Three top SABC execs suspended over hidden profit share agreement.
By Lehlohonolo Lehana.
Three SABC executives have been suspended following an internal investigation that uncovered a hidden profit share clause with Discover Digital, a service provider contracted to manage the public broadcaster's digital content streaming platform, SABC Plus.
In an internal memo on 7 February the SABC told staffers that COO Ian Plaatjes, group executive for video entertainment Merlin Naicker and group executive for sales Reginald Nxumalo have been suspended.
Their suspensions came after legal advice from the Werkmans law firm.
The Werkmans legal opinion comes after the SABC did its own internal audit into the secretive profit-sharing deal that came to the conclusion that the three executives failed to act in the SABC's best financial interests.
According to Werksmans Plaatjes, Naicker and Nxumalo deliberately concealed the crucial information of the 7.5% profit-share agreement from the SABC's executive committee during their presentation of the deal, before it was signed and also misled the committee when they said the public broadcaster would get 100% of the advertising revenue made through SABC+.
Werkmans found a prima facie case for gross dishonesty by Plaatjes, Naicker and Nxumalo in the SABC+ deal with Discover Digital.
It was projected that SABC Plus would make between R150 million to R200 million annually.
The executives were found to have misled the company when they said the SABC would be getting 100% of the advertising revenue in the deal.
The secret profit share agreement was kept under wraps until the SABC's then head of legal, Advocate Ntuthuzelo Vanara, questioned the clause.
The trio had signed the deal without Vanara and then CEO Madoda Mxakwe.
Responding to Vanara's query, Plaatjies and Discover Digital managing director Stephen Watson asserted that the 7.5% ad revenue share applied to the agreement, according to a City Press report.
While it is not clear whether the three benefited from the deal, the lawyers found that their failure to act in the best interests of the SABC had broken the trust.
Nxumalo caught wind of the impending suspensions and resigned.
Lungile Binza is now acting SABC COO and Lala Tuku, SABC head of local content, is now acting head of video entertainment.