Naspers says legal action not being taken against its MultiChoice subsidiary
Global law firm Pomerantz says it is initiating an investigation, but Naspers says such procedures are ‘not uncommon’ and doesn’t mean legal proceedings are under way
Naspers has not been informed of any legal action by any of its investors but the company has reiterated that it is taking allegations of wrongdoing seriously‚ a spokesperson said.
On Monday, leading global law firm Pomerantz announced it had initiated an investigation to determine if Naspers subsidiary MultiChoice was involved in any securities fraud or unlawful business practices relating to payments to Gupta-owned news channel ANN7.
According to reports stemming from leaked Gupta e-mails‚ MultiChoice substantially increased its annual payment to ANN7 from R50m to R141m over the past two years.
The Pomerantz statement added that on the back of this news‚ "Naspers’s American Depositary Receipt price fell $3.05‚ or 5.58%‚ to close at $51.60 on December 1‚ 2017".
MultiChoice and its former CEO have denied any wrongdoing and further denied that proposed payments of R100m a month to the SABC were in exchange for "political influence" over the state broadcaster’s digital migration initiative.
"We’ve seen the press release from US law firm Pomerantz. We understand these types of releases are not uncommon in the US following announcements related to listed entities‚" Naspers spokesperson Anika Ebrahim said. "They don’t mean any legal proceedings are under way or will happen‚ and we have not been informed of any legal action from any of our investors."
Ebrahim indicated that Naspers has consistently commented as follows on recent allegations in the media:
• Naspers takes the recent media allegations about MultiChoice SA seriously.
• MultiChoice SA has many minority shareholders and the responsibility for dealing with the matter lies with the independent MultiChoice SA board.
• Naspers has confidence in the MultiChoice SA board dealing with the matter‚ following its governance procedures.
• Naspers will verify that the MultiChoice SA board has addressed the matter adequately.
"The MultiChoice audit and risk committee has confirmed the action it is taking in response to the allegations in the media‚" she added. "As stated above‚ once [it completes its] work, following [its] governance procedures‚ [it] will report to the MultiChoice board‚ and, after that, the Naspers board will consider whether or not it is satisfied with the action the MultiChoice board has taken."