27/11/2017 12:34 GMT | Updated 27/11/2017 12:34 GMT

MultiChoice 'Could Join The Ranks Of KPMG And Bell Pottinger' Over Gupta Deal

Could the multinational face the same public wrath as McKinsey, SAP and KPMG?

Mike Hutchings / Reuters
A DStv satellite dish in Khayelitsha township, Cape Town, May 25, 2017. DStv belongs to MultiChoice, a Naspers company.

Civil society groups are demanding that pay-TV giant MultiChoice come clean on its contractual dealings with Gupta-linked channel, ANN7, amid claims of a corrupt relationship with former communications minister Faith Muthambi.

Questions are being raised over the Naspers-owned company's links to the controversial business family following further leaked Gupta emails.

Last week, News24 reported that MultiChoice allegedly made a once-off payment of R25 million to ANN7 -- which the Guptas sold in August to Mzwanele Manyi -- and increased its annual payment to the broadcaster from R50 million to R141 million.

News24 reported that the payments came after the Guptas seemingly assisted Muthambi in getting President Jacob Zuma to transfer certain broadcasting powers to her -- after which she pushed through a decision in favour of unencrypted set-top boxes, which benefited MultiChoice.

MultiChoice has since denied the allegations.

Media Monitoring Africa director William Bird said although professional lobbying is common around the world, MultiChoice should have been wary of the current political climate around state capture.

"If you look back to 2014, when state capture first became an emerging reality, there were various attempts to control or shift the discourse around communications. The Guptas employed Bell Pottinger, there was a deliberate attempt in the SABC to shift control to [Hlaudi Motsoeneng] and there were also issues around digital terrestrial television (DTT)," Bird said.

"[Muthambi] was doing her own thing. [Zuma] split the communications portfolio in two... It was the perfect opportunity for MultiChoice to step in with their lobbying. Professional lobbying is common around the world so we cannot think it was only MultiChoice doing it."

Bird said the company should have been more mindful of the Guptas and their links to state capture.

"MultiChoice was the enabler. Most multinationals have no morals, but there is a bigger political context behind these actions. Now they are caught between a rock and a hard place, because what would it say to the ANC if they cancelled ANN7 now?" Bird said.

In a statement on Monday, Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said MultiChoice should explain its position, failing which the company may suffer the same "plight and public wrath" meted out to Bell Pottinger, KPMG and others.

"Hiding behind confidentiality clauses and telling half-truths is no longer an option in today's world of citizen power, when the public can exercise its purchase strength to trigger the demise of organisations that profit from unacceptable and undue conduct," said Duvenage.

"We now call on management at MultiChoice to come clean and provide us with all the facts related to the transactions."

In its response to News24, MultiChoice said it was standard practice to pay for mainstream news channels.

"While we understand that some people may not be aware of it, it is standard practice to pay for mainstream news channels -- particularly for local, 24-hour news channels. The fee structure for the ANN7 contract is in line with the costs of developing and running such a channel, and ANN7 is definitely not the highest-paid local news channel on the DStv platform", it said.

MultiChoice said the once-off R25 million fee mentioned in the article was "also not unusual".

Multichoice is a Naspers-owned company, as is HuffPost SA.