Moti vs amaBhungane

SUMMARY

The headline to the article in question read, MotiFiles: Inside VBS’s R1.3-billion gold-fuelled ‘hawala’. It was published on 16 October 2023.

This ruling by Herman Scholtz, the Press Ombud, was based on the Press Code that became effective on 30 September 2022.

 

Zunaid Moti complained that amaBhungane had misrepresented some facts, did not give him a right of reply, and had unethically manipulated a picture.

AmaBhungane denied any breaches of the Press Code.

The article was about a “hawala”, a word used to describe an informal and unregulated money-transfer scheme. In this case, the focus was transfers from Zimbabwe to South Africa. It alleged that “a colossal” hawala scheme had been operated through bank accounts held at VBS Mutual Bank (which had collapsed). This scheme is said to have been operated through bank accounts linked to three closely related South African companies – none of which formed part of the Moti Group.

An extract from a bank statement of one of the alleged hawala accounts showed that a payment from that account had been made to a Moti Group company. The article explained, “This [means] that Moti, using the hawala, is getting paid by someone in Zimbabwe.”

Scholtz dismissed the complaint that:

• the article created the impression that the hawala scheme (and the Moti Group’s alleged use of the scheme) led to the collapse of VBS Bank; and
• a picture of him had been unethically manipulated in such a way that it portrayed him as having been at the centre of the proverbial “web” that the article focused on.

He upheld the complaint that Moti had not been given an effective right of reply and directed the publication to apologise to him for that.

 

THE RULING ITSELF

Ruling by the Press Ombud

Date of article:                    16 October 2023

Headline of publication:   “MotiFiles: Inside VBS’s R1.3-billion gold-fuelled ‘hawala’”

Author:                                  amaBhungane Reporters

1. The complainant is Zunaid Moti who submitted the complaint on his own behalf and in his capacity as chairperson of the “Moti Group”, a group of companies with interests across a wide range of economic sectors.

2. The respondent is amaBhungane. While the article in question was also published on the websites of Daily Maverick and News24, amaBhungane was the responsible media house and answered the complaint. Sam Sole made representations on behalf of amaBhungane.

3. The ruling is based on written representations and documents provided by both parties.

The backdrop

4. amaBhungane has been publishing several articles under the banner #MotiFiles in recent months. The subject-matter of those articles is wide-ranging. The article that forms the subject of this complaint is summarised in the article itself at the top of the page under the heading, “Key takeaways”. (News24 and Daily Maverick also started off with those “key takeaways”, either as bulleted sub-headings or as an introduction to the story.)

5. The “key takeaways” from the article are:

5.1 “Bank records and documents from the #MotiFiles show how suspicious accounts at the gutted VBS Mutual Bank were used on a massive scale by Zimbabweans to illicitly shift money and transact in South Africa.”

5.2 “The clientele ranged from shoe importers to alleged money-launderers – and included Zunaid Moti.”

6. Essentially, the article is about a “hawala”, a word used to describe an informal and unregulated money-transfer scheme. In this case, the focus was transfers from Zimbabwe to South Africa. At the risk of oversimplification, a hawala is simply a system whereby someone in one country can “transfer” money to someone in another country without the use of banks and the regulated exchange control systems. Person X, the “sender” of the money, provides money to someone in that country, while another person in the designated country pays out the money to Person Y, the “receiver”.

7. The article alleges that “a colossal” hawala scheme was operated through bank accounts held at VBS Mutual Bank. This scheme is said to have been operated through bank accounts linked to three “closely related South African companies: Caydees Imports and Exports, Caylons Goods and Services, and Taintons Goods and Services”. For clarity, none of these companies form part of the Moti Group.

8. The article lists several people and entities who have allegedly made use of the hawala system run through VBS Mutual Bank, including members of the Macmillan and Rudland families of Zimbabwe, a member of the Mugabe family, a company called JR Technical Services, Santec Security Services, an entity (although not a company) called “Instant Cash Jewelry”, and then a property company in the Moti Group, 7 Vlok Road Bryanston (Pty) Ltd. Some of the above-mentioned allegedly paid money into the hawala accounts while others received money out of the said account. Both receivers (payees) and depositors (payors) are brought under the umbrella of “clientele” of the hawala scheme.

9. There is also an extract from a bank statement of one of the alleged hawala accounts – the one in the name of Taintons Goods and Services – which reportedly shows that payments were received into that account by JR Techinical Services and that a payment from that account was made to 7 Vlok Road Bryanston (Pty) Ltd (a Moti Group company). The article explains:

“This does not mean that Moti is getting paid by JR Technical but rather that Moti, using the hawala, is getting paid by someone in Zimbabwe. The transaction is however being made possible by cash provided by JR Technical.”

10. And finally there is the “gold” link. amaBhungane links the hawala accounts to the gold industry through the following ways:

10.1 One of the people allegedly linked to the system is Ewan Macmillan “who was recently caught on camera offering undercover reporters from the investigative team of Al Jazeera his services as a money launderer in their ‘Gold Mafia’ documentary series”.

10.2 JR Technical is said to be a “major contributor” to the scheme, paying over R120-million into the halawa. This company has made news “in a tax case between SARS and a gold refinery called Rappa Resources which was implicated in the multi-billion rand gold export scheme”.

10.3 Another company who allegedly paid millions into the VBS accounts was Santec Security Services, “a registered cash-in-transit company operating in the orbit of the local gold industry”.

10.4 Both JR Technical and Santec reportedly formed part of an investigation by the Hawks into the illicit gold project, codenamed “Gravity”.

11. The above backdrop – as complicated as it may be – only scratches the surface of issues canvassed in the article. As articles of this nature tend to be, it is not a casual read. It requires some concentration by an average reader, which is a factor that is, in my view, relevant to some of the issues to be considered in this complaint.

The complaint

12. Moti’s complaint is succinct and clear. He has three main complaints:

12.1 Misrepresentation of facts, which he says is a contravention of clause 1.2. of the Press Code.

12.2 The lack of a right of reply, which is dealt with in clause 1.8 of the Press Code; and

12.3 An image (used only by amaBhungane and not News24/Daily Maverick) that is said to be manipulated in contravention of clause 10.2. of the Press Code.

13. amaBhungane denies any breaches of the Press Code.

Analysis

Complaint 1: Misrepresentation

14. Clause 1.2. of the Press Code reads:

“(The media shall) 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.”

15. Moti says it is well-known that VBS “failed due to alleged mismanagement or fraud by the management of the bank”. However, the article in question is “deliberately worded in order to create the impression that I was connected to the collapse of the bank somehow”.

16. He cites the following quote from the article in support of this contention:

“Among the recipients shortly before the bank collapsed were companies in the Moti Group…”

17. Moti is non-committal over the question whether any entity in the Moti Group received payments from VBS “halawa” bank accounts. He says he has no knowledge of this, but even if this is true, it is “disingenuous of amaBhungane to link these payments to the collapse of the bank”. This, he says, is because payments and deposits “cannot possibly lead to a bank’s failure”. Says Moti: “An entity receiving a payment on a legitimate business transaction would not spare a thought as to which bank the payment was made from.”

18. Sole says the article simply did not create the impression Moti alleges: “To the reasonable reader, the article conveys no more than workings of the VBS hawala scheme, and how the Moti Group of companies (among others) were involved in it. The article does not purport to deal with the collapse of VBS or the reasons for it. By way of background, however, the article clearly states that VBS suffered ‘collapse under the weight of management fraud’. The article thus neither expresses nor implies any causal link between the scheme (let alone Moti Group companies’ involvement in it) and the collapse of VBS.”

19.1 In reply, Moti says the misrepresentation comprised two steps. The first “step” is linking the Moti Group to the hawala scheme and the second is to link the hawala scheme to the collapse of VBS. This, he says, is done through two sentences in the article:

19.2 “Furthermore, evidence gathered by investigations into VBS’ collapse point towards bribes totalling several million rand having been paid to the bank’s bosses by whoever controlled this system.”

19.3 “Their report, a confidential annexure to the public ‘Great Bank Heist’ report produced by Advocate Terry Motau, showed that there was reason to believe that VBS management was bribed to pave the way for this money moving system to be set up. It may even have been instrumental to the original hijacking of the bank.”

20. The first difficulty I have with this approach, is that it requires a dissection of the article. I would have to accept that a reasonable reader zooms in on certain aspects of the article in order to draw conclusions. This is in direct contrast to the “reasonable reader” test adopted by this office and the Appeals Panel. A reasonable reader is not morbidly suspicious to connect the dots that is not readily apparent. (Hasina Kathrada vs Times Live, Complaint 9293).

21. A reasonable reader does also not engage in an analysis of an article.  (John Steenhuisen & Others vs Mail & Guardian, 26 August 2022).

22. It was alluded to above that the article is not an easy or casual read. In fact, it is not inconceivable that an ordinary reader who read the article as any other news report would struggle to follow some of the contents. It is difficult to fathom that an average reader would perform a forensic analysis of the different sections of the lengthy article spanning 7 printed A4 pages to perform the analysis the complainant does.

23. The second difficulty is that – even with a fine comb-approach – the article does not suggest what Moti is implying. A reasonable reader reads an article as a whole and rely on journalistic devices such as summaries (the “key takeways”), sub-headings, pictures, and captions to guide them in digesting the story. None of those created the impression that the Moti Group is linked to the collapse of VBS Bank.

24. The sentence quoted by Moti in the original complaint must be read with the rest of the article that actually states the hawala scheme would have continued were it not due to the collapse of the bank due to mismanagement.

25. The sentences quoted by Moti in his reply all refer to investigations into the alleged hi-jacking of VBS Mutual Bank. While possibly related to aspects of mismanagement, the investigations into alleged money-laundering and hi-jacking of the bank remain separate to the actual reasons for the collapse of the bank.

26. Sole correctly submits that the primary reason for the collapse of the bank “under the weight of management fraud in early 2018” is stated in the article.

27. Contrary to the impression being created in the complaint, the article does not suggest that the hawala accounts collapsed the bank. The article states that the hawala accounts were “rapidly gaining steam when the collapse of the bank cut it short”, and that – was it not for the VBS implosion – “it seems reasonable to assume the (hawala) channel would otherwise have continued to be used by Moti and many others.” It was also never suggested that the hawala scheme caused losses or capital requirement difficulties for the bank that could have contributed to the collapse.

28. As I cannot find that the article created the impression that the “hawala scheme” (and the Moti Group’s alleged use of the scheme) led to the collapse of VBS Bank, the complaint in terms of clause 1.2. cannot be upheld.

Complaint 2: No right of reply

29. Moti says he and the Moti Group are implicated in the article expressly or impliedly on numerous occasions. “At no point did amaBhungane provide me or the Moti Group with the opportunity to reply to any of the VBS allegations made in the article, nor did they request comment or answers relating to VBS.”

30. In addition, Moti provides a letter addressed to Sam Sole on 20 October 2023 complaining about amaBhungane’s “excessive use of speculative language” in reporting and complained about not being afforded a right of reply. He says he received no reply to this complaint, which was sent a few days after the publication of the article that forms the subject of this complaint. However, this letter was sent after publication of the article and is not an indication that Moti gave a response that was ignored.

31. Sole says it is not true that amaBhungane did not approach Moti for comment. Says Sole: “At the outset of the #MotiFiles reportage, on 11 April 2023, we wrote to the Moti Group with detailed questions about various issues arising from revelations in the leaked Moti Files. On 26 April 2023, Mr Moti’s attorneys (Ulrich Roux and Associates) sent our attorneys (Webber Wentzel) a letter enclosing a 140-page document containing responses to the questions.”

32. I was provided with 7 pages of the Moti response which amaBhungane deemed relevant.

33. It is necessary to take a step back and consider the import and function of clause 1.8. of the Press Code. This office and the Appeals Panel have repeatedly emphasised the fundamental importance of effective right of replies to give effect to the audi alteram partem principle. (See, for example, Gemfields Ltd and Motepuez Ruby Mining Limitada vs The Continent and Mail&Guardian, 14 February 2022 where the function of this principle in ethical journalism is emphasised.)

34. What the word and spirit of the Press Code require, is an effective right of reply as opposed to the paying of lip service to pre-publication comment. In my view, there are three components to consider in ascertaining whether there was an effective right of reply:

34.1 Firstly, the enquiry itself had to be effective. Was it sent to the correct e-mail address/telephone number/address and to the correct person? Was it reasonable for the journalist to expect that the enquiry would reach the relevant person? The Press Code also demands “reasonable time” for the receiver of the enquiry to respond. What constitutes reasonable time is fact dependent.

34.2 Secondly, the contents of the enquiry need to be effective. The receiver of the enquiry must reasonably be able to understand what he or she is expected to answer and what the nature of the allegations are against him or her. It has been repeatedly emphasised that each critical allegation to be made ought to be put to the subject of critical reportage. (See: Ann Parboo vs Newcastle Advertiser, 2 October 2012)

34.3 Lastly, any response received should be fairly reflected in the article. The response, or parts thereof, cannot be ignored even if the journalist believes the response to be meritless. (See: Siyaya TV vs amaBhungane, 7 February 2023). While it is not always feasible to repeat a response verbatim, it must be a fair reflection of the gist of the response. Adding to that, the comment should be presented in a fair way. It is of no use to include the denial of a material allegation right at the end of a 3000-word article while the allegations are raised in the beginning of the article.

35. As a final detour before considering the merits of this part of the complaint, it must be mentioned that there are, of course, exceptions to the requirements for pre-publication comment. Clause 1.8. lists four exceptions, being impracticability, a reasonable apprehension that doing so may prevent the publication from reporting, or that evidence will get destroyed, or sources intimidated.

36. As correctly pointed out by Moti in reply, none of these exceptions in clause 1.8.  are raised in this complaint. amaBhungane does not allege that it was impracticable to seek comment, or that the other exceptions were applicable.

37. Moti alluded in his responses to the widely publicised litigation between Moti and amaBhungane. It is a matter of public record that this included an ex parte interdict obtained against the publication, which was later set aside. But amaBhungane does not allege that it was – in this instance – impracticable to seek comment out of fear for pre-publication censorship.

38. amaBhungane’s case is rather that:

38.1 It did seek comment.

38.2 It fairly reflected those comments (through two contemporaneously published articles and in the article).

39. I disagree that amaBhungane afforded Moti with an effective right of reply.

40. It appears common cause that Moti was not approached for comment close to publication. The enquiry referenced by amaBhungane was in April, some six months prior to publication. While I accept that the timing of the enquiry alone cannot be dispositive of the question whether there was an effective enquiry, it remains a relevant consideration. Much has happened since the start of the #MotiFiles reportage in April 2023. A wealth of information has come to light since April 2023 that may or may not have influenced the response provided by Moti at the time. For example, Moti may have answered in April 2023 that he has not seen document XYZ and therefore cannot comment. This document may have been published since. Fairness demands an opportunity to Moti to be granted an opportunity to update previous responses.

41. The difficulty does not stop at the timing of the enquiry. The April 2023 enquiry was also ineffective.

42. amaBhungane relies on the following question posed to Moti:

“Further buttressing the impression that the JayT and Ultra payments are linked is evidence drawn from bank statements for a company called Caydees Import and Export for an account held at the now-defunct VBS Mutual Bank. Caydees was a channel for many Zimbabwean businesses and individuals to make payments in rands in South Africa for goods and services exported to Zimbabwe, in practice functioning as a large hawala. According to the Caydees statements 7 Vlok Road Bryanston received R11-million into its ABSA account from the Caydees account between 30 November and 18 December 2017. The reference given for these payments is “JayT Global”. The timing once again corresponds to the money-moving operations referred to above.

3.3 What was the purpose of these payments if not the receipt of money disbursed in Zimbabwe into an entity in South Africa?

43.  The response received was:

““I have no knowledge or context to the name ‘Caydees Import and Export’ and have not dealt with them in any manner. Your assertions around them are meaningless as I do not know them. I have not obtained bank statements of other entities (illegally or otherwise), so I cannot comment on the content thereof. The only facts that I know is that 7 Vlok Road Bryanston received funds into its bank account under the Ultra transactions. The purpose of the receipts from Ultra are recorded in the agreements under your ‘control’.””

44. The contents of the April 2023 enquiry must be compared to the critical averments made in the published article. The article alleged:

44.1 Zunaid Moti and Moti Grouped companies formed part of the “clientele” of the VBS hawala scheme. (The April 2023 enquiry was centred around the purpose of a payment.)

44.2 A bank statement of Taintons Goods and Services (Pty) Ltd, one of the alleged hawala accounts, was published. It makes reference to payments apparently received by “jrt”, said in the article to be JR Technical Services, and a payment made to 7 Vlok Road Bryanson (Pty) Ltd on 14 December 2017. (The April 2023 query referred to payments allegedly made through the company Caydees Import and Export Services, which is now identified as one of the alleged hawala accounts, but not to Taintons Goods and Services.)

44.3 “The Moti Group was engaged in, at the very least, what looks like irregular cross-border capital transfer.” (The allegation of irregular cross-border capital transfer was not explicitly made in the April 2023 enquiry.)

44.4 “…Among the thousands of payments recorded in VBS statements are a set made to a number of Moti companies in late 2017 and early 2018 totalling just under R27-million.” (There is no indication that these transactions or amounts were put to Moti for comment.)

45. The April 2023 was simply not an effective opportunity for comment. I agree with Moti that the reportage in this article “goes far beyond the question amaBhungane sent (him) and the Moti Group”.

46. And yet it is still not the end of the difficulty amaBhungane faces. The third component of an effective right of reply, being a fair reflection of comment received, was also not met.

47. Sole points out that amaBhungane contemporaneously published two other articles, being “MotiFiles: Moti and the money men PART 1” (16 October 2023) and “#MotiFiles: Moti and the money men PART 2” (17 October 2023).

48. Sole points out that Moti’s complaints are not directed at those articles, even though those articles are arguably more critical of the Moti Group than the one this complaint is directed at. This may be so, but it does not change the complaint that exists.

49. amaBhungane then argues there was a fair reflection of the comment published in “Part 1”:

““Moti told us, “I have no knowledge or context to the name ‘Caydees Import and Export’ and have not dealt with them in any manner… I have not obtained bank statements of other entities (illegally or otherwise), so I cannot comment on the content thereof. The only facts that I know is that 7 Vlok Road Bryanston received funds into its bank account under the Ultra transactions.”

50. Says Sole: “The three articles, which contained links and cross-references to one another, would be read by the ordinary amaBhungane reader as a series.”

51. I disagree. A reasonable reader is no detective, as stated above. The two additional articles comprise 27 printed A4-pages. No reasonable reader will sift through a total of 34 pages of reportage in the three articles to look for Moti’s comment.

52. The sum total of “comment” from Moti reflected in the article itself, is:

“The VBS hawala forms one part of that story although Moti and his collaborators have denied any knowledge of the VBS system.”

53. I am not entirely convinced that the April 2023 response was “a denial of any knowledge of the VBS system”. The entire point of Moti’s complaint is that he was never questioned about his knowledge of a “VBS system” – either in April 2023 or thereafter. Objectively, he was asked a question a transaction from a bank account of Caydees Import and Export held at VBS Mutual Bank.

54. The hyperlinks also do not assist the argument. While hyperlinks can be important guides for readers and be a useful tool to link to lengthy responses received, it does not absolve a publication from the duty to have a fair reflection of the comment in the published article. Moreover, the hyperlinks referred to did not alert readers that the hyperlinks are provided for the purpose of reflecting Moti’s response. It might have made a difference if the hyperlink said something in the line of, “Moti earlier indicated XYZ” or even “Read Moti’s response here”.

55. For the above reasons – individually and collectively – there was no effective right of reply and amaBhungane breached clause 1.8. of the Press Code.

Complaint 3: “Manipulated picture”

56. The final complaint is about what Moti describes as a “manipulated picture” that appeared at the top of the amaBhungane article. It did not appear on the News24 and Daily Maverick sites.

57. Moti states that the image contains a “manipulated image of Simon Rudland and Bellarmine Chatunga Mugabe”, a “manipulated image of the VBS logo, together with Tshifhiwa Matodzi, the former chairperson of VBS and Andile Ramavhunga, the CEO of VBS”. The image also contains gold bars.

58. Says Moti: “By locating me at the centre of the picture, together with the gold bars and individuals on both my left and right, the clear implication is that I am at the centre of the proverbial ‘web’ of the articles focus…”

59. He further contends that the image was a contravention of clause 10.2. of the Press Code. This clause states:

“Pictures and video/audio content shall not misrepresent or mislead nor be manipulated to do so.”

60. This should be read in conjunction with clause 10.1, setting the requirement that pictures (and headlines and captions) shall not mislead the public and shall give a reasonable reflection of the contents of the report or picture in question.

61. amaBhungane disputes all the contentions. Sole says the image does not “misrepresent or mislead” as the article is indeed about a “gold-fuelled” hawala system and the mechanism used to transfer funds. He continues:

“The article never locates Mr Moti or his Group in the second category (gold industry money laundering), but squarely in the first category (circumventing exchange controls).”

62. To my mind, clause 10 of the Press Code aims to prevent two possible unethical practices:

62.1 The first is to use pictures and headlines to mislead readers about the contents of an article. A common example would be “click-baiting”. The picture (or headline) used by a publication does not give a fair reflection to a reader of what the actual content is about.

62.2 The second practice the manipulation of images. In the past, the most prominent example would be what is colloquially known as “photoshopping” images. Scandals about manipulation of images by media outlets are well-documented and widely condemned. This becomes an even greater concern with the advent of artificial intelligence tools to “enhance”, edit, or downright “faking” images. But the technologies aside, the real crux of the ethical concern is that a reader should be able to trust that what is presented to them as a picture of reality must be the reality the reader would have experienced if he or she were to stand in the shoes of the photographer when the picture was taken.

63. The second category set out above, the one of manipulation, is not in my view applicable to this case. This is because the image was not a picture purporting to present reality, but what is commonly referred to in newsroom as a “graphic”, meaning a graphic illustration that could be either an illustrative image, traditional graphs, flowcharts, text, a combination of the aforesaid, or anything in-between.

64. The image used by amaBhungane is clearly a composite illustrative image of five individuals, a background map of the SADC region with Zimbabwe in the centre, and what appears to be a generic stock image of gold bars and a logo of VBS Mutual Bank.

65. There is no credible suggestion that any of the pictures of the individuals were unethically manipulated.

66. This leaves only the question of whether the graphic illustration misled readers as to the contents of the article.

67. Every individual depicted in the graphic features in the article. VBS Bank features in the article, and the gold industry features in the article.

68. A reasonable reader reads an article, including all pictures, illustrations, and captions, as an entirety. (Appeal Decision: Hasina Kathrada vs TimesLine, 1 February 2022).

69. No reasonable reader would have been “misled” by the graphic.

70.  Consequently, there was no breach of the Press Code with the illustration.

Conclusion

71. amaBhungane breached clause 1.8. of the Press Code by not affording Moti with an affective right of reply.

72. The breach is a Tier 2 (serious) breach.

73. The remainder of the complaint is dismissed.

74. The publication is directed to:

74.1 Apologise to Moti for not affording him an effective right of reply.

74.2 Publish the above-mentioned apology at the top of the article and request Daily Maverick and News24 to do the same.

74.3 Moti’s comments on the specific allegations are to be included in the article and readers are to be alerted that the article was updated to reflect his comments. It must be made clear that the apology and update are in line with a ruling by Press Ombud Herman Scholtz, with a reference to the full text of this ruling on the Press Council’s website at www.presscouncil.org.za. It should be published with the Press Council’s logo.

75. Moti is to provide his comments to the allegations made in the article to amaBhungane. The publication retains an editorial discretion as to the length and contents of comment to be included in the article.

76. The wording of the apology and the proposed updates to the article shall, however, be approved by the Press Ombud prior to publication.

Appeal

The Complaints Procedure lays 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].

Herman Scholtz

Press Ombud

19 February 2024