Present at a Zoom hearing, held on 16 February 2021:
The complainant:
Mr Gary Pritchard, of Cox Yeats Attorneys
Mr Mpho Dipela
The respondent:
Mr Charl du Plessis, of Willem de Klerk Attorneys
Mr Rapule Tabane, Political Editor, City Press
The panel:
Prof Karthy Govender, public representative on the Adjudication Panel
Ms Heather Robertson, press representative on the Adjudication Panel
Johan Retief, acting Press Ombud
Particulars
Complaint number: 8385
Submitted by: Mr Gary Pritchard
Date of article: 4 October 2020
Online: Yes
Author of article: Sizwe sama Yende
Respondent: Rhodé Marshall, managing editor
1.1 Mr Mpho Dipela’s complaint boils down to the following, namely that the newspaper:
1.1.1 has published statements in both the story and its headline that inter alia allege, expressly or impliedly, that he was involved in irregular transactions (theft and money laundering) concerning the Police and Prisons Civil Rights Union (Popcru) and its related companies;
1.1.2 omitted relevant information provided by him;
1.1.3 sought to link legitimate business transactions to Popcru leadership squabbles; and
1.1.4 defamed him and harmed his reputation.
1.2. He asks for a retraction and an apology in every medium in which the story in dispute was published, stating that:
1.2.2 it was inaccurate and wrong to state or imply that he was involved in wrongdoing in relation to Popcru and its affiliated entities.
The media shall:
10.1 Headlines … posters shall not mislead the public and shall give a reasonable reflection of the contents of the report … in question.
3.2 Sizwe sama Yende wrote SNG Grant Thornton reported this matter because it could not find any “business rationale” for the deposit of the money from Royale Energy Group to Workerslife Direct (a subsidiary of Popcru) on 8 January 2019.
3.3 The money was reportedly deposited by Dipela, the then Popcru Group of Companies (PGC) chief financial officer, who was also a nonexecutive director at Royale Energy, as was Popcru president Zizamele Makhaza at the time.
3.4 (PGC Group is Popcru’s investment arm; and the Popcru Trust holds Popcru’s interest in PGC Group. Popcru Trust also holds 100% of the shares of Royale Energy Group.)
3.5 The following sentence contained the gist of the story: “The duo’s association has prompted their opponents in Popcru to accuse them of being part of irregular transactions at PGC.” (The “duo” referred to Dipela and Makhaza.)
3.6 The journalist also stated, “Popcru’s national executive committee (NEC) has been divided over allegations of theft, misappropriation of funds and money laundering in the [PGC]”, adding that Workerslife Direct (WLD) was a subsidiary of PGC.
4.1 It is important, for context, to have a proper understanding of events that have led up to the lodging of this complaint with the office of the Press Ombud.
4.2 This is how Mr Gary Pritchard of Cox Yeats Attorneys sketched relevant events and came to some conclusions in this regard:
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4.3 City Press journalist Msindisi Fengu sent an email to Dipela on 1 October 2020, seeking information apropos an action by E-Vehicle Mobility (Pty) Ltd against Legacy Auto (Pty) Ltd and two other companies in the Legacy Motor Group (LMG) Group. 4.4 He inter alia asked if there were any missing PGC funds used to invest in LMG or any other company including E-Vehicle Mobility by Dipela, and what the latter’s reaction was to perceptions that he was involved in the said missing funds. 4.5 These “missing funds” related to statements previously published by City Press that Dipela was involved in. They concerned:
4.6 These statements allege, implicitly or impliedly, that Dipela “has been involved in the theft of large sums of money from Popcru and money laundering”. 4.7 The author of the article previously sent queries to Dipela a week or so prior to publication (on October 4). 4.8 After further queries followed, Dipela instituted an urgent application to the Gauteng Local Division of the High Court, seeking to interdict and restrain the newspaper from publishing another story (on October 7) on the same matter. 4.9 On October 8, the newspaper undertook the following: “[City Press] hereby undertake not to publish or cause to be published any statements that allege, expressly or impliedly, that [Dipela] was involved in any irregular transactions concerning [Popcru] and its related companies, pending the outcome of a complaint to be lodged with the Press Ombud against City Press by Dipela within 10 (ten) days of date hereof. Should [Dipela] fail to lodge his intended complaint against City Press within the aforesaid time, this undertaking shall lapse.” 4.10 This complaint should be seen against this background. 4.11 The statements about “reportable irregularities” appear to have originated in two letters issued by auditors SNG Grant Thornton (SNG) to the Irba during July 2019. 4.12 These irregularities are:
4.13 Pritchard submits: “SNG’s findings were incorrect and SNG arrived at them as a result of a failure to properly interrogate the transactions referred to despite being provided with sufficient information and an opportunity to do so.” 4.14 Prior to publication, Dipela responded to Yende’s queries through his PR, Madelain Roscher. She provided explanations and documents relating to:
4.15 Despite the above-mentioned correspondence, the newspaper published an article in which Yende alleged that:
4.16 After Yende’s queries, but before publication, Fengu again sent questions to Dipela – this time relating to litigation between the LMG Group and EVM. (Seventy-five percent of the shares in the LMG companies are owned by Royale Energy, which is a wholly owned subsidiary of Royal Energy Group which, in turn, is owned by Popcru Trust.) 4.17 Despite the fact that the litigation between LMG and EVM had nothing to do with PGC or Popcru, Fengu nevertheless sought to link the two. His questions to Dipela implied that:
4.18 On October 2, Roscher responded to Fengu’s email. She:
4.19 City Press did not engage with Dipela with regard to these further queries – it simply went ahead to publish, without due regard to his responses (which are set out more fully below). |
5.1.1.1 Dipela complains that, despite his detailed responses (see Sub-section 5.2, where this matter is dealt with), the article still falsely alleged that:
5.1.1.2 He argues that any reasonable reader following the series of articles in City Press would conclude that the R200-million referred to in the previous article and the same amount mentioned in the article in dispute were “both misappropriated funds in the form of misdirected referral fees”. Despite this, he submits, City Press attempted to draw a distinction between the referral fee issue flagged in the SNG letter and the R200-million misappropriated funds (which the article left as an unresolved issue).
5.1.1.3 Dipela submits that, at the very least, this reflected a failure on the newspaper’s part to verify doubtful information, “but more likely demonstrates a distortion or misrepresentation of the facts…” Therefore, he argues, the reportage cannot be said to be truthful, fair and accurate.
5.1.1.4 In conclusion he says, “The information provided demonstrates that there is no substance to the insinuations that there was anything untoward about [his] involvement with, inter alia the:
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5.1.1.5 Marshall points out that the article referred to the transaction as “suspicious”, while the sub-headline referred to it as “irregular”. 5.1.1.6 She submits it is a fact that SNG Thornton raised a red flag over this transaction and reported the matter to the Irba. 5.1.1.7 She also points out it was SNG Thornton’s letter that says Dipela deposited the money – not the newspaper. 5.1.1.8 The editor adds:
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5.1.1.9 In his response to Marshall’s reply, Pritchard denies that the R18-million transaction was irregular – he says it was a “normal business transaction in the ordinary course of business between the two companies”. He refers in this regard to a letter of confirmation by Absa, dated 19 July 2019.
5.1.1.10 He says the allegation that Dipela was laundering money through his personal accounts was reckless, given the proof provided by Dipela. This, he argues, amounted to malicious reporting which was defamatory of him.
5.1.1.11 Regarding the alleged misappropriation of an estimated R200-million, he says he cannot respond as Dipela was not involved with PGC at the time.
5.1.1.12 Pritchard says the main headline and the sub-headline were meant to sensationalise and to attract attention to the article.
5.1.1.13 “Furthermore, to state that ‘City Press has seen a … letter…’ does not simply give [the newspaper] the right to publish everything that it sees without investigating the veracity of that which is stated in a written document.”
5.1.1.14 He also submits that the story never identified the “faction in Popcru” that allegedly accused Dipela and Makhaza (Cebekhulu) or irregular transactions at PGC. “One can only draw the conclusion that the journalist is prepared to print anything that is told to him by anyone, without demur, in order to create a story.”
Analysis
5.1.1.15 The panel has taken cognisance of two stories about the same matter published on 10 November 2019 and 16 February 2020 respectively (headlined, Hawks probe mars Popcru congress, and, Union leaders and the missing R200m).
5.1.1.16 This was necessary for the panel to understand the context of the article in question, but that was so far as we could go – those stories were not the subject of the complaint that we were dealing with.
5.1.1.17 So then: It is not in dispute that, at the time of publication, (a) audit firm NSG Grant Thornton had reported a suspicious transaction of R18-million to a subsidiary of Popcru and (b) the FIC’s investigation had still been underway.
5.1.1.18 The complaint is that the allegations were inaccurate. Therefore, the central question is whether City Press could reasonably have been expected to verify allegations made in the audit report.
5.1.1.19 The answer to this question has to be an unequivocal “no”. That was the FIC’s job and responsibility – not that of the newspaper.
5.1.1.20 This means that, even if the allegations in the audit report were false, the newspaper still was justified to publish them at a time when the FIC has not yet concluded its investigation. City Press was reporting on a report – and had every right to do so.
5.1.1.21 Also, there needs to be some understanding that the complainant’s denials of the allegations did not render the allegation per implication false – the denials merely represented the other side of the story, which was for the FIC to decide on. Therefore, it really does not matter how much “evidence” (which indeed was quite elaborate) was given to the newspaper to contradict the allegations in the audit report – City Press would have overstepped its boundaries if it even attempted to do so.
5.1.1.22 The same goes for this panel.
5.1.1.23 Given the above, the only other question before the panel is not if the allegations complained about were true or false, but rather whether City Press accurately reported the contents of the audit report.
5.1.1.24 The panel has no evidence to the contrary, and neither does Dipela complain that the newspaper has misrepresented the content of the audit report.
5.1.1.25 The only conclusion the panel is left with regarding this part of the complaint, is that the reportage at the time of publication was reasonable and fair.
5.1.1.26 The panel concludes that it was.
5.1.2 Damning allegations published: The headline
5.1.2.1 The headline read, Money laundering allegations haunt Popcru – An irregular transaction of R18 million paid to one of Popcru’s subsidiaries has raised red flags among auditors about misappropriation of funds.
5.1.2.2 Dipela complains that the headline either stated or implied that he had been involved in irregular transactions (theft and money laundering).
5.1.2.3 The newspaper contests this.
Analysis
5.1.2.4 The panel is satisfied that the main headline reasonably reflected the content of the story – there indeed were money laundering allegations, and it would have been odd if it did not “haunt” Popcru.
5.1.2.5 The same goes for the sub-headline – with the exception of the use of the word “irregular” (transaction). At the time of publication, it was still an allegation that the transaction was irregular. It was true that a “suspicious” transaction of R18-million had been reported to the FIC (as stated in the introductory sentence of the story) – but “suspicious” does not necessarily translate into fact. The FIC has not yet made any decision on this transaction.
5.1.2.6 What the use of the word “irregular” has done, is that it in fact turned a question mark (an allegation) into an exclamation mark (a fact).
5.1.2.7 Therefore, the use of the word “irregular” was not a fair and reasonable reflection of the content of the story (that correctly labelled the transaction “suspicious”). The use of the word “suspicious”, instead of “irregular”, or a “notice of an irregular transaction”, or something of the like, would have done the trick.
5.1.2.8 In conclusion, then, while we find the use of the word “irregular” problematic, the word “suspicious” did appear a few words later. The panel is satisfied that there was no unequivocal intent to misrepresent. However, our view is that more care ought to have been taken to more accurately reflect the essence – that the auditing company was concerned enough to report a suspicious transaction which was then referred to the FIC.
5.2 Comments ignored
5.2.1 Dipela complains that the newspaper omitted relevant information that was provided by him.
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5.2.2 Marshall says Irba chief executive officer Jenitha John confirmed to City Press that it did receive the report or complaint from SNG Grant Thornton and that the Irba uploaded all supporting documentation from SNG to the Financial Intelligence Centre's (FIC) portal for an investigation. 5.2.3 This transaction, she adds, took place against the backdrop of infighting within Popcru about allegations of misappropriation of funds concerning the PGC’s subsidiaries. 5.2.4 She says City Press extensively quoted Dipela’s response pertaining to the story, which is largely about the R18-million transaction. 5.2.5 The editor says City Press adequately carried Dipela’s response regarding the R18-million transaction. She refers to the following:
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5.2.6 Pritchard says that, while it is true that the reporter quoted certain responses from the document provided by Dipela’s PR agent PRWorx, he quoted selectively by omitting relevant information.
5.2.7 He especially refers to a:
Analysis
5.2.8 The complaint is that the newspaper omitted material information provided by the complainant.
5.2.9 At the hearing, the panel asked Pritchard to point out what material he was referring to, as he was unclear in his complaint about exactly what was omitted.
5.2.10 In the end, Pritchard came up with a response given to City Press in 2019.
5.2.11 After consultation with Dipela, he also pointed the panel to the complainant’s responses to Sama Yende, dated 25 September 2020. This document was much more relevant to the panel than the one given in 2019, given the time that has lapsed since then.
5.2.12 In order for the panel to be able to make a reasonable decision in this regard, we asked Pritchard to specify which response he referred to.
5.2.13 He then pointed out the following:
5.2.14 Firstly, the story never stated that the R18-million transaction was not “valid”. A validation by a bank cannot by itself guarantee that a transaction was above board. Given that fact, the panel opines that this specific omission was not material.
5.2.15 The sentence quoted above can also not be seen as material, as the publication of that statement would not have changed the thrust of the article.
5.2.16 Based on the above, as well as on the quite lengthy reporting of Dipela’s response in Yende’s article, the panel has no reason to uphold this part of the complaint.
5.3 False link
5.3.1 Dipela complains that the newspaper sought to link legitimate business transactions to what appeared to be political squabbles among leadership of Popcru. “This is irresponsible reporting in light of the information provided and documents that were provided to City Press prior to publication,” he argues.
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5.3.2 Marshall says Popcru’s political squabbles cannot be divorced from how the business arm was or is alleged to be run. “Therefore, the R18 million transaction, which City Press’ story is based on, is intertwined with the political squabbles that emanated from the differences in the manner the businesses were or are run.” 5.3.3 She adds that, if there was no complaint about the affairs of PGC, there probably would be no story for City Press to report. She therefore denies that it attempted to link unrelated matters. |
5.3.4 Pritchard replies that Marshall neither divulges from where the allegations of political squabbles in Popcru came from, nor from where the allegations pertaining to the businesses of Popcru emanated – “other than the SNG complaint to IRBA and seeks to inextricably link the two unrelated matters”.
5.3.5 “It is correct that there would be no story for the City Press to report if the two matters were dealt with separately, as they should have been.”
Analysis
5.3.6 The question was if it was wrong to link a business transaction with political squabbles within Popcru.
5.3.7 The debate on this issue was peculiarly scant – and perhaps that was for a good reason, as it would be difficult to divorce politics from business.
5.3.8 Besides, the article merely stated that Popcru’s national executive committee had been divided on this matter. The panel accepts that this was quite possible. We also note that Dipela does not dispute that there was a division in this executive committee – he merely complains about the link that the article made between the transaction and “politics”.
5.3.9 The panel finds the reporting on this issue to be reasonable.
5.4 Defamatory, harmful
5.4.1 Dipela complains that the article attributed conduct of theft and money laundering to him and argues it is therefore defamatory. He says such allegations are particularly harmful to him as the reporting has had a “material impact on his business relations and his ability to conduct his business affairs”.
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5.4.2 Marshall replies that the newspaper sought to report truthfully, accurately and fairly. She says it was reasonable to publish the allegations and denies that the reporting was malicious or defamatory of Dipela. “The statements we published are based on a complaint by IRBA to the FIC and matters in the public domain about the conflict within Popcru concerning its businesses,” she affirms. 5.4.3 She adds the:
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5.4.4 Pritchard rejects Marshall’s response. He submits, “[Dipela] provided all pertinent information to the City Press in order for the [newspaper] to carefully consider the matter prior to printing the article … and clearly did not take into account any of the factual information provided by [him]. It rather sought to rely on unsubstantiated allegations from others to create a story and thus defame [Dipela] in the process.”
5.4.5 He also notes that Marshall does not identify the “some in Popcru” and argues it is unfair to expect of Dipela to “merely accept that they are unidentified persons within Popcru that are making certain unsubstantiated allegations and to accept the repercussions flowing from the article without challenge.”
5.4.6 He emphasises that City Press relied on information allegedly provided by unidentified parties within Popcru – information which the journalist failed to verify prior to publication.
Analysis
5.4.7 Given the fact that the panel has dismissed the two main parts of the complaint, it follows that we have no ground to find for the complainant on this issue.
6.1 The complaint regarding the story as well as the main headline is dismissed.
6.2 The sub-headline was in breach of Section 10.1 of the Press Code that says, “Headlines … shall not mislead the public and shall give a reasonable reflection of the contents of the report or picture in question”.
7.1 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).
7.2 The breach of the Press Code as indicated above are all Tier 2 offence.
8.1 While the panel found the article to be reasonable and fair, we were of the view that the inaccurate use of the word “irregular” conveyed the impression that a finding had been made that there had been an irregular transaction. This was not so and the publication must apologise for this inaccuracy which could have been avoided if more care had been taken.
8.2 The newspaper is directed to publish the apology prominently on all its platforms where this sub-headline appeared (print and online), with a headline containing the words “apology” or “apologises”, and “Dipela”.
8.3 The text should:
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 Khanyim@ombudsman.org.za.
Karthy Govender, public representative on the Adjudication Panel
Heather Robertson, press representative on the Adjudication Panel
Johan Retief, acting Press Ombud