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Appeal Decision: City Press vs National Health Laboratory Services

Mon, Jul 24, 2023


In the matter between:

City Press                                                                                                                   Applicant


National Health Laboratory Services                                                                Respondent


  1. City Press (applicant) seeks leave to appeal the Ruling by the Deputy Ombud dated 25 May 2023. The Ruling was on a complaint by the National Health Laboratory Services (respondent/NHLS) against the story published by the applicant on 19 February 2023 with the headline: “National lab services in crisis”. The contents of the story raised a number of issues which pointed to maladministration at the service, which included a large payment for the purchase of the equipment that was allegedly not delivered, the purchase of vehicles which were not put to use but lay idling, the employment of excessive staff etc. It concluded that there was a crisis at the respondent. The story also said that the Chief Executive Officer was shielded against accountability. The respondent denied those allegations and complained that the report was inaccurate and false in many respects. Amongst the complaints was that the applicant said an amount of R22m was irregularly paid out by the CEO, which was not recovered, whereas R21m was recovered and the balance made good by the insurance company. The respondent also complained that it was not given the opportunity to respond to some of the allegations, while its responses to others were not reported. A very detailed exchange occurred between the parties. The applicant stuck to its story and argued that it was based on reliable internal sources.  In the end, the Deputy Ombud upheld some complaints, while dismissing others. The Ruling imposed certain sanctions. The applicant seeks leave to appeal the Ruling.
  2. In his Ruling, the Deputy Ombud gave a summary of the content of the report, as well as the complaint, as follows:

“The report

4.      The report outlies elements of an alleged crisis at the NHLS. The key claims are:

4.1     that R282m was paid to a Chinese company for Covid testing materials and equipment that were never delivered;

4.2     that the NHLS CEO, Karmani Chetty, bought 60 Mercedes Sprinter buses for use as mobile clinics without planning for the necessary resources. The report claims she equipped them from existing laboratories, and that almost all of them are now standing unused;

4.3     that Chetty protected a senior manager against disciplinary consequences after millions were fraudulently diverted into an improper account; and that

4.4     two managers were improperly appointed ………

“5.     Prof Buch (of the respondent) complains that City Press breached (clauses) 1.1, 1.2 and 10.1 of the Press Code. Though not mentioned at the outset, clause 1.8 requiring allegations to be put to the subject of a report for comment, comes up prominently in the complaint”.

The Deputy Press Ombud then dealt in detail with each complaint as briefly set out below – to which I add my own observations where necessary.

  1. Complaint 1: Unfair and sensationalist presentation – crisis

The Ruling upheld this complaint. It noted, correctly, that the term “crisis” is a strong one; it would require a widespread dysfunction of the institution. In my view, while there were no doubt some challenges, some of them serious, I am not inclined to think that the Ruling was wrong to say the term “crisis” was too strong. I do not think that the report produces proof that the core functionality of the laboratory was paralysed. The Ruling was correct to say that only a brief reference was made to forensic services (the core function) and then only in very generalized and speculative statements.

  1. Complaint 2: Inaccuracy – shielding a financial manager from disciplinary steps over R22m fraud

The main elements of this complaint are that, firstly, the manager was shielded in relation to the fact that money was irregularly paid out; whereas the respondent’s version is that the manager was ill and later resigned. There is certainly some suspicion about whether the manager was genuinely ill or avoided accountability. The story could have, for example, said that there were some health issues, or even alleged health issues, which prevented action against the manager concerned. The second element is the issue of the “missing R22m”. The Ruling says the story should have mentioned that some R21m was recovered, with the remaining R1m paid out by the insurance company. This information was material to the issue of the missing R22m”; (own emphasis). This would have indicated that steps were taken to recover the money and therefore that it was not “missing”. In my view, the complaint was correctly upheld.

  1. Complaint 3: Inaccuracy: Material worth R282m ordered was not delivered: This complaint was dismissed.
  2. Complaint 4: Inaccuracy – wasteful purchase of 60 mobile testing centres. Respondent denied the report that 90% of the purchased vehicles were idling; it said that some of them were deployed elsewhere. The Ruling was correct to say that that should have at least been mentioned in the report. It was material to the question whether the testing centres were idling, doing nothing. The complaint was therefore correctly upheld.
  3. Complaint 5: Inaccurate reporting: recruitment of two managers.

The respondent says the recruitment was done in a procedural manner. The applicant said they were questionable and said its information was corroborated but, as the Ruling says, does not say how. It finds the reporting confusing. Of course, if the report had indicated in what manner the allegation was corroborated without disclosing its sources, the respondent would have been able to respond. Under those circumstances, the Ruling cannot be faulted.

  1. Complaint 6: Failure to request comment.

The Ruling sets out several respects where the applicant failed to seek comment, for example, about the issue of “devastating effects” on the organisation and about the plan for the use of the mobile clinics post-Covid.  Looking at the respondent’s response, it appears that it had some responses worth reporting; for example, one of the complaints raised by the respondent was that, had the applicant asked it about the alleged purchase of “equipment from China, applicant would have been told that it was “reagents” that were bought, and not “equipment”. The Deputy Ombud says that he does not believe that the “newspaper’s confusion between reagents and equipment is serious enough to warrant a finding that it (applicant) failed to ask for comment on this point”. With respect, I think the Ruling has been too generous to the applicant, particularly as the Ruling continues to say, “there is undoubtedly a clear difference between the two”. I do not think that the respondent should have been expected to speak to “equipment” whereas it was asked about “reagents”. It follows I would have upheld this aspect of the complaint as well; for the rest I agree with the Ruling that they should have been put to the respondent.

  1. To grant the application leave to appeal, there ought to be reasonable prospects of success on appeal.
  2. In its application for leave to appeal, the applicant adds nothing new to the merits of its case. It goes into a hair-splitting exercise criticizing the Ruling. I have added my reasons why the Ombud was correct in his approach and reasoning; I add a few more below.
  3. I have taken into account the applicant’s submissions in its application for leave to appeal. The “crisis”, if any, should be with regard to the respondent’s core business, and not just for example, the testing of TB, a point which seems to be lost on the respondent, looking at its argument in its application on the issue of the headline. Properly understood, the Ruling does not say the headline should have been put to the respondent, as the application seems to suggest; the issue was whether the headline rhymed with the contents of the story. One understands the applicant’s concern about protecting its sources by carefully avoiding to quote from the documents for example; but, as the respondent says, the applicant did not offer the documents to the Deputy Ombud in confidence. For his part, in not calling for the documents, the Deputy Ombud was exercising his discretion, which has not been shown to have been wrongly exercised.
  4. As the respondent says, the “crisis” was with reference to the alleged non-delivery of instruments; and that if it was with reference to the testing of “TB”, the report should have said so. As the respondent says, what was required to be put to it was not the headline, but matters relating to the content of the story. Nothing reported justified the use of the word “crisis”. Respondent’s reply to the application for leave to appeal adequately demonstrates its lack of prospects of success.
  5. The application is dismissed.

Dated this 24th day of July 2023.

Judge B M Ngoepe, Chairperson, Appeals Panel