Naspers is being probed by a US law firm over whether Africa’s biggest company by market value was involved in unlawful business practices related to a contract with South Africa’s politically connected Gupta family.
Pomerantz is investigating claims on behalf of investors after Naspers’s TV unit MultiChoice started its own probe into the contract with ANN7, a 24-hour news channel formerly owned by the Guptas. Reports in South African media have alleged that MultiChoice had a corrupt relationship with ANN7, which the family sold earlier this year.
“The investigation concerns whether Naspers and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices,” Pomerantz said in a statement on Tuesday.
Naspers investors should contact the firm if they are concerned, Pomerantz said, without saying who had commissioned the company to start an investigation. A phone call to the firm’s New York office wasn’t answered out of business hours.
The probe asks further questions about the involvement of Cape Town-based Naspers in the scandal surrounding the Guptas, who are accused of using their friendship with President Jacob Zuma to win lucrative state contracts.
US consultancy McKinsey & Co and auditor KPMG are among international companies to have found that work done for the family had breached corporate governance standards. The Guptas and Zuma deny any wrongdoing.
The News24 website, which is also owned by Naspers, reported last month that MultiChoice increased its annual payment to ANN7 to R141m from R50m, citing leaked e-mails. MultiChoice, Africa’s biggest pay-TV provider, started its own investigation as its reputation had been damaged by the allegations, it said 1 December.
Naspers shares fell 4.1% to R3 480 as of 2.03pm in Johannesburg, the lowest in more than a month. The stock declined 4.2% on Friday, when MultiChoice announced its investigation. The company owns a wide range of media and internet assets around the world, including a 33% stake in Chinese giant Tencent.
A spokeswoman for Naspers couldn’t immediately comment when contacted by phone. — Reported by Janice Kew, (c) 2017 Bloomberg LP