MultiChoice faces backlash over ANN7 payments

16 November 2017

Investment

MultiChoice has denied it signed a revision to an agreement with formerly Gupta-owned 24-hour news channel ANN7, in terms of which it would pay the channel R150 million/year.

But the news that it has been paying the channel at all provoked a backlash from consumers on social media on Thursday.

Responding to e-mailed questions from TechCentral, MultiChoice said the draft contract (PDF) — contained in the so-called “Gupta leaks” e-mails — was never finalised.

The draft contract came to light on Thursday after a portion of the leaked e-mails were published online.

The e-mail that contained the draft amendment to the channel supply agreement between MultiChoice and ANN7, sent from former Gupta lieutenant Nazeem Howa to one of the Gupta brothers, Rajesh “Tony” Gupta, showed plans were afoot to change the original deal, which was signed in December 2012. It’s not known why the amended deal was not signed.

The draft “third channel amendment agreement” stated: “With effect from the effective date (April 1 2014), the fees payable by MCA (MultiChoice Africa) … shall be increased from R50 million/annum to R150 million for the remainder of the term. For the avoidance of any doubt, the increased fees for the remainder of the term shall be calculated pro rata from the effective date to the end of term”. The unsigned amendment suggests that MultiChoice had been paying R50 million/year up to that point for the supply of the channel, which until recently was owned by the controversial Gupta family.

The unsigned amendment agreement also proposed changing the duration of the contract to ten years – so, expiring in 2024. Read the full article on MoneyWeb here.