inaccuracy – inability to account

Arguments

7. Ms Ebrahim says the claim that R2m has gone and cannot be accounted for is false and should have been verified with her.  (I leave aside the fact that the amount is not referred to in the headline, as she says. The claim is in the body of the report.) She says a file with the relevant information was made available, but the reporter did not look at it. She also says that the BackaBuddy website would provide relevant evidence.
8. In response, the Sunday Times says that the information Gifford was offered consisted of a brief listing of projects, together with thank-you notes and other communication, but no financial information.  The newspaper says Gifford was also offered a file with bank statements by Mr Ridwan Ebrahim, the complainant’s husband who accompanied her to the meeting. She refused to look at the second file on the grounds that it contained personal records, not those of the organisation. The newspaper did not respond to the point that BackaBuddy would provide evidence.
9. Ms Ebrahim says there was only one file, not two, and insists that the file contained the relevant financial information.

Discussion

10. The question of whether Ms Ebrahim, on behalf of the NPC #ImStaying, was able to produce financial records or not is at the heart of the story and of the complaint. The central allegation of the report is that the organisation cannot account for its finances, and the complaint is that this is untrue.
11. It is difficult to prove a negative, particularly under circumstances where there is a direct contradiction between the evidence of what transpired at the meeting between Ms Gifford, the reporter, Ms Ebrahim and her husband, held on 9 September.  Ms Ebrahim says one file was produced, Ms Gifford says there were two.  Ms Ebrahim says the file contained the necessary details, Ms Gifford says neither of the two files contained them. One consisted of a list of projects and correspondence, the other of irrelevant personal bank statements, in Ms Gifford’s version.  Ms Ebrahim says there were no personal bank statements, and a reference in the conversation to showing Ms Gifford that “we do not have millions in the bank” referred to the organisation, not to the couple’s private affairs. At this stage, it does not seem possible to resolve the contradiction between the two versions of what happened.  And yet it seems crucial to be able to establish whether #ImStaying was able to account for its financial affairs or not.
12. What is clear from the various submissions that the organisation did not have, at least at that stage, a financial report or audit that could be shared.  On her account, Ms Ebrahim brought a file of documents, but no financial report that summarised incoming and outgoing funds. An audit was done but the organisation was awaiting feedback from SARS.  The question of an audit is dealt with separately.
13. I do not feel that making a file of raw information, even if it is relevant and complete, constitutes accounting for an organisation’s finances.  A financial report summarises the finances of an organisation, whether big or small, as the authorities, members and supporters, as well as the general public can’t be expected to work their way through voluminous documentation to understand the organisation’s financial position. An audit then provides the security of an independent, professional opinion on the reliability of the information given. I feel that without at least a financial report, #ImStaying can’t be said to be accounting for its use of money.
14. Ms Ebrahim places considerable reliance on the BackaBuddy website as providing evidence of how her organisation used money. She says that BackaBuddy provides a breakdown of the R2m. However, the article provides different amounts as adding up to the R2m and only refers to a relatively small amount (R132 000) raised on BackaBuddy.  Several separate campaigns sponsored by #ImStaying on BackaBuddy were not included in the newspaper’s summary, and donations to those may not have gone through #ImStaying’s books. In terms of the way BackaBuddy works, as per its website, donations may be routed directly to a separate beneficiary organisation.  It is not clear whether this was the case.  Ms Ebrahim, on the other hand, does not address other amounts (like R500 00 apparently used in the setup phase) referred to in the report. These discrepancies cannot be resolved through the documentation available, but are also not central.
15. The important question is whether the BackaBuddy site, a crowdfunding platform, provides evidence of how money was spent. However, it does not. Donations are made to the platform, which lists them individually.  BackaBuddy charges a fee and then pays the balance to the organisation or individual raising the funds, but does not account for how the money is then used.
16. Ms Ebrahim also argues that allegations in the report should have been verified with her. A distinction needs to be made between ensuring there is enough independent basis for a claim, and giving one party the right to veto information.  Ms Ebrahim can expect to be given an opportunity to respond to claims (and was given that opportunity), but not for her word or version to determine whether a report is published at all.
17. Elsewhere in her responses, Ms Ebrahim says that financial information cannot be made available to outsiders for religious reasons, and to avoid the risk of kidnap.  At another point, she defends the refusal to share financial information with specific individuals on the grounds they had differences with the CEO. These considerations cannot be advanced as justification for avoiding public accountability in an organisation working with public money.
18. Overall, I find the newspaper had enough support for the statement that #ImStaying has not adequately accounted for its finances.

Ruling

19. This element of the complaint is dismissed.

Complaint 2: Inaccuracy – no audit

Arguments

20. Ms Ebrahim says that the claim that #ImStaying has no audited financials is untrue.  She says an audit was submitted to SARS, and the organisation was awaiting feedback. She says the submission to SARS was in the file Ms Gifford was offered.  She also says that SARS issued a tax clearance certificate since the appearance of the report.
21. The newspaper says the report relies on Ms Ebrahim’s statement about waiting for SARS, and Ms Ebrahim does not dispute this.
22. The Sunday Times denies submissions to SARS were in the file.

Discussion

23. It is unclear why the audit could not be provided while under consideration by SARS.  The tax authority does not approve audits. A tax clearance is a different matter, it is a statement that an organisation’s tax affairs are in order. It is unclear why Ms Gifford apparently did not challenge the excuse that an audit could not be provided because it was with SARS.
24. It is also not clear that a formal audit was in the file. Ms Ebrahim never refers directly to an audit report or similar, but relies on the presence (also disputed) of bank statements and other evidence.
25. At the start of the report, Ms Gifford writes that #ImStaying “stands accused of being an illegal company that has never been audited or filed an annual report”. I will return to the question of illegality.  However, the claim that the group stands accused of never having been audited or filing an annual report is exaggerated.  There is no evidence contradicting the quoted claim that an audit is with SARS, and none of the critics quoted later in the report make that particular accusation.
26. Overall, the assertion that audits could not be supplied stands up.  But the claim that the organisation was never audited goes a step further and cannot be sustained. In that respect, the opening paragraph is an exaggeration.

Ruling

27. This element of the complaint is partially upheld, in that the reference in the opening paragraph to an accusation that there never was an audit is overstated.

Complaint 3: Inaccuracy – an illegal organisation

Arguments

28. Ms Ebrahim says the claim that #ImStaying is an illegal company is untrue, pointing to its registration with CIPC and the Department of Labour, the fact that it has a bank account, and says it is “compliant with all relevant due diligence”.
29. The Sunday Times relies mainly on the fact that the law requires companies to have audited financial statements within 18 months of launch.  The newspaper also quotes the CIPC as confirming the requirement, and the opinion of Malyssa Hattingh, quoted as a compliance specialist.
30. Ms Ebrahim responds that the organisation is registered with the CIPC, as well as with the Department of Labour, and is “compliant with all the relevant due diligence”. She dismisses the views of Ms Hattingh on the basis that she does not represent any relevant body.
31. Ms Ebrahim also makes the point that there have been delays with compliance due to Covid. Elsewhere, she says that “the governance in setting up a start-up NPC was in a mess but has since been resolved”.

Discussion

32. I accept that it may take new companies some time to get their administrative and financial processes in place. Compliance may indeed be delayed, and Covid has set back many activities.
33. I also accept that Ms Hattingh is not making a statement of fact about #ImStaying, but expressing an opinion.
34. At the same time, it is not disputed that the law requires audited financial statements within 18 months of their launch, and that #ImStaying did not meet that requirement.
35. Referring to the group as an “illegal company” is putting it rather strongly.  Nevertheless, #ImStaying does seem to have been in breach of the law. If the audited statements are now available, the group is in a position to rectify the problem.

Ruling

36. This element of the complaint is dismissed.

Complaint 4: “No insurance, no contingency and no business cover”

Arguments

37. Ms Ebrahim claims she was misquoted as saying the company has no insurance, no contingent and no business cover.  She never made the statement, she says, though she confirms having said there was an administrative mess at that point.
38. The Sunday Times says the statement was made in reference to the state of the company when Ms Ebrahim took over.  The newspaper also refers to a statement about start-up funding which had been spent at that time, and to an administrative mess that took six months to sort out. The newspaper also quotes her as saying the organisation has no money.
39. In response, Ms Ebrahim repeats that she was misquoted, and points to the fact that #ImStaying relies on the public for donations and is reliant on voluntary help, including from her husband.
40. On my request, the Sunday Times provided Ms Gifford’s notes, which contain the phrase “no insurance, no contingency and no business cover.”

Discussion

41. According to the evidence I was shown, Ms Ebrahim did use the phrase she objects to.  It needs to be highlighted that the way the quote is used in the report clearly refers to the state of the company when she took over, rather than now.

Ruling

42. This element of the complaint is dismissed.

Complaint 5: insufficient time to respond

43. Though the complaint as formulated on February 16 does not highlight this as a separate complaint, I have decided to treat this as a separate issue as she refers repeatedly to the issue.

Arguments

44. The Sunday Times introduces the issue by a long account of the attempts made to get comment from Ms Ebrahim, who they accuse of having been evasive.  The newspaper says it delayed publication by a week to allow for a proper response.
45. Ms Ebrahim, in response, says she responded to all communications and accused Ms Gifford of unrealistic timelines. She also accuses Ms Gifford of being in a hurry when the interview finally took place because of another appointment.
46. She refers also to a follow-up exchange with another journalist, Samantha Smith, who asked about an appeal to help victims of the Durban floods. Ms Ebrahim points out this approach came on a weekend and in the midst of loadshedding, and says the report should have been delayed in order to allow for the file of documents to be examined the following week.  She provides the WhatsApp exchange between Ms Smith and Ms Ebrahim, in which she says most responses to the appeal were in kind, with little cash, and that she personally subsidised transport of the donations to KZN.  The exchange shows Ms Smith pointing out that the organisation should be able to account for the use of donations through a financial report.  Ms Ebrahim says the files can be examined in the following week.

Discussion

47. There is no question that #ImStaying deserved to be given enough time to formulate a proper response.
48. It is not in dispute that the first attempts to contact Ms Ebrahim occurred some time before the arranged meeting (September 9), which in turn took place more than a week before the date of publication (September 18). It is clear there was sufficient time for a response.
49. Though the 9 September meeting itself may have been constrained in time because Ms Gifford had another appointment, there is no indication that the time was insufficient to explain #ImStaying’s financial position.
50. The follow-up from Ms Smith came at the 11^th hour, on the weekend of publication. The published report refers to the campaign and provides Ms Ebrahim’s explanations. Though raised in the WhatsApp exchange, the question of a more formal financial report on this particular campaign did not find its way into the published report.
51. Though the element was introduced late in the reporting process, I do not believe Ms Ebrahim was prejudiced by a lack of time to provide further details. Her responses were extensively quoted.

Ruling

This part of the complaint is dismissed.

Conclusion

52. The Sunday Times breached clause 1.2 of the Press Code through exaggeration with respect to an audit.

53. The other elements of the complaint are dismissed.

54. The Sunday Times is directed to

54.1  Apologise to Ms Ebrahim, #ImStaying and its readers for presenting a report that was misleading through exaggeration.

54.2 The apology should appear on the same page of the print version of the newspaper as the original report.

54.3 The apology should refer readers to the full text of this ruling on the SAPC website.

54.4 Online, the apology should appear at the end of the article.  Between the headline and the text of the report, a line should be inserted saying that the report has been amended in line with a finding by the SAPC, with a link to the apology at the bottom. The apology online should clearly state what has been changed.

54.5 The opening paragraph should be amended online to remove the categorical statement that no audit was done.  It is acceptable to say the audit could not be provided.

55. The publication is to provide a draft apology and proposed changes to the Deputy Press Ombud for approval before publication.

56. Though they do not rise to the level of a breach of the Press Code, some aspects of the article are poorly handled.  In some respects, the extensive exchanges showed that the reporter and the complainant were simply talking past each other.   Loose language reflects a lack of understanding of the details of financial reporting requirements, such as the difference between a financial report and an audit, or the role of SARS.  The way in which the BackaBuddy site works should have been clarified, and a clearer distinction should have been drawn between money raised for #ImStaying itself and for particular campaigns. The Sunday Times is urged to pay more attention to such details in its reporting.

Appeal

57. 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 [email protected]

Franz Krüger
Deputy Press Ombud
20 March 2023