Naspers unit probing contract with TV station sold by Guptas

By Tiisetso Motsoeneng

JOHANNESBURG (Reuters) - A unit of African media and e-commerce giant Naspers said on Monday it would investigate claims of improper payments made to a TV channel while it belonged to the Guptas, a family of wealthy businessmen with close ties to President Jacob Zuma.

MultiChoice, the biggest pay-TV provider in Africa, said it would look into whether there had been "corporate governance failures" after a group of investigative journalists raised questions about payments it made to ANN7, a news channel owned by the Guptas until August this year.

Don Eriksson, a board member at Multichoice, a wholly-owned subsidiary of Naspers, said the unit would assess whether the payments were in line with industry standards, adding that the allegations had "negatively impacted" Multichoice's reputation.

Both Naspers's chairman Koos Bekker and Chief Executive Bob van Dyk have backed MultiChoice's probe.

"The issue lies firmly with MultiChoice, they need to take the appropriate steps," Naspers Chief Executive Bob van Dijk told Reuters.

Citing leaked documents, amaBhungane, a non-profit group of investigative journalists, reported that MultiChoice had made a one-off payment of 25 million rand ($2 million) to ANN7 in September 2015.

The documents also showed MultiChoice had hiked its annual payment to ANN7 to 141 million rand from 50 million rand six months after some of the unit's broadcasting proposals were adopted by the government in a new policy for broadcasters.

Multichoice has said the one-off payment was to help improve production quality at ANN7 and that the increase in its annual payment was "fair value" due to the scale of resources needed to run a 24-hour news channel.

LEAKED DOCUMENTS

AmaBhungane has released some of more than 100,000 leaked emails and documents implicating government officials in a graft scandal that has piled pressure on Zuma and deepened splits in the ruling African National Congress party.

The Gupta brothers have been accused by an anti-graft watchdog of using their friendship with Zuma to amass wealth and seek favours for their business partners.

Both Zuma and the Guptas have denied any wrongdoing.

ANN7's new owner, Mzwanele Manyi, dismissed the allegations about improper payments as part of a ploy by rival media firms to stifle competition.

"We are sitting here without any proven unlawfulness," Manyi told Reuters.

Manyi bought the Guptas' media assets - which as well as ANN7 also included newspaper New Age - for 450 million rand using loans provided by Gupta-controlled holding company Oakbay Investments.

The Guptas said at the time they were selling their media assets to clear their name "in the face of unfounded media allegations" about their relations with Zuma.

Civil society groups have lobbied MultiChoice to remove the ANN7 channel from its platform, saying the channel has run a divisive campaign in support of Zuma - a call rejected by Naspers' chairman Bekker.

"We've debated removing the channel," Bekker told news website Moneyweb in a interview. "But we really don't think in a democratic, open country it's a good idea."

($1 = 13.6289 rand)

(Editing by James Macharia and Gareth Jones)