Matuma Letsoalo vs. Daily Maverick


Mon, Dec 3, 2018

Ruling by the Press Ombud

30 November 2018

Particulars

Lodged by: Koma Ramontja Attorneys

Date of article: 31 October 2018

Headline: Senior M&G reporter’s Prasa contract raises ethical issues

Author of article: Steve Kretzmann

Respondent: Janet Heard, managing editor

Complaint                                            

Letsoalo complains that the following statements in the article were incorrect:

  • [Letsoalo] has been found by Werksmans to have conducted business with a state-owned enterprise in a 2010 tender deal that was found to be irregular”;
  • Evidence suggested that [Letsoalo] was not telling the truth when he claimed that he disclosed his business interests during the period of 2010 and 2012…”;
  • The joint venture entity ‘Nexus/KMM JV’ did not submit a bid and should not therefore have been considered for the tender, let alone awarded same”;
  • Independent investigation by Daily Maverick confirms that KMM was the minor party in the joint venture and thus was not in a position to bid for the tender on its own and subcontract part of the work to Nexus”; and
  • The emails from Werksmans show that when Letsoalo’s conflict of interest was ascertained, which was in July 2016, the investigators informed the editor at that time, Verashni Pillay.”

He adds that the reportage has negatively impacted his dignity, reputation, career and family.

The text

The article said that Letsoalo, an award-winning journalist at a gutsy publication with a reputation for integrity and independence (the M&G) had been found by Werksmans to have conducted business with a state-owned enterprise in a 2010 tender deal that was found to be irregular.

The journalist wrote: “The apparent bald conflict of interest between Mail & Guardian political editor Matuma Letsoalo and the Passenger Rail Agency of South Africa (Prasa) is laid bare by one of scores of forensic investigations into Prasa tenders that were commissioned by the Prasa board in the wake of the Public Protector’s ‘Derailed’ report of 2015 and findings of irregularities and maladministration by the Auditor-General.”

Letsoalo reportedly denied any wrongdoing.

However, Kretzmann continued, evidence suggested that he was not telling the whole truth when he claimed that he disclosed his business interests during the period of 2010 to 2012, and the publication’s current leadership under editor-in-chief Khadija Patel has subsequently ordered an investigation into the matter.

The arguments

Conducting business in an irregular tender deal

The story said: “[Letsoalo] has been found by Werksmans to have conducted business with a state-owned enterprise in a 2010 tender deal that was found to be irregular.”

LETSOALO complains that this statement is incorrect, as there was no finding against him as an individual. He also points out the authors of the report made it clear that:

  • it was inconclusive and required further investigation; and
  • the content should not be utilised for any other purposes.

HEARD quotes section 2 of the Werksmans report that says: “Preliminary forensic audit findings on Gemini Moon t/a Nexus Travel clearly indicate that the joint venture entity ‘Nexus/KMM JV did not submit a bid and should not therefore have been considered for the tender, let alone awarded same.”

As for the report not being utilised for any other purpose, she says, the matter was of public interest and thus overruled this directive.

Lying about disclosing business interests

The article stated: “Evidence suggested that [Letsoalo] was not telling the truth when he claimed that he disclosed his business interests during the period of 2010 and 2012…

LETSOALO says four editors, the M&G’s CEO as well as he himself told the reporter that he had disclosed his business interests.

HEARD says the responses from the four editors, the owner, and Letsoalo himself, were included in the article.

She submits it is the response from former editor Nic Dawes, who was present during the period of the KMM/Nexus contract with Prasa, which suggested that Letsoalo might not have been telling the truth about the disclosure of his business interests. She notes the journalist reported: “Throughout my time as a reporter and editor at the Mail & Guardian staff were required to make a declaration of interests, which covered external sources of income, shareholding and directorships. Matuma declared an interest in his wife’s transport company, which we understood to be a small travel business supplying mini-bus services…  was not made aware, nor to the best of my knowledge was anyone directly involved in his supervision, of contracts with Prasa or any other government entity.”

Heard adds that further evidence which suggests Letsoalo did not fully declare his business interests were that an initial investigation had to take place under editor Verashni Pillay when the Werksmans investigators contacted the Mail & Guardian. “Had Letsoalo made full disclosure, it would have been a simple matter of looking at the declaration files. Further evidence lies in the fact that current editor Khadija Patel has instigated a second investigation into the matter,” she argues.

She adds:

  • The reporter was told that Letsoalo had declared his business interests, which would presumably include the fact he was doing business with Prasa, particularly in this instance because Prasa is no ordinary client, but a State Owned Enterprise; and
  • Dawes also said he would certainly have remembered whether Letsoalo declared doing business with Prasa, “which is an indication that being aware this would be a conflict of interests for a journalist was taken for granted”.

No bid submitted

The article quoted the report as saying: “The joint venture entity ‘Nexus/KMM JV’ did not submit a bid and should not therefore have been considered for the tender, let alone awarded same.”

LETSOALO says the journalist should have investigated this matter further and / or obtained the relevant information from Prasa and Werksmans to clarify facts before publication. He adds that the Werksmans report also conceded that Nexus/KMM were never given the opportunity to present their version of events.

He adds the reporter was granted an opportunity to view the file to prove that the JV was submitted to the bid – but he failed or refused to take up the offer, and presented an inconclusive report as fact. Had the journalist requested the list of companies that submitted a tender to Prasa, he would have discovered that the claims made by the Werksmans report that the JV did not submit a bid was not entirely correct, he argues. The report did not clearly explain this matter, and it was the journalist’s duty to have verified such information, he maintains.

He also says there is no evidence in the report to show that the JV did not submit a bid – and yet, the journalist ignored information provided to him, including email exchanges between a Prasa official and Nexus travel – which was appointed by the JV as the lead partner.

HEARD replies:

  • The Werksmans report was in fact conclusive in stating the bid should never have been awarded and was thus irregular (as quoted above);
  • The article did not claim the JV did not submit a bid, but stated this was what the Werksmans report found. For example, the story quoted the report as follows: “The joint venture entity ‘Nexus/KMM JV’ did not submit a bid and should not therefore have been considered for the tender, let alone awarded same”;
  • Reasonable steps were taken for the JV to supply proof of their bid submission. Both Letsoalo as former KMM director, and Nexus financial director Kamal Dullabh were provided 48 hours to respond. Dullabh’s response was provided, as well as the list of documents he provided, which in the reporter’s view did not prove the JV submitted a bid, only that a bid was likely submitted by KMM, which was the smaller entity. This much is stated in the article;
  • The article reported that Dullabh and Letsoalo denied the bid was irregular; and
  • The article did not state emphatically that the JV did not submit a bid or that the tender itself was irregular. Ref para 24: But whether or not the deal in which KMM received 40% (R140,000 per month) was above board does not remove the fact that a journalist at the Mail & Guardian was doing business with an SoE, seemingly without declaring his interests.

KMM not in a position to bid for tender

The article said: “Independent investigation by Daily Maverick confirms that KMM was the minor party in the joint venture and thus was not in a position to bid for the tender on its own and subcontract part of the work to Nexus.”

LETSOALO says that, had the reporter obtained the appointment letter, he would have come to a different conclusion.

He adds the journalist concluded that the tender was irregular, mainly based on findings that only KMM was listed on the Prasa attendance register for the compulsory bid briefing on 9 March 2010 and the tender document of 1 April 2010. However, he asserts, there was no provision to substantiate the rule that both JV partners needed to attend the compulsory tender briefing. This gave the false impression that JV had not adhered to the rules by sending only one partner for the tender briefing, he argues.

HEARD replies the article was not conclusive as to whether the tender was irregular – it merely stated what the Werksmans investigators had found (as quoted above).

She adds: “… KMM as the minor party did not, according to Dullabh, have the means to service the tender and thus was not in a position to bid for it on its own, nor to subcontract the major part of the contract.”

Editor informed about conflict of interest

The reporter wrote: “The emails from Werksmans show that when Letsoalo’s conflict of interest was ascertained, which was in July 2016, the investigators informed the editor at that time, Verashni Pillay.”

LETSOALO says that the reporter neglected to mention that, at the time this had happened, the contract with Prasa had long expired and Letsoalo had already resigned from KMM in 2012.

HEARD says  the article clearly stated that the matter of Letsoalo’s interest in KMM came about when the then Prasa spokesperson, Victor Dlamini, raised concerns over articles published in the Mail & Guardian in July 2016. “We believe this places the time Letsoalo’s conflict of interest was first brought to the attention of the editor at the time, was 2016,” she submits.

She adds that:

  • the timelines are further set out in para 30: The emails from Werksmans show that when Letsoalo’s conflict of interest was ascertained, which was in July 2016, the investigators informed his editor at that time, Verashni Pillay; and
  • para 33: Daily Maverick has independently verified from company reports that Letsoalo was a member of KMM from its registration on 15 June 2009 until his resignation on 17 April 2012, at which point it became a limited company.

Dignity, reputation

LETSOALO complains that the reportage has negatively impacted his dignity, reputation, career and family.

HEARD says:

  • Letsoalo was given ample opportunity to provide his side of the story, and was further given full right of reply;
  • The information contained in the report is clearly in the public interest, given that publications such as the Mail & Guardian profess to operate in the public interest; and
  • The reporter stands by his reporting of the story, and the editor does not believe that the Press code was flouted in any way. In addition, Daily Maverick published a full right of reply, in which Letsoalo elaborates on his response as published in the original article.  The right of reply in fact raises the same points that are contained in this letter of complaint to M&G, and are thus already in the public domain.  The facts are clearly in dispute, with allegations subject to investigation and we stated as such in the article.

Analysis

My overriding concern is that the M&G is currently investigating this matter (and has suspended Letsoalo, pending the outcome).

Section 1.7. 3 of the Complaints Procedures states: “Where at any stage of the proceedings it emerges that proceedings before a court are pending on a matter related to the material complained about … the Ombud … shall forthwith stop the proceedings and set aside the acceptance of the complaint by the Public Advocate, unless it is shown that the issue complained about is not among those that the court is adjudicating.”

Even though this clause pertains to matters before a court, I believe in this case it also extends to the newspaper’s current investigation – and therefore, this office has no business in interfering with that exercise.

We cannot have two investigations into the same matter, running parallel with each other. It is not fair for Letsoalo to involve this office in matters that are material to an investigation which is presently underway.

In addition, the M&G has given Letsoalo ample space to put forward his side of the story.

I have recorded the arguments above merely for the sake of the record.

Finding

The complaint is dismissed.

Appeal

The Complaints Procedures lay down that within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.

Johan Retief

Press Ombud