Edrees Hathurani vs. Sunday Times

SUMMARY

The headline to the story in dispute read, Lawyers snub SARS over bills – Billions in taxes on the line as legal firms turn off taps (published on 29 April 2018).

This ruling by Press Ombud Johan Retief was based on the Press Code that was in effect before 30 September 2022.

 

The article said that at least six law firms had been struggling to secure payment from SARS for work done on high-profile tax cases that could have returned return as much as R5-billion to state coffers. According to confidential information, reportedly seen by the journalist, attorneys were reportedly fighting for R7-million that they were collectively owed. The unpaid invoices reportedly included work done by “Africa Cash & Carry’s Edrees Hathurani”.

Hathurani complained that this reference inaccurately and unfairly implied that SARS had taken him, instead of his company, to court, and that he had owned that company – adding that it was unnecessary to mention his name in the first place. He added that the article inaccurately and unfairly implied that he had owned the company, that SARS was protecting him, and that the reportage had tarnished his dignity and reputation.

Retief referred to an earlier ruling by him in which he said it was wrong to create the impression that Africa Cash & Carry’s belonged to Hathurani (as if he was the only owner). Sunday Times was reprimanded for creating the false and unbalanced suggestion that Hathurani was “the” owner and was directed to publish a correction in this regard.

The rest of the complaint was dismissed.

 

THE RULING ITSELF

Complainant	Mr Edrees Hathurani
Lodged by	Mr Krian Rathinam, candidate attorney, Abbas Latib & Company
Date of article	29 April 2018
Headline	Lawyers snub SARS over bills – Billions in taxes on the line as legal firms turn off taps
Author of article	Kyle Cowan
Respondent	Susan Smuts, legal editor

Complaint                                            

Hathurani complains that the article, by stating:

·         “Africa Cash and Carry’s (ACC’s) Edrees Hathurani”, inaccurately and unfairly implied that SARS had taken him, instead of that company, to court, and that had owned that company – adding that it was unnecessary to mention his name in the first place; and

·         that “R1.2-billion in assets belonging to Hathurani’s Africa Cash & Carry”, inaccurately and unfairly implied that he had owned the company and that SARS was protecting him.

He adds that the reportage has tarnished his dignity and reputation.

The text

The article said that at least six law firms had been struggling to secure payment from SARS for work done on high-profile tax cases that could return as much as R5-billion to state coffers. According to confidential information, seen by the journalist, attorneys were reportedly fighting for R7-million that they were collectively owed.

The unpaid invoices reportedly included work done by “Africa Cash & Carry’s Edrees Hathurani”.

Cowan also reported that curator Sechaba Trust, “appointed to preserve R1.2-billion in assets belonging to Hathurani’s Africa Cash & Carry after SARS secured a preservation to recover tax monies allegedly owed”, had halted “preservation actions” after invoices had not been paid after a certain period.

Sechaba’s Cloete Murray reportedly told SARS in a letter that the position had become untenable, and that they were not in a position to fund the preservation actions of SARS from their own funds.

The arguments

Rathinam cites a previous finding of mine (Edrees Hathurani vs. City Press, 13 August 2017), in which he says I have found in his favour on a similar complaint.

Smuts replies that, contrary to the assertion in the complaint, SARS did in fact take Hathurani to court, along with African Cash & Carry, and sixteen other correspondents. She says this case was heard in chambers by Judge Bertelsmann on 10 July 2014, and resulted in a provisional preservation order. This order was confirmed by Judge Phatudi on 1 October 2014. “This is the matter that was alluded to in our story,” she explains. She argues there was no good reason why the story should not have mentioned Hathurani and that, if Hathurani’s dignity and reputation were tarnished, it was because of his own actions and not because of the reportage. The legal editor justifies the reference to “Hathurani’s African Cash & Carry” by quoting the same previous finding of mine. She cites information from Hathurani’s attorneys in this regard who stated, “Mr Hathurani is a trustee of the Edrees Hathurani Family Trust and became involved in the management of Africa Cash and Carry after the resignation of Aysen in June 2013. Mr E Hathurani was subsequently prevented by order of court from acting in any capacity at Africa Cash and Carry from July 2015”. From this, she argues that Hathurani clearly was “both part owner and involved in the management of Africa Cash and Carry at the time of the events alluded to in the story”. Smuts also argues that there was nothing in the story to suggest that Hathurani was the only owner, nor was there any reason to state that he was not the only owner – the focus of the story was not on him or on Africa Cash and Carry, but on the non-payment of legal bills by SARS. “There was no need to explain in any detail what exactly the relationship between Mr Hathurani and Africa Cash and Carry was, since this made no difference to the point of the story and, in any case, [the article] cast no aspersion on Mr Hathurani’s role in Africa Cash and Carry,” she submits. She adds it is unclear why Hathurani thinks the story implied he was being protected by SARS.

Hathurani replies that, if the preservation order was taken against ACC and not against him in his personal capacity, the mentioning of his name was defamatory and designed to be sensationalist. He adds that the story only mentioned him in regard to this preservation order, despite the fact that there were other parties involved.

“This shows that the article was designed to be defamatory of him, notwithstanding the fact that at the time of the preservation order Mr Cassim Aysen was the director of Africa Cash and Carry, its CEO and CFO and the financial person in charge of Africa’s affairs and the liaison between SARS and Africa,” he argues.

He says that Aysen was also directly in control of the business and liaison with SARS at the time of the Africa audits and SARS tax assessments. Moreover, at the time of the SARS audit, he was not even a director of ACC for the period under audit. “Had the journalist properly investigated his information, he would have discovered this before putting pen to paper,” he submits.

Hathurani insists that the story should not have mentioned his name, as he has never been convicted by SARS – he says the same purpose could have been achieved by the use of the name of “Africa Cash and Carry” on its own. He says it is also unclear why he would be responsible for SARS’s follies. “Regrettably the only conclusion that can be drawn is that this article was written to impugn malice on [me],” he argues.

He also denies that his actions had at any point resulted in defaming his name or reputation, as argued by Smuts. This statement was in itself defamatory, and further cast light on the newspaper’s attitude towards him, he submits.

Hathurani also denies that he ever was a director of ACC. He says four trusts have shares in Africa Cash and Carry, and he is a trustee of one of these trust entities. Therefore, he concludes, it is inaccurate to refer to the company as “Hathurani’s Africa Cash and Carry”.

He reiterates that the story created the false impression that he was the sole owner, despite Smuts’s argument to the contrary.

In conclusion, Hathurani argues that, if the focus of the article was on the non-payment of SARS’s legal bills, then there would have been no reason to mention his name, as the same effect could have been reached by the mentioning of ACC on its own.

He adds that, by using his name the newspaper created the impression that SARS was protecting him, which was defamatory of him.

Analysis

‘Africa Cash and Carry’s Edrees Hathurani’

Both parties refer to a previous finding of this office, in the matter of Edrees Hathurani vs. City Press.

In this matter, Hathurani’s complaint inter alia was that it was wrong to refer to him as the owner of ACC, and that it was inaccurate to state that SARS had issued a claim against him, as the claim was against this company. He concluded that it was therefore uncalled-for to mention his name in the first place, since he and ACC were two separate entities.

This part of the complaint indeed corresponds (partly) to the one at hand.

In this finding, I have previously established that ACC was owned by four family trusts (namely those of Cassim Aysen, Edrees Hathurani, Mohamed Hathurani and Iqbal Hathurani), and that the complainant was merely a trustee of one of the (four) family trusts which collectively owned the company.

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

However, I have added that Hathurani could rightly be described as a co-owner, as he was a trustee of one of the (four) family trusts which collectively owned the company, which means that a reference to “an” owner, or “a co-owner”, would have been fair and correct.

I also said that, because he was indeed still involved in ACC, I believed the newspaper was justified to mention his name – as long as it was clear that he was not the only owner, and that he – as a co-owner – faced a claim against the business (and not in his personal capacity).

I concluded that this potentially misleading reportage called for some clarification, but that it was not so serious as to warrant an apology. I therefore characterised this as a Tier 1 offence. I then reprimanded the newspaper for calling Hathurani “the” owner of ACC, without asking the newspaper to apologise to him.

A difference between City Press’s reportage on this matter, and that of Sunday Times, is that the latter has not explicitly called him “the owner”, but in fact used the words “Africa Cash and Carry’s Edrees Hathurani.”

However, this difference is cosmetic – Sunday Times’s expression means exactly the same.

In this regard, I agree with Smuts’s argument that there was no need to explain in any detail the relationship between Hathurani and ACC, since this made no difference to the point of the story. However, I need to add that there was also no need to create the false impression that ACC belonged to him (as if he was the only owner).

I am therefore repeating my earlier finding in this regard, in that it was wrong to create the impression that ACC belonged to Hathurani (as if he was the only owner). However, I again believe that this was not so serious as to warrant an apology.

I also do not blame the newspaper for mentioning Hathurani’s name in this regard, even though the story has not involved him in his personal capacity.

‘R1.2-billion’

Hathurani has not made out a convincing case that the statement “R1.2-billion in assets belonging to Hathurani’s Africa Cash & Carry” inaccurately and unfairly implied that SARS was protecting him.

Finding

The use of the words “Africa Cash and Carry’s Edrees Hathurani” have created the wrong impression that he was “the” owner of that company. This was in breach of the following sections of the Press Code:

·         1.1: “The media shall take care to report news truthfully, accurately and fairly”; and

1.2: “News shall be presented in context and in a balanced manner…”

The rest of the complaint is dismissed.

Seriousness of breaches

Under the headline Hierarchy of sanctions, Section 8 of the Complaints Procedures distinguishes between minor breaches (Tier 1 – minor errors which do not change the thrust of the story), serious breaches (Tier 2), and serious misconduct (Tier 3).

The breach of the Press Code as indicated above is a Tier 1 offence.

Sanction

Sunday Times is reprimanded for creating the false and unbalanced suggestion that Hathurani was “the” owner of ACC, and is directed to publish a correction in this regard.

The newspaper is directed to publish:

·         the reprimand, with the correction:

o   on the same page as the offending story, with a headline containing Hathurani’s surname; and

o   online, at the top of the offending story.

The text should:

·         be published at the earliest opportunity 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; 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 [email protected].

Johan Retief

Press Ombud