Appeal Ruling in the matter between Alan Mukoki, former CEO of the Land Bank, and the Sunday Times


Wed, Feb 29, 2012

1.                  Introduction

1.1               The SA Press Appeals Panel (Sapap) chaired by retired Judge Ralph Zulman, met at the offices of the Press Council on May 8 to consider the March 19 appeal by Mr Alan Mukoki, former CEO of the Land Bank, against the Press Ombudsman's March 13 ruling on his complaint against the Sunday Times (the Newspaper). The other members of Sapap considering the matter were Ms Ethel Manyaka and Mr Franz Kruger (who drafted this ruling). Mr Mukoki was in attendance, but the Newspaper was not represented. It later emerged that the email notification of the date of the hearing to the Newspaper was sent to an incorrect address. As a result, the Newspaper was permitted to make a written response to the document Mr Mukoki submitted in support of his appeal. They did so, via their legal representative Mr Eric van den Berg, on June 4. Mr Mukoki responded to this on June 13.
1.2               At issue were two newspaper reports, one dated November 11 2007 and headlined How fat cats looted bank billions. The other was dated January 20 2008 and was headlined Land Bank boss 'must be charged'.
1.3               This ruling will address only the issues Mr Mukoki raised in his appeal, as outlined in his letter of appeal. The ruling will not deal with those issues he has accepted in the original ruling.
1.4               In its response, the newspaper argues that there is no basis for leave to appeal to be granted, apparently responding to the fact that Mr Mukoki's March 19 letter is headed "Application for leave to appeal…". The panel does not feel it necessary to consider this. Leave to appeal was granted and the appeal was considered, and the March 19 letter outlines the basis for the appeal itself.
2.                  Sanction
2.1               Mr Mukoki appealed on the basis of clause 1.6 of the Press Code. The Ombudsman’s ruling was that his judgment (which is also the subject of this appeal) should be published in edited and summarised form by the Sunday Times. Mr Mukoki’s appeal is that the issue of sanction is not totally clear, and he argues that the ruling implied the ”offending party shapes and controls its own punishment". 
2.2               The Sunday Times submission says Mr Mukoki’s argument is without merit as it is wholly inapplicable to the circumstances of the matter. The newspaper does not explain why the submission is without merit.
2.3               In fact, the editing of the ruling was done in the Ombudsman's office, not at the Newspaper. There was some discussion about whether the ruling should have been published sooner, but the Ombudsman informs us that he asked the newspaper to delay publication until the appeal was finalised.
2.4               The Sapap panel accepts the Ombudsman's handling of this aspect of the matter.
3.                  Signing of the Deloitte forensic report and disclaimers
3.1               These two matters are dealt with at length in Mr Mukoki's appeal, being handled in sections two and three, and are reiterated at length in his June 13 submission. They are grouped together here as they all make the argument that the newspaper took the auditor's report more seriously than warranted. Essentially Mr Mukoki's argument is based on the fact that the report was unsigned, and carried several disclaimers.
3.2               Although Mr Mukoki argued the point at great length before us, the Ombudsman had found in his favour, and the panel therefore did not find it necessary to consider the matter.
3.3               This panel confirms the Ombudsman's finding on this count, that the newspaper was in breach of clause 1.3 of the SA Press Code by presenting as fact what was only a qualified report.
4.                  R2-billion fraud
4.1               In sections 4 and 5, Mr Mukoki deals with that the Ombudsman's ruling that the newspaper should acknowledge its mistake in referring to a "R2-billion fraud", calling it unclear. He argues that it is not only the amount that is at stake, but the reference to fraud.
4.2               In his earlier submission of 14 November, he argued that there was no fraud, since all loans were fully secured. As he has since accepted, this is an argument he must carry out with the authors of the report or those further dealing with the accusations themselves. We have to consider whether the newspaper reported the content of the Deloitte report appropriately.
4.3               In his appeal, Mr Mukoki argues that the recommendation to charge him for fraud was based on a "trite law" interpretation of fraud, "that failure to disclose information is the same as fraud". In this case, the information withheld consisted of legal opinions suggesting that the LDF transactions contravened the bank's mandate. Mr Mukoki argues that this, in his view, limited basis for the fraud accusation should have been explained. He also provides a lengthy defence for his withholding the legal opinions. This is not relevant to the appeal.
4.4               Reading the auditor's report (p175, pp178-179), it is clear that the authors were recommending criminal charges on various counts, including fraud. 
4.5               We do not find that the use of the word "fraud" was inaccurate, but rule that the basis for the allegation should have been explained more clearly. The newspaper should do so, and should make it clear that the Deloitte report was qualified.
4.6               On the other hand, it is also clear that the newspaper was incorrect in claiming (on Jan 19) that the auditors recommended criminal charges of dishonesty and breach of duty. The recommendation here (pp 178 – 179) was for disciplinary action on these counts.
4.7               We find that the newspaper should correct this point.
5.                  Board of Directors
5.1               On the basis of a quote from p172 of the audit, Mr Mukoki argues that the report contradicts itself on whether the board had approved the LDF scheme. The particular quote of Mr Mukoki refers to states that the board "must have approved the LDF product in the event that the LDF product was implemented and managed in terms of Section 40 of the Land Bank Act". This is indeed an ambiguous formulation, but it is clear that the thrust of the report is that the board did not approve the plan. This emerges from passages cited by Mr Mukoki, and also from the recommendations made for action to be taken against him.
5.2               We confirm the Ombudsman's ruling on this question.
6.                  Overall ruling
6.1               We request the Ombudsman to draft a concise account of the matter, taking into account both his uncontested findings and our further rulings, and to instruct the Sunday Times to publish this account in a prominent position within 14 days after they receive it.
 
Appeal Panel:
Retired Judge Ralph Zulman (chair)
Ethel Manyaka
Franz Krüger