Given the explosive allegations made in the last two weeks regarding the basis for the contract between ANN7 and Naspers’s subsidiary MultiChoice, Moneyweb attempted to get the previous communications minister, Yunus Carrim, and Naspers chairman Koos Bekker to face off on the SAfm Market Update with respect to exactly what transpired when MultiChoice was aggressively lobbying the government and the board of the SABC to drop set-top boxes with control features.

Control features would have allowed set-top boxes to receive encrypted digital signals and thereby enabled entrants to the pay-television market which has been dominated by MultiChoice since its advent in the 1980s. Of course, every company is allowed to lobby government with respect to policy, but did MultiChoice breach a line? And were its deals with the SABC and ANN7 motivated in part to block competition by influencing government policy? This is what the two parties told Moneyweb interviewers, in separate interviews just minutes apart on live radio.

Warren Thompson: It’s time to talk to the previous Yunus Carrim, who joins me on the line now. Good to have you with us, Yunus.

Yunus Carrim: Good evening to you.

Thompson: We want to get straight into it. Obviously, many people have read the articles that have been written this week around revelations that certainly MultiChoice wanted to influence the decision of the SABC regarding government policy at the time with respect to the set-top boxes.

I think just to set this interview up, Yunus, let’s just discuss the timeline, because it’s a very interesting coincidence of events from an outsider’s perspective as to what happened. And if we go back to July 2013 — I understand you were appointed as minister in early July 2013 — the government policy at the time around the set-top box and the digital migration was that it was going to allow a technology, an encryption that would allow black entrepreneurs and other entrepreneurs interested in providing pay-TV to these set-top boxes which were going to be used to allow these analogue televisions to accept the digital signal. From that starting point, just lead us through, from your perspective, what transpired after that, after you became minister with respect to the policy and the influence, if any, of MultiChoice in the direction of that policy.

Carrim: Firstly let me say it’s not appropriate for a former minister to speak about the role he or she played in a previous portfolio. Currently I’m an ordinary member of parliament and I chair, for my sins, the finance committee. But where issues about integrity of any politician, whatever role he might have played surface and when blatant misrepresentations are made in the public domain, I have no choice but to respond. I didn’t ask for this to happen. I’ve been especially quiet and careful not to comment. On only one occasion did I actually, when Lloyd Geddy did sound a report that Koos Bekker, now the chairperson of Naspers, had written in March 2014, a full three to four months, three months I think, before President Zuma appointed his new cabinet for 2014-2019, which speculates that I’ll be out soon. He made some disparaging remarks about me, which he is free to do, that’s his right, but the question was put to him by the journalist: “How is it that you know during March 2014 what would happen at the end of May 2014? How would you know Carrim would be on his way out?” He refused to reply and it served only to reinforce a view that MultiChoice and Naspers also campaigned against the minister at the time, which also of course they are free to do.

Let me be very clear. The policy on having digital encryption was not mine. I was merely there for 11 months. It was first mooted in 2007 or 2008 — I don’t have my figures here… but just quickly to respond to you. The policy emerged in 2008 when I think Ivy Matsepe-Casaburri was the minister. It was carried through all the way.

In 2012, in December, at the Mangaung conference in a long resolution, part of it entailed the need to tackle the high level of monopoly in the ICT sector, and create space for new entrepreneurs.

When I became minister, we facilitated a brilliant set of mediation led by Charles Newpin – very well known. Peter Harris was there too, and a young woman called Basetsana Molebatsi. They brought all the sides together, including MultiChoice, e.tv and so on, SABC, to find some sort of consensus between those who wanted encryption and those who didn’t.

Finally, the policy we took, which was adopted by the ANC’s NEC subcommittee led by then, by the current minister Lindiwe Zulu, and taken to cabinet committee (and) unanimously adopted on 3 December by cabinet itself — that became cabinet policy.

And in it what we did was strike a compromise as we saw it. Those who wanted to use encryption were free to do so, and those who didn’t want to use encryption didn’t have to do so as it wasn’t compulsory. However, we made it clear that those who wanted to use encryption will have to pay the extra US$2 there, so that money would be churned out to the state — and we’d intended that partly that money would be used to help the SABC, which was desperate for funds. So, that was basically the policy.

After that, there was quite a campaign against that policy, even before in the MultiChoice/SABC agreement signed a week before I was appointed as minister, there is a condition that says something to the effect that the SABC will not support encryption and it has nothing whatsoever to do with the agreement for a 24-hour news channel which was also welcomed. So what is the provision doing there (if) it’s not to shape government policy vicariously or through this means.

And secondly, what seems to have emerged from the minutes now, and I have no choice now but to respond, it is exactly that, we knew many of those things, there was very little in the public domain that I wasn’t aware of, but it’s certainly true that through the MultiChoice/SABC agreement Naspers and MultiChoice in particular sought to shape government policy.

Thompson: So it was very clear from that position that they were trying to shape the policy, and you viewed that deal, which would see Naspers paying SABC news for the use of the news channel, the 24-hour news channel, roughly R100m/year. You viewed that as a ploy to dictate the policy, because I noted that in my research I think in one letter that you addressed to parliament you said, on 26 July 2013, the SABC said is supports set-top box control, which meant the boxes that had the ability to encrypt messages and allow pay-TV users… And then on 12 August 2013, they opposed it. And in between that — we come back to this timeline — the deal was struck for Naspers to essentially air the SABC news channel. So you view that as a direct consequence of the SABC changing its policy towards the set-top boxes?

Carrim: Firstly, the deal between the SABC and MultiChoice was signed I think a week before I got appointed. I think that was the first week of July. I think I got appointed on about the 7th, and that deal was signed a week or so before. And it was part of the condition — you can look at the agreement itself — our lawyer said, for the channel.

Now the experts that advised us also told us that R100m is not enough, given what the SABC was offering — full access to the archive. And whether it legally constitutes co-ownership of the archive is neither here nor there, it’s the monetary value of the archive that our advisors — I’m no technical expert, we got advisors on this matter — also pointed out that that SABC1 and 2 if I’m correct — I know this was done years ago, and I have no time here to look up the correspondence or the e-mails and other briefing documents that I brought — but as I remember it, SABC constituted among the biggest viewership of DStv at the time. So the amount the expert said that SABC was getting was R100m, but they felt it was closer to above R1bn. I may be wrong, but certainly R100m was far too little.

So, what happened was the ad hoc SABC inquiry that took place in parliament last year did not discuss the matter of the disputes within the SABC on set-top box encryption, the little of the elephant in the room, many of the few, within board members, within officials and between board members and officials, was around whether encryption should occur or not. That was not the issue before that committee. However, following comments made by the former board chair, Sandile Tshabalala, I was told by various people to say while she doesn’t mention it specifically, including officials of the department of communications, she is representing you wrongly. And I then watched the whole sitting subsequently and then decided, with the consent of the chief whip of parliament, to write to the board. And that’s the official letter you’ve seen, which is an annexure to the final report of the ad hoc parliamentary inquiry into the SABC.

Former communications minister Yunus Carrim

So, when we first got the letter from Sandile Tshabalala no less, to say that they do support encryption, it’s not a problem, we should go ahead. And two weeks later the same Sandile Tshabalala wrote back to say no, no, we don’t support encryption. I can’t prove this, but I was told by senior SABC officials — hopefully you’ll speak to them in time — that they had no choice but to turn this around because it’s part of the SABC/MultiChoice deal. Moreover, earlier interim board members wrote to me to say there was no board meeting that took any decision to drop the encryption policy. And if my memory serve me correctly, no agreement in the board meeting that the SABC/Nedlac agreement would go through with the conditional access-provision clause. So these board members wrote to me — they are e-mails I have, but obviously I won’t embarrass people, they say they disagree with it.

May I also say something patently clear to you, because this is the sort of campaign they were waging against the chair, the minister at the time. This provision for encryption was not to serve the narrow business interests of e.tv, which is how MultiChoice presented it. In the first instance, it was meant to serve our own public broadcaster, which was meant to have used this for a variety of ways to begin to challenge the dominance of MultiChoice. Moreover, it was meant to open the doors for new black, in particular African, entrepreneurs in the pay-TV sector through the licence that (communications regulator) Icasa was about to issue. In fact, we found it untenable that 98% of pay-TV belongs to one company. Naspers, on its own at the time, according to our experts, owned 60% of the weekly newspapers, 50% of the dailies, 70% of the magazines and a big Internet company.

Now today, this very afternoon, following the article in the Mail & Guardian, which I didn’t solicit, I was phoned to respond to, based on the e-mail leaks — Naspers has issued a statement to mention one, a meeting they had with me with another minister. But they continue to forget that Koos Bekker met me within a month of my appointment, sometime I think it was in August 2013, in Cape Town. The main purpose for me to be there was to convince me of the folly of the encryption approach. He seemed to think that because he is so successful in the media industry and because he’s served on government panels under President Mbeki at the time, ICT, that I should listen to him. I explained to him that we had now facilitated the mediation process and were looking for compromises. But he was extremely dogmatic and not open to that matter. I had several call exchanges with him as well as the process unfolded, I’m utterly clear. I’m quite happy to debate with him. You can call him to your programme. I am utterly clear about this. It is absolutely not true that Mr Koos Bekker had a hands-off approach to the issue of government policy on digital encryption. In fact my very first meeting with him was solely about that.

Secondly, Imtiaz Patel, the CEO of MultiChoice, often deferred to him, and seemed to take his cue from Mr Bekker and when he first met me he asked me if I would meet Mr Bekker. So, Mr Imtiaz Patel seemed to be more like organising a campaign and putting things together. It was Koos Bekker that was the key player on this matter. So, for Naspers to say that they must make MultiChoice look into this is really disingenuous. In the statement today, they suggest that it’s linked to calling for ANN7 to be withdrawn from DStv. Firstly, I never ever said that. That is a campaign I think waged by Outa. So ask Mr Bekker, if you like, to your programme, when I’m happy to engage with him.

Thompson: Thanks, Yunus. We did do that. We asked him to engage with us. He said he was committed to an interview at the time and was flying abroad, but does want to come back to us next week. We are going to have to leave it there, but thank you very much for your time.

Interview with Naspers chairman Kook Bekker and presenter Ingé Lamprecht on RSG Geldsake. This interview was translated from Afrikaans to English for our readers’ convenience.

Ingé Lamprecht: The media and Internet giant, Naspers, came under fire this week due to allegations that MultiChoice wanted to use payments to the Gupta-owned channel, ANN7, to swing government policies in its favour. The chairman of Naspers, Koos Bekker, is on the line, and wants to respond to the allegations. Good evening, Koos.

Koos Bekker: Hello, Inge, nice to chat.

Lamprecht: Koos, tell us what is Naspers’s current stance, what is your position on the MultiChoice situation?

Bekker: That’s a complex question. I will answer you but can I give it to you piece by piece? Look, the entire thing actually centres around the ANN7 channel, and the fact that it is broadcast, that it is done so on MultiChoice’s platform, and that MultiChoice is paying for it. And I think that this is upsetting very good people that say they are reading all these horrible things about the Guptas, why are you doing this — why aren’t you cutting off the channel? So if I can start at the end, we have debated this. When the channel was started in 2012, the Guptas were general, ordinary businessmen, and you know MultiChoice — like the name, is a multi-platform which wants to host a variety of voices on its platform. And as long as the chances allow, we are happy to host you. We want a lot of news voices — we have Russian news that insults America, we have CNN, and Fox News that’s right-wing, and Turkish news and Chinese news and Al Jazeera — everyone. Because people have different preferences, for example, I like you, RSG, I listen to you often. But my English colleagues won’t.

So, news is a very diverse thing, the more voices you have the better. In that context, the agreement was signed in 2012 — it’s a voice, it’s a credible voice, it represents a sub-section. But now, the last couple of months, all these scandals have emerged: the two books, the public protector’s report. And now people say, but you are carrying this channel, and look there. And this is now the problem, it’s a bit like Harvey Weinstein – Meryl Streep is seen with him in a photo that was taken five years ago, when she still thought he was great. In the meantime the scandals have been revealed, and now it is an embarrassment to her. That’s more or less MultiChoice’s position. What was initially broadcast was okay, but today it is an embarrassment. So we’ve debated removing the channel. For example, you can just say I’m taking you off air, I’m abandoning the contract. So we’ve debated, but we really don’t think in a democratic, open country it’s a good idea. You know, it will satisfy many people, especially the DA, which of course wants to see chaos within the ANC.

But think about it — how does it work in a democracy? Two weeks before the ANC elections — whether you like the channel or not, it’s representing the views of a group of people, and they want their views to be public, and they can only do it via the MultiChoice platform, if MultiChoice removes them, they are off air. Is it really sensible to do it two weeks before such an election? What are we doing to politics if we do? The people that are advocating for the removal, what if your voice is silenced in the future? You know, someone says, I don’t like your perspective? Like RSG, I don’t like Afrikaans, we’re removing you from the platform. That is such a radical move.

Lamprecht: On that point, Koos, there was definitely a public perception that Naspers was not acting sternly enough regarding the MultiChoice issue. Perhaps not only about the broadcasting of channel ANN7 itself, but also the allegations that have been made. Today MultiChoice announced they are launching an internal investigation, is this truly enough?

Bekker: Look you are completely right about the perception. And if we reacted a bit slower, we are asking for mercy, but you see, the problem is, we are spread across many countries. This guy is sitting in India, that guy is sitting in Russia. It takes some time before the issue is processed, and you have your ducks in a row to be able to do something. And why we are perhaps particularly sensitive about how this situation is handled, remember Naspers is in 120 countries. We have Russian material, we have minorities, we have shareholders, we have a board. If Naspers reacts recklessly and it removes the autonomy of a local, fully constituted board, it’s very serious stuff. Where does it end? Next time it will be Brazil and the time after that, Greece.

And you’re undermining the confidence of the board. And we have a fantastic board at MultiChoice. So they met yesterday, and responded that they’ve taken their time to organise themselves, but these are complex issues. Let us do the following: some of the allegations are clearly ridiculous, you can see it at first glance – I will highlight two examples in a second. All allegations need to be investigated. So, those we are not addressing right now. But let’s create a committee and give them the assignment. We tell them to take this seriously and investigate everything, and to report back to us and to Naspers, and then we make it public. So, then I think we have a good, solid process to investigate these issues. But you know, let me just give you two examples of the absolutely ridiculous crap that has emerged, that only has the goal of harming Naspers’s image. For example, there’s this allegation that Takealot has the Guptas as shareholders. It takes three minutes to check the shareholder register, and see that there are three shareholders. Us, Anton Cronje and an American. That’s the story. Or take the DA, they’ve come out with a story that there was a clandestine meeting between the SABC and MultiChoice and they discussed all kinds of criminal things.

Here’s the record. Now we look at the record and we see that firstly, it’s the board and management of the SABC, the whole big group, and the heads of MultiChoice, at request of the SABC, at the SABC’s headquarters. The meeting was recorded, that’s why there is a record. And that’s now supposedly clandestine. So, we take the record to two law professionals, and we tell them read this, and tell us below the surface, if there seems to be any criminality. The lawyers said there wasn’t. Now we could return to the DA and say you’ve recklessly alleged this, it is completely untrue, and what you want is to provoke us to remove the ANN7, an ANC voice, before the ANC congress. But do you really think this is good for the democratic process? So these are the sort of things we are currently addressing.

Lamprecht: Koos, my time is running out, but I just want to ask one more question before we let you go. We are in quite a unique period in our country’s history, there is a lot of concern about the direction we are heading in regarding corruption, and reckless expenditure, isn’t now the time for Naspers to take a hard stance, to set an example of zero tolerance going forward? We are taking absolute control here, and even if there are only allegations, we are cleaning out our closets?

Bekker: But you know your entire proposition of cleaning insinuates that there is something wrong. That you have to confirm first. So far we don’t know at all, because most of the allegations have been absolute crap. They are ill-intentioned claims people have made, but the goal is not to determine how to investigate, but the goal is to irritate Naspers to the extent that they eventually remove ANC from the platform. And that’s the question, if you really go and sit with people and say, you talk about this SABC meeting and stupid decoder things and encryption, a load of crap. Rather tell us what your real goal is. What is the DA’s motive? Their goal is to annoy us so that we will take the ANC off air, now, two weeks before the election.

And we really don’t think it is democratic or healthy — and you know a good test is to put yourself in those shoes, imagine this was an election where Afrikaans people’s interests were voted on, and someone came to a platform, they came to Telkom and said these guys are rude, or corrupt, or whatever, nail them and take them off the air. Do you think that is good for the democratic process? Last night, I was thinking of something I hadn’t realised before, if Oscar Pistorius had a line at Telkom, Telkom is a lot like MultiChoice, it’s a platform that serves everyone. Now Oscar is found guilty of murder, the worst crime we have. Do you think it’s right that Telkom cuts off his telephone line, is that how the community works? Now if you ask people, I’ve asked two people today, they said no that’s completely unfair. [inaudible]

Lamprecht: Koos, unfortunately we are having sound trouble, so we will have to let you go. But thanks a lot for talking to us. That was the chairman of Naspers, Koos Bekker.