Eskom Pension and Provident Fund vs Business Maverick
Thu, Jul 23, 2020
Modus Operandi 1 Particulars of Complaint 2
Relevant Sections of the SA Press Code 2
Some Perspectives 3
- First complaint 5
- Second complaint 10
- Third complaint 13
- Fourth complaint 17
- Fifth complaint 19
- Sixth complaint 22
- Findings 25
- Seriousness of transgressions 26
- General comments 26
10. Sanction 27
11. Appeal 28
This complaint consists of six separate complaints, which are all about the same issue, by the same complainant, against the same publication. I shall adjudicate the six complaints in isolation, after which I shall make some general remarks (which, I believe, was the justified intention of the complainant).
Particulars of complaint
Complaint number: 7796
Lodged by: Mr Itayi Gwaunza from ENSafrica; later replaced by Ms Karien Norval from Cheadle Thompson & Haysom Inc Attorneys
Headlines and dates of publication:
- Article 1: Eskom is facing another demon in the dark — its R140bn pension fund (9 January 2020;
- Article 2: How the Eskom Pension and Provident Fund is being milked (27 January 2020);
- Article 3: Brian Molefe’s Eskom Retirement Fund saga is just the Tip of an Iceberg (6 February 2020);
- Article 4: Eskom’s Pension and Provident Fund vendors claim all tenders are on hold; the CEO says it is ‘business as usual’ (17 February 2020);
- Article 5: Court documents suggest the Eskom Pension and Provident Fund is in crisis (25 February 2020); and
- Article 6: South Africa: Untangling a Conflict of Interests At the Eskom Pension and Provident Fund (1 March 2020).
Author of articles: Ruan Jooste, associate editor
Respondents: Tim Cohen, editor, as well as Jooste
Relevant sections of the SA Press Code
The sections of the South African Press Code relevant to the six complaints below are:
- 1.1 “The media shall take care to report news truthfully, accurately and fairly”;
- 1.2 “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”;
- 1.3 “The media shall present only what may reasonably be true as fact; opinions, allegations, rumours or suppositions shall be presented clearly as such”;
- 1.8 “The media shall seek, if practicable, the views of the subject of critical reportage in advance of publication, except when they might be prevented from reporting, or evidence destroyed, or sources intimidated. Such a subject should be afforded reasonable time to respond; if unable to obtain comment, this shall be stated”; and
- 3.3 “The media shall exercise care and consideration in matters involving dignity and reputation…”
The Eskom Pension and Provident Fund also often mentions the following sections:
- 1.9 “The media shall state where a report is based on limited information, and supplement it once new information becomes available”; and
- 6 “The media may strongly advocate their own views on controversial topics, provided that they clearly distinguish between fact and opinion, and not misrepresent or suppress or distort relevant facts.”
I am not entertaining those, as Section 1.9 is incorporated in Section 1.8 (with one exception), and Section 6 is not dealing with hard news, but rather with a certain cause/objective that a publication is pursuing.
Let me state at the outset, clearly and unequivocally, that this complaint – all six articles on each own, as well as all of them seen together – is not about the merits of the reportage. The complaint, consistently focuses on Business Maverick’s (BM’s) alleged neglect to give the Eskom Pension and Provident Fund (“the Fund”) a right of reply, and where it did do so, its alleged repeated neglect to ask relevant questions about specific allegations.
The implication is clear: If BM has neglected its duty to give the Fund a right of reply within a reasonable period of time, this could have led to inaccurate, misleading and unfair reportage – with the possibility of unnecessarily tarnishing its reputation and dignity.
This means that the finding is also not going to be on the merits of the allegations levelled against the Fund.
See my comments about dignity and reputation under sub-section 8.7 in this regard.
Having said that, I am quoting some of editor Tim Cohen’s opening remarks on the reasons behind the BM’s reportage. I am doing that to give some context to the seriousness of the issues.
Cohen says the reason BM began examining the Fund was that several events took place which gave the publication, as well as many of the Funds’ over 80 000 members, some “real concern”.
These are his reasons:
- It transpired that the fund had not pursued with any real sense of purpose the return of approximately R10-million illegally granted to the former Eskom CEO Brian Molefe;
- It appears the fund fired its data administrator last year, but the appointment of a new software manager has been a disaster, and BM does not even know if it has formally taken place yet. “This is an extremely serious issue since the fund’s crucial function, obviously, is to distribute pensions to members. Not being able to do so accurately, legally and on time is of enormous concern to its members, many of whom rely exclusively on these pensions to live”;
- It appears the fund has granted its former CEO an enormous tranche of funds to manage, in what seems to us an obvious conflict of interest, even though, it turns out, the commission took place after a (very short in our view) designated cooling off period; and
- The Fund’s expenses are high and rising while its performance is below par. “All these issues are extremely worrying to its members, who have deluged us with requests for information since clearly, none has been forthcoming from the fund itself.”
The editor submits, “From the point of view of the fund, none of these stories makes happy reading, and the fund now objects largely on the basis, it seems to us, that the full details of what was going to be published were not revealed to them prior to publication. In this regard, the fund is under a misapprehension, in several crucial respects.
“To speak plainly, the fund’s interaction with us has vacillated, but generally speaking, it has been in turns offhand, dismissive, disdainful, haughty and almost always, thoroughly unprofessional by refusing to engage with us transparently. Worse, the information provided at times has been positively misleading. Getting any response out of the fund to any query has been unremittingly exhausting, and it has operated, it seems to us, on the principle that if they (the fund) don’t say anything, we will not be able to publish anything. That is not true now, and will not be so in the future.”
Cohen says he cannot emphasise strongly enough that the Fund is effectively and legally a public institution. The sole shareholder of the institution which is the source of all its funds is the government. “Far from us being at fault, the EPPF is at fault for treating with casual disdain the requirement on public institutions to be transparent and honest with the public, and more importantly, in this case, its own members. We formally request the dismissal of this application.”
- First complaint
1.1 The story: Eskom is facing another demon in the dark — its R140bn pension fund (9 January 2020)
1.1.1 The story was about the lack of maintenance, dated infrastructure, gross mismanagement and a potential collusion regarding a tender process for an upcoming system migration at the Eskom Pension and Provident Fund (the Fund). “The documents expose risks to an asset base in excess of R140-billion, 43,571 active pension fund members, 33,317 retirees; 2,376 deferred beneficiaries, and here is the clincher: by default Eskom itself, and by extension government and the taxpayer, could be on the hook,” Jooste wrote.
1.1.2 The journalist concluded her article by stating:
- “The EPPF did not respond to Business Maverick on the state of the tender process, or to confirm the preferred vendor, but in various conversations with stakeholders and insiders, the consensus is clear: in the absence of a clearly articulated plan, which is highly unlikely given the time constraints, EPPF will not be able to deliver on the planned systems migration”;
- “If that tender process is not completed, it will put the EPPF at significant risk given the very real prospects of implementation failure. And to make it worse, there are risk mitigation problems because there is no effective rollback solution, which would allow the fund to correct errors”; and
- “So stakeholders are yet again being left in the dark by Eskom.”
1.2 The complaint
1.2.1 The Fund complains that the following sentence in the story was inaccurate and unfair: “The EPPF did not respond to Business Maverick on the state of the tender process, or to confirm the preferred vendor…”
1.2.2 Mr Itayi Gwaunza says Jooste sent communications manager Keitumetse Magopa an email on 7 January stating: “?I’d like to chat with you regarding the above-mentioned matter (Email Subject: Tender for the administration system for EPPF). I don’t see anything on your website in this regard. Could you please give me a ring as soon as possible to discuss. I’m writing something on the fund administration for the Daily Maverick as we speak. I look forward to hearing from you.”
1.2.3 He says Magopa then requested Jooste to provide her with her cell number – which the journalist did, on the same day.
1.2.4 Later that day, he continues, the correspondence between Magopa and Jooste went as follows:
- Magopa to Jooste: “Could you kindly send us any particular questions to the above-mentioned matter”;
- Jooste to Magopa: “As stated below, I want to know why there is nothing on your website regarding the tender for a new admin system to go live at the end of April”; and
- Magopa to Jooste (the next day): “Our request for questions was because you had said you wanted to look something up on our website and, as per our normal procedure, the tender request for proposals was advertised on the website and once the closing date passed, the RFP advertisement was removed from the website. We thought perhaps we could assist with the questions you wanted [answered] via our website. Please let us know if there is anything further we can assist with.”
1.2.5 The Fund complains it was inaccurate and unfair to state that it did not respond to Business Maverick (BM) on the state of the tender process, or confirmed the preferred vendor – it says it was never asked to respond to those issues (as it should have been, as the subject of critical reportage) in the first place.
1.2.6 Gwaunza says soon after publication, the Fund sent a letter to BM, pointing out the above. This letter was published on January 12. However, no correction, retraction, explanation or apology accompanied that text.
1.3 Daily Maverick’s response
1.3.1 Referring to her email of January 7, associate editor Ruan Jooste says the board of trustees and the executive teams at both the EPPF and Eskom were aware of the content of the article prior to publication. Still, she sent an email to Magopa?,? who replied on the same day by asking for her contact details. (She says she cannot recall a phone call from her or anyone else at the Fund at the time.)
1.3.2 She says that, on deadline, Magopa requested particular questions from her via another email. However, she says, by this time sources inside the organisation had already confirmed all the facts in question.
1.3.3 The associate editor adds that the Fund’s website’s “tender” section revealed limited information on its tenders – the only information available on the tender process from the Fund at the time. “This section has not been further populated since then, or reasons are given on why it is incomplete,” she says.
1.3.4 She also says that:
- a letter of reply to this article was published in full and verbatim on the DM website shortly after its publication;
- former CEO Nopasika Lila did not respond to BM’s text messages on the matters discussed in the article (which she was in charge of at the time of her tenure); and
- current CEO Linda Mateza only took over the position in September 2019 and has limited knowledge of many of the details, as confirmed in a meeting on 19 February.
1.3.5 In general, Cohen submits that the information BM has received emanated not only from the Fund (“not surprisingly, since the fund refuses to engage with us in any meaningful way”), but rather from former employees, fund members and experts in the industry.
1.3.6 He argues, “The fund appears to operate under the supposition that we have transgressed because we have not always confronted them with all the allegations prior to publication. But this is not, in terms of the press code, what we are required to do; we are required to tell the truth, as best we can. And in doing so, we have relied on what seems to us to be the truthful rendition of the facts by a whole host of interested parties.”
1.3.7 Cohen also refers to section 1.8 of the Press Code that requires the media to seek, “if practicable”, the views of the subject of critical reportage in advance of publication. He argues: “If the organisation, as a matter of principle, refuses to communicate with us or does so on an arm’s length basis, we would argue, seeking their views is not always ‘practicable’, and that mitigates the operation of the section.”
1.3.8 He adds that as a responsible publisher, BM is acutely aware of its duty to hear both sides. “So, as the story sequence unfolded (and despite being unable to get any sensible response from the fund previously) when they did finally respond in a meaningful way we published their response verbatim and in full…”
1.4 The Fund’s response to DM’s reply
1.4.1 Ms Karien Norval maintains that DM should have confronted the Fund with the material allegations against the organisation – a publication cannot confront a subject with allegation X, and then publish allegation Y. “That is plainly absurd.”
1.4.2 She cites a recent ruling by the Press Ombud (Brig Tiyani Hlungwani vs. News24) as follows: “Although it is understandable that the writer may have expected Brig Hlungwani not to comment after her extensive efforts for her first story, it is still necessary to approach him again with this new point which was not raised in the previous story.” (Underlining added by Norval.)
1.4.3 Norval concludes that Jooste’s neglect to put the relevant allegations to the Fund was not merely negligent, but in fact “deliberate and dishonest”. She submits: “Her pattern of behavior (sic) across the six articles was to seek the Fund’s view on uncontroversial points or on issues unrelated to the main allegations she would level against the Fund in the forthcoming article. In other words, she ticked the box of contacting the Fund prior to publication, but in fact never sought its views on the relevant allegations.”
1.4.4 She adds:
- Jooste admitted she had based her story on leaked documents and emails – but still she did not disclose that information to the Fund. She says the only particular question posed by Jooste was about the lack of information on its website;
Magopa requested detailed questions from Jooste approximately 20 minutes after the initial email, which means it is not true that the former:
- “only” requested her cell phone number on the day of the initial enquiry; and
- responded on deadline;
- The publication of the Fund’s letter did not absolve BM from complying with Section 1.8 of the Code;
- While the Fund’s letter of reply included a link to the original article, the latter was not amended with a link to the letter of reply – which renders the fact of the publication of that letter irrelevant; and
- information garnered from “other sources” did not relieve BM of its obligation to contact the subject of critical reportage itself.
1.4.5 To underline the seriousness of the allegations, Norval cites the following sections of the article that went “far beyond” the journalist’s enquiry:
- The “same shenanigans” which led to the rolling Eskom blackouts, including “lack of maintenance”, “dated infrastructure”, “misappropriation and mismanagement” that were at play at the Fund;
- Documents leaked to BM “allude to potential collusion regarding a tender process”;
- The Fund’s “administration capability and processes” were “currently held together with sticky tape and chewing gum”;
- A “critical threat of severe penalties” for data held which did not conform to the Protection of Personal Information Act’s (Popi) guidelines, which include the “quality and security of data”, with the comment that there was no reference to compliance with Popi in the Fund’s official documents – a query which could easily have been answered by a specific question to the Fund, which Jooste elected not to pose; and
- The Fund “did not respond to Business Maverick on the state of the tender process, or to confirm the preferred vendor” – but no such questions were posed to the Fund, despite its request to that effect.
1.5.1 The fact that DM has published some extremely serious allegations against the Fund (cited above) without giving it a right of reply to those allegations, cannot be in dispute. The question is whether the publication’s arguments why it did not do so, hold water.
1.5.2 I cannot find a single argument that justifies Jooste’s neglect to give the Fund a right of reply, and also not her neglect to ask the Fund relevant questions about specific allegations.
1.5.3 Here are some of my considerations:
- The argument that the board of trustees and the executive team at the Fund were aware of the content of the article prior to publication is besides the point – how was the Fund to know that Jooste was going to publish those allegations? Surely, the reporter could not have expected the Fund to respond to questions not put to it?;
- The argument that, by the time Magopa requested her to send particular questions, Jooste’s sources within the organisation already had confirmed all the facts in question is weak and irrelevant. In fact, if sources indeed had “confirmed” her information, it all the more obliged her to give the Fund a right of reply;
The publication of the Fund’s letter subsequent to the publication of the article might have absolved this issue. However, it did not because:
- it did not contain any explanation, correction, retraction or apology; and
- BM did not link that response to the article in dispute.
- The argument that it was not “practicable” to obtain the Fund’s views also does not hold water – the Fund clearly did not refuse to communicate with BM, and neither did it keep the publication at arm’s length. On the contrary, it requested specific questions.
- Even if the EPPF was at fault for treating “with casual disdain” the requirement on public institutions to be transparent and honest with the public, and more importantly, in this case, its own members, as argued by the editor, this did not relieve BM of its obligation to give the Fund a right of reply to extremely serious allegations.
1.5.4 Cohen’s argument that BM was, in terms of the Press Code, not required to confront the Fund with all the allegations prior to publication is particularly puzzling and worrisome. In a recent finding of mine (S’bu Luthuli vs. Daily Maverick, 2 July 2020), I wrote in sub-section 3.10.14, “… the real question is if BM should have tried again to contact Luthuli. No doubt it should have. The fact that Luthuli ignored its first request did not relieve BM from its duty to try to get comment. He was the subject of some serious critical reporting, and the publication had no excuse not to try again.”
1.5.5 BM has accepted this decision and has accordingly apologised for it. The same should apply in this case.
1.5.6 Please note that this conclusion does not express any opinion on the merits of the article – this is purely about the reporter having neglected to ask the concerned subject of critical reportage (the Fund) for comment on serious allegations levelled at it.
End of first complaint
- Second complaint
2.1 The story: How the Eskom Pension and Provident Fund is being milked (27 January 2020)
2.1.1 The story was about Ms Thelma Melk, Head of Legal and Corporate Secretariat at the Fund. Formerly, she allegedly received a R3.2-million pay-out from the SABC “just to go away”. Citing a letter sent to the board of trustees in 2018 by concerned internal parties, Jooste wrote that the Fund did not follow due process when appointing her. The journalist reported she allegedly got the job because of “her close relationship with the chair of the board” (Ms Mantuka Maisela).
2.1.2 Jooste continued: “But it is not just the dubious company she keeps, her chequered past, or her international adventures which are raising eyebrows. Other leaked documents indicate the appointment of vendors to the EPPF, without following official policy and procedure… Insiders further alleged that there was a direct relationship between Melk and the vendor (Providence Software Solution).”
2.1.3 The list of “curious transgressions” was “long and wide”, the article stated.
2.1.4 Jooste added, “The R1-million question that remains is why the EPPF board paid no mind to the revelations made to them on all the Melk matters and subsequently made no effort to rectify the breaches in protocol.”
2.1.5 She also reported that BM was “yet to receive” a response from Melk, or from the head of communications, Ms Thato Motlhabi.
2.2 The complaint
2.2.1 The Fund complains that the:
- following sentence in the story was inaccurate and unfair: “Business Maverick is yet to receive a response from Melk, or … [from] Ms Mothlabi…”;
- BM did not publish its responses to the reporter’s subsequent attempt to give it a right of reply; and
- BM did not elicit a response to the allegation that its chairperson, Maisela, had been implicated.
2.2.2 Gwaunza says that, on January 26, Jooste sent Mothlabi the following WhatsApp message: “Hi Thato, Ruan Jooste from Business Maverick here. I’ve just spoken to Brian Molefe. I’m trying to confirm his statement on your recent court filing. And confirm some other facts before I publish the facts of the case. I’ve sent you an email in this regard. I also want to speak to Thelma Melk today if possible.”
2.2.3 She says Mothlabi responded: “Good day Ruan. This message is to acknowledge receipt of your above messages. I have not had access to my email but will reply to your emailed query as soon as I do. Thank you.”
2.2.4 Gwaunza says Mothlabi then followed it up with another message, informing the journalist that she had replied “with the Fund’s official position” – which was all about Molefe, who had to pay back the funds he had received “under his purported retirement”.
2.2.5 Gwaunza says at the time of publication, Jooste had only enquired about the case involving Molefe, and informed Mothlabi that she wanted to speak with Melk. The journalist did not disclose why she wanted to do so, or what her enquiry was about.
2.2.6 The Fund then responded to the reporter’s questions about Molefe.
2.2.7 However, she says Jooste did not put any questions to the Fund concerning Melk.
2.2.8 Therefore, the Fund submits, the statement in question created the false impression that the MB had approached Melk and Mothlabi for comment.
2.3 Daily Maverick’s response
2.3.1 Jooste says initially the article included the fact that Molefe had not yet paid back the pension money he owed the Fund in accordance with a High Court order – hence her reference to him in her queries to the EPPF at the time. She says the comments provided by the Fund were included in a subsequent article, headlined: ?Even after a Constitutional Court finding, Brian Molefe has yet to pay back his Eskom pension (which does not form part of this complaint).
2.3.2 The journalist submits that:
- she asked the communications team at the Fund to put her in contact with Melk, a request they did not adhere to;
- she contacted Melk, who did not respond to her text messages; and
- according to her sources, documentation and reports leaked to DM were also sent to the board of trustees and the executives of the Fund – which means they were aware of the content of these reports.
2.3.3 She adds it has come to the attention of BM that Melk was appointed to the position in contravention of Fund rules, which stated that nobody with a blacklisted ICT score may be employed. She says the BM is still waiting for a response from the Fund in this regard.
- The Fund’s response to DM’s reply
2.4.1 Norval says Jooste did ask Molefe for comment, but he was the subject of a follow-up article – she never asked Melk (the subject of the story in question) for her views.
2.4.2 She says Jooste did not put the following allegations in her story to the affected parties:
- According to a letter sent to the board of trustees, Melk’s appointment “did not follow due process”;
- The letter suggested that her appointment had been “due to her close relationship with the chair of the board”; and
- Melk appointed various service providers in breach of the Fund’s procurement policies, and the Fund had paid for various expenses incurred by her which were not related to her employment and, in response, the Fund “paid no mind” to these transgressions and “made no effort to rectify the breaches in protocol”.
2.4.3 Norval argues that these statements made both the Fund and Melk subjects of critical reportage, and therefore BM should have given them a right of reply. (She notes Melk denies that Jooste has ever attempted to contact her about any of the articles complained about.)
2.5.1 The fact that Jooste contacted Molefe for comment, is commendable – but it is not relevant to this complaint. She should have contacted the Fund, as well as Melk, as both were subjects of critical reportage.
2.5.2 I take into account that Jooste did ask the communications team at the Fund to put her in contact with Melk. If the team did not respond to this request, this was rather unfortunate.
2.5.3 However, even if the Fund did not respond to that request, it did not relieve the journalist of the obligation to get comment from Melk.
2.5.4 I have no other evidence at my disposal which points to Jooste having tried to contact Melk, or the Fund, regarding this specific matter. In her correspondence with Mothlabi, the journalist did not mention those parties at all.
2.5.5 My conclusions, based on the above, are:
- Although Jooste did try to get hold of Melk, I have no evidence that she sought comment from her, or from the Fund, for that matter, with regard to specific (serious) allegations involving both; and
- the statement in the article that BM was “yet to receive” a response was misleading.
2.5.6 The BM does not give me any reason to dismiss the other parts of the complaint, namely that it did not publish the Fund’s responses to the reporter’s subsequent attempt to give it a right of reply, and that BM did not attempt to elicit a response to the allegation about Maisela.
2.5.7 Please note that this conclusion does not express any opinion on the merits of the article – this is purely about her having neglected to ask the concerned subjects of critical reportage (Melk and the Fund) for their comment on some serious allegations levelled against them.
End of second complaint
3. Third complaint
3.1 The story: Brian Molefe’s Eskom Retirement Fund saga is just the Tip of an Iceberg (6 February 2020)
3.1.1 The story said it was not only Mr Brian Molefe who “unlawfully participated in and profited from” EPPF membership. According to insiders, Jooste wrote, “fixed-term contract workers have unlawfully been gaining access to the permanent workforce’s pension plans for years and the profits meant for the employees is being siphoned off by highly paid contract employees. Pensioners are also paying the high price of the cover-up and clean-up costs.”
3.1.2 Jooste wrote that, according to whistle-blower accounts and leaked documents, those violating the pension fund protocols included former CEO Nopashika Lila, former fund chairperson S’bu Luthuli, and current chief investment officer Ndabe Mkhize.
3.1.3 The article cited the Fund’s 2019 integrated report to justify the statement that it had “implicitly conceded” that there had been a problem.
3.1.4 The story also said that Mr Joey Sankar, head of operations, had been “well aware of the transgressions”.
3.2 The complaint
3.2.1 The Fund complains that Jooste:
- published this article before it could respond to follow-up questions put to it by the reporter (in other words, she did not afford the Fund reasonable time to respond); and
- made statements in the story that she did not ask the Fund to respond to.
3.2.2 Gwaunza explains: On Monday, February 3, Jooste sent an email to Mothlabi, to which the Fund responded the next day. On that same day (February 4), the reporter sent some new questions. The Fund replied the following day (Wednesday) that it would reply to those follow-up questions the day after (Thursday) at 17:00. However, the article was published on the Thursday, before Jooste received the second response, and before 17:00.
3.2.3 Secondly, she says the Fund was not requested to respond to the following statements in the article:
- About what the Fund allegedly informed its members in a memorandum;
- The alleged knowledge, or the lack thereof, attributed to Sankar and the board;
- The allegation that staff were specifically told not to disclose any information to the FSCA during their site visit in 2018;
- The circumstances surrounding Lila’s departure from the Fund; and
- The allegation that the Fund’s membership database suppressed the identities of 138 beneficiaries.
3.3 Daily Maverick’s response
3.3.1 Jooste says that, on 3 February, BM sent an email to the Fund’s communications team, members of the executive and all the trustees of the board:
- stating they were aware of a handful of illegal members of the fund (other than Molefe), including former CEO and principal officers Nopasika Lila and S’bu Luthuli;
- asking why this has not been made public or communicated to their members;
- asking for confirmation of the list of names, some of which the BM was already aware of; and
- requesting details, amongst other things, on executive remuneration, legal representation, operational costs and an explanation of why the financial statements for 2019 were not yet available on the website. (She says the latter was later published after much pressure from members and the media.)
3.3.2 The associate editor says the communications team acknowledged receipt of the email shortly after - “which they did, [but] without providing all the information I required”.
3.3.3 She says she then replied by stating that fact and by providing more pointed questions, which they said they would reply to by close of business on February 7. She says that Ms Keitumetse Magopa recalled that particular email – and the questions were never fully answered. However, “no further communication on those issues has been provided,” she says.
3.3.4 Jooste submits that the article was based on leaked documents, insider recollections as well as information in the public domain. She says facts were also confirmed by the FSC and details made by public by the Fund in its Integrated Report for 2019 on its website.
3.3.5 “Furthermore, in a recent FSCA document, the EPPF actually acknowledged that it contravened the Pension Funds Act in this regard, and did not act with due care and diligence in the matter of allowing illegal members to join the fund. The FSCA has also reprimanded the fund in certain ways and corrective measures have been enforced and are in progress,” she says.
3.3.6 Jooste concludes that, in a meeting with the current CEO and PO, Linda Mateza, the latter told BM that only 15 people have been identified to be illegal members of the Fund in an ongoing audit – a statement that “has been proved untrue by the BM since then”.
- The Fund’s response to DM’s reply
3.4.1 Norval says the Fund informed Jooste at 09:38 on February 6 that it would respond to her follow-up questions by 17:00 the next day – therefore, she argues, the BM’s statement that Magopa had recalled her email message is “simply not true”. Norval maintains that Jooste did not give the Fund reasonable time to respond.
3.4.2 She submits that this, as well as Jooste’s neglect to give the Fund a right of reply to the matters stated above (under sub-section 3.5.5), have tarnished its dignity and reputation.
3.5.1 In her first email, Jooste asked Mothlabi why the fund did not disclose to its members:
- the names of the executives who were on the list (mentioning Lila and Luthuli in this regard);
- information about Lila’s “golden handshake retirement award”; and
- information about remuneration and other benefits for executive members who were paid by the Fund.
3.5.2 She also stated that:
- the Fund was legally obliged to disclose such payments;
- its financial statements of 2019 were still outstanding; and
- legal costs were spiralling out of control
3.5.3 In addition, the reporter wanted to know:
- who the legal firm was that was leading the employment contract audit; and
- why the Fund did not conclude the tender for legal representatives after advertising it twice, accepting applications, but never providing feedback on that matter.
3.5.4 Having read through the article, I am satisfied that Jooste adequately reported Mothlabi’s responses to these questions.
3.5.5 Then, Jooste followed this up with the following questions:
- Why did the Fund not make available to its members the latest financial statements? (She asked for a copy of those financials);
- Were the former chairperson and CEO appointed on fixed-term contracts and for which periods?
- Were the current senior management’s contracts fixed-term or permanent?
- What was the Fund’s policy on executive remuneration and the incentive scheme?
- When would the preferred vendors for legal tender and administration system be officially announced?; and
- When could members expect some feedback on the audit of member records?
3.5.6 Jooste published the article in dispute before the Fund responded to the above. The question is how justified such publication was, given that the Fund promised a response on the same day as publication. Note that the BM did not put any evidence on the table to prove that Magopa had “recalled” the email in which a response on Thursday by 17:00 had been promised.
3.5.7 The answer lies in the article itself – if the issues addressed in the questions were reported on, surely Jooste should have waited for the response; if not, there can be no problem.
3.5.8 A study of the article reveals a mixed bag:
- The first question: The story said, “The financial statements for the financial year to June 2019 are not yet available on the EPPF website, despite the fund stating that it ‘has disclosed all information which it is required to disclose’.” She also wrote, “Then why are none of these lump-sum payments evident in available financial reports or communicated to members?” In this case, a response from the Fund could have made a difference to Jooste’s reporting; and
- The second and sixth question: Jooste reported that, according to whistle-blower accounts and leaked documents the former CEO (Lila) and chairperson (Luthuli) had “violated the pension fund protocols” because they were appointed on “fixed term contract status and that they were not meant to have contributed to the fund”. Jooste did not state this information as fact, but attributed it to sources, yes – but without waiting for the Fund for comment.
3.5.9 These were material matters, about which the Fund should have been given a reasonable time to respond to. Having known that the Fund’s response was due before 17:00 on the day of publication, Jooste should have waited until that time and, if by then she did not receive the response, could have published with a note that the Fund’s response was late.
3.5.10 Jooste did not materially touch upon the other questions that she put to the Fund.
3.5.11 The only conclusion I can come to, is that Jooste:
- did not afford the Fund reasonable time to respond; and
- made statements in the story that she did not ask the Fund to respond to.
3.5.12 Please note that this conclusion does not express any opinion on the merits of the article – this is purely about her having neglected to ask the concerned subjects of critical reportage for their comment.
End of third complaint
4. Fourth complaint
4.1 The story: Eskom’s Pension and Provident Fund vendors claim all tenders are on hold; the CEO says it is ‘business as usual’ (17 February 2020)
4.1.1 The story said that all tenders at the Fund were on hold until further notice due to “recent media reports”. These included reports on poor data quality and governance, theft, the revelation of suppressed member data, hints that some participated in the Fund who were not entitled to do so and embarked on a poorly timed systems replacement project.
4.1.2 Jooste reported concerns that the new administrator, EBSphere, would not be able to fulfil its basic functions (the details of which are not relevant to this adjudication).
4.2 The complaint
4.2.1 The Fund complains that, while Jooste did ask it about some matters, the reporter neglected to put all the reported allegations to it.
4.2.2 Gwaunza says Jooste asked the Fund’s CEO, Ms Linda Mateza:
- whether everything was on track regarding the pension fund administration system “because of a rumour that the Fund was behind schedule”; and
- why the Fund had not published the name of the new service provider for the pension fund’s administration system.
4.2.3 She says Mateza confirmed that everything was on track, adding that the Fund was not obliged to publish the names of its service provider for its administration. She also offered to meet with Jooste to discuss the rumours and to inform her of the “correct state of affairs” at the Fund – which did not happen prior to publication.
4.2.4 Gwaunza refers to some allegations that Jooste “did not enquire about”.
4.3 Daily Maverick’s response
4.3.1 Jooste says on Sunday 9 February Mateza contacted her via SMS to arrange for a meeting.
4.3.2 The journalist says Mateza:
- and she had subsequent conversations over the following days on both WhatsApp and cellphone;
- did not address any of the matters already written on, or reveal any additional or helpful information on any outstanding queries during this time;
- and she eventually met on February 19 at the Fund’s offices in Bryanston for a four-hour conversation, where Mateza discussed with her a document on fund performance, financial management and a small portion on the IT modernisation project;
- ?was unwilling and/or unable to answer all her queries on the tender process, legal proceedings, the missing annual financial statements and other concerns raised by members and other related parties to the BM at the meeting, especially relating to the audit of illegal memberships and ongoing litigation with its former CIO;
- told her that the legal proceedings had been finalised – while the BM has determined that that was not the case;
- provided misinformation on the number of the illegal members; and
- was more focussed on getting her (Jooste) to reveal her sources than answering her questions.
4.3.3 She adds it was later confirmed that the facts and the figures revealed in the presentation were not accurate or 100% true and also not prepared by her (but by the COO Joey Sankar, who was not present at the meeting).
4.3.4 The associate editor concludes that Mateza’s:
- responses on many of the matters have been included in various articles on the Fund where suited to the topic under discussion; and
- denial of the tender processes being put on hold mentioned in this article was fully documented.
- The Fund’s response to DM’s reply
4.4.1 Norval says Jooste’s primary defence against this complaint is to disparage Mateza’s responses to her questions, and argues that the latter’s responses are irrelevant. “The salient issue is whether Ms Jooste sought the Fund’s view on the critical reportage contained in [this article],” she argues.
4.4.2 She notes Jooste made extensive reference to the Fund’s letters of reply to the BM – but disregarded the fact that those issues were different to the ones she reported on in this article.
4.4.3 She concludes that this reportage has tarnished the Fund’s dignity and reputation.
4.5.1 The complaint is that Jooste neglected to give the Fund a right of reply to “some of the allegations” she reported on.
4.5.2 It is, with respect, problematic that Gwaunza:
22.214.171.124 does not specify which allegations were involved – he merely refers to “most of the allegations”;
126.96.36.199 does not provide me with any documentation to justify his argument; and
188.8.131.52 refers in this regard to two statements that Jooste in fact did report on, based on comment by Mateza.
4.5.3 Jooste’s reference to a four-hour long meeting with Mateza is also not helpful, as that meeting took place after this article was published.
4.5.4 This leaves me with no evidence of any kind to base a reasonable ruling on. This will be reflected in my finding below.
End of fourth complaint
5. Fifth complaint
5.1 The story: Court documents suggest the Eskom Pension and Provident Fund is in crisis (25 February 2020)
5.1.1 The article was mainly about the court case between the Fund and ASP Global, its software provider at the time. This reportedly came after the Fund decided in 2019 to appoint a new administrator, allowing Global ASP’s contract to lapse by the end of April 2020. EBSphere was reportedly appointed in its place.
5.1.2 Jooste wrote that relationships between the Fund and Global ASP became strained, while from court papers it was clear that EBSphere had been struggling to get its system up and running. The Fund reportedly then approached Global with a view to extending their contract for a year, “at which point Global laid down a set of conditions for any temporary resumption of the contract” – a matter that the Fund was contesting.
5.1.3 She continued, “Whatever the outcome [of the court case], the dispute suggests the existing executive of the fund has falsely claimed in the past that the migration is on track and the handover will still happen on the due date – the end of April 2020”.
5.1.4 The journalist also wrote that the Fund had misled the public as well as its members in stating that a contract between itself and EBSphere existed, while that was not true.
5.2 The complaint
The Fund complains:
- the allegations that it had made false claims in connection with a contract with EBSphere and that it had misled the public and its members in its response to BM’s article of January 9, were incorrect; and
- that BM did not give it a right of reply to those allegations – despite a meeting between CEO Linda Mateza and Jooste prior to publication.
5.3 Daily Maverick’s response
5.3.1 Jooste says this article was based on information contained in court papers (available to the public) including, but not limited to, a signed affidavit submitted by Mateza, minutes of meetings between the applicant and respondent in 2019, and other related correspondence between the two parties and their attorneys over the last two years.
5.3.2 She says it was later found that Mateza had lied under oath in her affidavit, pertaining to the fact that a contract had already been in place with the new vendor for the administration system – which the Fund’s legal representative Cliffe Dekker Hofmeyr admitted in a letter submitted to the court. (She adds that the Fund’s court application has been subsequently withdrawn).
5.3.3 The associate editor says BM tried to get comment from the Fund in a follow-up article on the withdrawal (headlined, Eskom Pension and Provident Fund members’ payouts are at risk – which does not form part of this complaint). However, the Fund declined to comment on any “ongoing litigation”, despite the fact that the BM was already aware of the fact that the court application was in the process of being removed from the court roll.
- The Fund’s response to DM’s reply
5.4.1 The Fund denies that Mateza has perjured herself or misled the public, or that a contract had already been in place with the new vendor. She says the vendor was appointed, but stresses that a contract was not concluded.
5.4.2 Norval says Jooste accused Mateza of committing a crime, without giving her a right of reply.
5.4.3 Norval provides this office with the “true facts” regarding this matter.
5.4.4 She says not only did Jooste not seek comment from the Fund, she also presented the allegation about false claims and misleading the public as fact, tarnishing its dignity and reputation in the process.
5.5.1 When the media report on court proceedings, they should not ask the parties for comment – and if they do, the parties are not obliged to respond. The main reason for this is the possibility that such activities may prejudice court cases. Besides, the courts give all parties ample opportunity to state their case.
5.5.2 In this case, though, Jooste did not stick to the court case, as she came to her own conclusion – first, she reported court papers “suggest” that the Fund’s CEO had falsely claimed that the migration was on track and that the handover would happen on the due date (end of April 2020); then, this “suggestion” becomes a statement of fact when she declares, “That means that the fund misled the public and its members…”
5.5.3 This was Jooste’s conclusion, rightly or wrongly, and not that of the court. (I have no evidence that the court has made such a decision.)
5.5.4 If anything, this means that the journalist was obliged to put this matter to the Fund for comment. I have no such proof, written or otherwise.
5.5.5. As I do not have any records of what was said at the four-hour long meeting, or what was not said, I am not in a position to make any kind of a definite decision on the issue whether Jooste gave Mateza a right of reply on any matter – I simply have nothing to base such a finding on, whether that be upholding, or dismissing this part of the complaint.
5.5.6 This leaves me with only three options:
- Either Jooste neglected to do so (I would not know, as I do not have any knowledge of what transpired at the four-hour long meeting) – which would have been in breach of the Press Code; or
- She tried to, but failed to elicit comment – in which case she should have stated this in the article (which she did not do); or
- She did get such comment, but failed to report it – which would have been unfair.
5.5.7 It falls outside my mandate to decide whether the claim about a contract between the Fund and EBSphere was false, or that the Fund has misled the public and its members – that is not for me to decide.
5.5.8 Please note that this conclusion does not express any opinion on the merits of the article – this is purely about Jooste either having neglected to ask the Fund for its comment, or failing to state that she could not get such comment, or failing to report comment that she did obtain.
End of fifth complaint
6. Sixth complaint
6.1 The story: South Africa: Untangling a Conflict of Interests At the Eskom Pension and Provident Fund (1 March 2020)
Jooste reported that rumours have been flying for years that CEO and Principal Officer of the Fund, Mr S’bu Luthuli, had been doing business with the investment arm of the Fund, despite it being a “clear” conflict of interest and in contravention of the cooling-off period stipulated in the Fund’s code of conduct – stating that this was “no longer a rumour”.
- The complaint
6.2.1 The Fund complains that Jooste did not give it a right of reply to damning allegations regarding:
- Mpande, Waterberg Coal Project, Regiments Property Fund and Harith Pan African Infrastructure Fund;
- an alleged conflict of interest between itself and Luthuli; and
- the insinuation that there had been complacency, incompetence or collusion at the Fund.
6.2.2 Gwaunza says Jooste called current chief investment officer Ndabe Mkhize on February 27, asking him about Trinitas Private Equity, which is when the reporter had an opportunity to put the above-mentioned allegations to him. She says Mkhize informed the journalist that Trinitas was an existing investment dating back to the mid-2000s – information she neglected to report.
6.3 Daily Maverick’s response
6.3.1 Jooste says this article was based on:
- whistle-blower accounts;
- leaked information;
- documents provided by insiders, which included internal EPPF submissions to the investment committee of the board of trustees; and
- information made available by the FSCA and other sources.
6.3.2 She says the Fund has denied the BM access to their code of conduct and conflict of interest policies.
6.3.3 The associate editor says BM also spoke with Mkhize about matters discussed in the article – which were reflected in the article. “It later came to light that he was not truthful with the facts, after denying the fund’s relationship with the former CEO,” she adds.
6.3.4 Jooste says neither Trinitas nor Luthuli initially responded to BM’s text messages or phone calls on the matter – only subsequent to publication did they confirm the relationships in various emails and letters and provided additional information, which will form part of future reports.
6.3.5 She says BM has been trying to get more specific information from the Fund in this regard, but they continue to not fully address the publication’s queries. She cites a recent response via its new PR agency: “?We would really appreciate it if you could consolidate all your questions/queries in one email in order to give you a comprehensive response. I’m sure you will agree with me this going back and forth is not productive for everyone involved in this process.”
6.3.6 The associate editor adds that BM is still waiting for clarification on certain matters.
6.4 The Fund’s response to DM’s reply
6.4.1 Norval says Jooste reported on Mpande, Waterberg Coal Project, Regiments Property Fund and Harith Pan African Infrastructure Fund without asking Mkhize about those entities. She also did not raise a matter of conflict of interest, or the insinuation that there had been complacency, incompetence or collusion at the Fund.
6.4.2 Norval says Mkhize was not the Fund’s official spokesperson and argues that Jooste should have contacted the subjects of critical reportage in this regard. (She explains that Mateza referred Jooste to Mkhize to respond to questions pertaining to the Fund’s investment strategy.)
6.4.3 She continues, “Ms Jooste did not tell Ms Mateza what she was investigating. In other words, she made contact with the CEO of the Fund, but deliberately chose to not to seek her view on the central issue of her forthcoming article, the alleged conflict of interest, well knowing that it was the subject of her forthcoming critical reportage.”
6.4.4 She cites the relevant WhatsApp message from Jooste, which read: “I want to write something on your investment strategy like we discussed and your special underwriting rule with Eskom like we talked yesterday.” From this, she deduces that Jooste was vague in her request.
6.5.1 Jooste’s argument what the article was based on is irrelevant, as that is not what the complaint is about. Neither is it relevant that the Fund was “not truthful” in its response. The real issue is quite simple: Did the BM give the Fund a right of reply to the serious allegations levelled against it?
6.5.2 The answer is as simple. It is “no” – but not so fast.
6.5.3 The first part of the complaint is that Jooste did not give the Fund a right of reply to damning allegations regarding Mpande Property Fund Manager (“Mpande”), Waterberg Coal Project, Regiments Property Fund and Harith Pan African Infrastructure Fund.
6.5.4 I must confess that this has me stumped – the story did refer to Mpande, but not to Waterberg Coal Project, Regiments Property Fund and Harith Pan African Infrastructure Fund. This is puzzling. I strongly suspect that could be the reason why the BM does not respond to this part of the complaint.
6.5.5 That leaves me with Mpande. This time, I do not believe it is reasonable to take the four-hour long meeting in mind – that took place nearly two weeks prior to the publication of this article. Having studied the article, I am convinced that the Fund does not have the standing to complain about Mpande, for the simple reason that Jooste did not link the two. Mpande’s “involvement” in the story concerned Luthuli – and that, only after the latter has left the Fund’s employ.
6.5.6 The other two parts of the complaint (the allegation of a conflict of interest between the Fund and Luthuli, and the insinuation that there had been complacency, incompetence or collusion at the Fund) do have a leg to stand on. I have no evidence, of any kind, that Jooste gave the Fund a right of reply to those allegations/insinuations.
6.5.7 Please note, yet again, that this conclusion does not express any opinion on the merits of the article – this is purely about her having neglected to ask the Fund for comment.
End of sixth complaint
7.1 First complaint
BM should have, but did not, give the Fund an opportunity to respond to specific allegations which were of a serious nature. This was in breach of the following sections of the Press Code:
- 1.1: “The media shall take care to report news … fairly”; and
- 1.8: “The media shall seek, if practicable, the views of the subject of critical reportage in advance of publication…”
7.2 Second complaint
7.2.1 Even though Jooste did try to give Melk a right of reply, in the end she did not give her, or the Fund, an opportunity to respond to specific allegations which were of a serious nature. This was in breach of the following sections of the Press Code:
- 1.1: “The media shall take care to report news … fairly”; and
- 1.8: “The media shall seek, if practicable, the views of the subject of critical reportage in advance of publication…
7.2.2 In addition:
- The statement that the BM was “yet to receive” a response from the Fund was in breach of Section 1.2 of the Code that says: “The media shall present news in context and in a balanced manner, without any intentional or negligent departure from the facts whether by … misrepresentation…”;
- The BM did not publish its responses to the reporter’s subsequent attempt to give it a right of reply. This was in breach of Section1.9 of the Press Code which states that, where a report is based on limited information, it should be supplemented “once new information becomes available”; and
- The BM did not elicit a response to the allegation about Maisela. This was in breach of Section 1.8 of the Press Code (as quoted under sub-section 7.1).
7.3 Third complaint
7.3.1 The BM reported on several material issues without giving the Fund a right of reply to them (see sub-section 3.5.5). This was in breach of Section 1.8 of the Press Code that says, “The media shall seek, if practicable, the views of the subject of critical reportage in advance of publication….”
7.3.2 The BM was expecting a response by the Fund at 17:00 on the day of publication, yet it decided to publish a few hours before that time – some of which were material to what Jooste published. This was in breach of Section 1.8 of the Press Code that says, “… a subject [of critical reportage] should be afforded reasonable time to respond; if unable to obtain comment, this shall be stated.”
7.4 Fourth complaint
Due to lack of evidence, I cannot come to any finding on this matter.
7.5 Fifth complaint
7.5.1 I cannot come to a definite finding, but it has to be one of three options – all of which would be in breach of the Press Code.
7.5.2 There are three alternatives:
- If Jooste neglected to obtain comment from the Fund, this would be in breach of Section 1.8 of the Press Code that says, “The media shall seek, if practicable, the views of the subject of critical reportage in advance of publication…”; or
- If she tried to, but was not able to elicit comment, this would be in breach of Section 1.8 that says, “… if unable to obtain comment, this shall be stated”; or
- If indeed she got such comment, but failed to report it, it would be in breach of Section 1.2 of the Code that says, “The media shall take care to report news … fairly”.
7.5.3 It is up to Jooste to decide which shoe fits. One of these has to fit.
7.5.4 There is no finding on the veracity of the statements in dispute, as those are for a court to decide on.
7.6 Sixth complaint
7.6.1 The BM did not obtain comment from the Fund regarding an alleged conflict of interest between itself and Luthuli, and also not about the insinuation that there had been complacency, incompetence or collusion at the agency. This was in breach of Section 1.8 of the Press Code that reads, “The media shall seek, if practicable, the views of the subject of critical reportage in advance of publication…”
7.6.2 The complaint regarding “allegations” levelled against Mpande, Waterberg Coal Project, Regiments Property Fund and Harith Pan African Infrastructure Fund is dismissed.
8. Seriousness of breaches
8.1 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).
8.2 The breaches of Section 1.8 of the Press Code as indicated above are all Tier 2 offences.
9. General comments
9.1 Evidently, the BM is convinced that the Fund’s management is questionable, to put it mildly. In that, it may be quite correct – or, maybe not. It is important to state, as I have repeatedly done above, that this adjudication is not about the merits of the allegations levelled against the Fund. The office of the Press Ombud is not a court of law. This should be understood, clearly, by all and sundry.
9.2 Given the seriousness of the matter, as sketched at the outset by Cohen, this office should do nothing to dampen BM’s attempts at getting to the truth and reporting it without fear or prejudice. On the whole, the publication should be commended for pursuing the matter – it certainly is in the public interest.
9.3 I shall forfeit my duty, however, if I do not caution that this conviction does not give the publication a free pass, a right to ignore the Code in pursuit of its mission to fulfil its role as the Fourth Estate. If the Fund is at fault, the only way to hold it accountable is to do it the right (read: ethical) way. The BM is not 007 – it does not have a licence to kill. The BM is on thin ice here – dangerously close to becoming a repeat offender.
9.4 In this regard, I am particularly concerned about the consistent neglect either to obtain comment from a subject of critical reportage, or the neglect to ask relevant questions about specific allegations. Surely, this is Journalism 101? Such journalism has the potential of leading not only to inaccurate and unfair reporting, but also to cases of defamation – and it has the potential of causing huge, unnecessary harm.
9.5 I am not willing to speculate about the reason why Jooste made the same mistake over and over again – like the Fund, who says this was “deliberate”. I leave this matter up to the editor to deal with.
9.6 I have not found that the reportage has unnecessarily tarnished the Fund’s reputation and dignity. The reason for this is that I needed to be reasonably sure that the allegations levelled against the organisation and its management were false. I have said at the beginning that this complaint, and its adjudication, is not about the merits of those allegations.
9.7 For that very reason, I have “limited” Section 1.1 of the Press Code to the mentioning of the word “unfair”.
11.1 Business Maverick is directed to:
- unreservedly apologise to the Fund and to all those individuals who were affected by the reportage for repeatedly and unfairly neglecting to give them a right of reply to serious allegations levelled against them;
- list the allegations about which the BM did not give them a right of reply to (in order to provide the necessary context to the apology); and
- give the Fund a right of reply, not exceeding a total of 600 words, which should be published with, or at least linked to the apology (which shall be published after consultation with the BM).
11.2 DM is directed to publish:
- the apology for at least three full days on its front page;
- a reference to this apology with the initial articles, and to create a link in all those articles to the apology (except the fourth article); and
- the apology with a headline containing the words “apology” or “apologises”, and the name of the complainant.
11.3 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 (attached); and
- be prepared by the publication and be approved by me (which I shall do after consultation with the Fund).
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.
Acting Assistant Press Ombud