A secretive Memorandum of Incorporation (MOI) signed by Communications Minister Faith Muthambi has the potential to strip the SABC board of its powers and fatally undermine its independence.
This is according to a statement released by the DA over the weekend, where shadow Minister of Communications Gavin Davis warns that the MOI gives Minister Muthambi and chief operations officer Hlaudi Motsoeneng overall control of the SABC.
“As such, it stands in clear violation of section 13 (11) of the Broadcasting Act that gives the SABC Board the authority to ‘control the affairs of the Corporation’,” Davis writes.
“If allowed to stand, this Memorandum will turn the SABC from a public broadcaster into a state broadcaster. It is not an exaggeration to say that this ‘hostile takeover’ poses the gravest threat to SABC independence since 1994.”
He says the MOI signed by Minister Muthambi in September last year, replaces the SABC Articles of Association signed in 2011. The new MOI gives Motsoeneng and Muthambi control over the SABC, with the board reduced to a rubber stamp.
Section 5 of the MOI requires the Board to seek the approval of the Minister on any rule changes relating to the governance of the SABC. “This is a significant reduction in the board’s autonomy,” he says. “There was no such requirement for ministerial approval of rule changes in the 2011 Articles of Association.”
Section 13.5.2 of the MOI empowers the Minister to waive the requirement for the board to advertise and shortlist candidates who apply for the positions of CEO, chief operations officer and chief financial officer.
“This appears to be an ex post facto attempt to legitimise Motsoeneng’s appointment as COO which was made without shortlisting and advertising as required by the Articles in force at the time,” Davis writes. “This amendment could allow for a similarly flawed appointment process to be carried out for the vacant post of CEO, paving the way for Motsoeneng to be appointed.
“Section 13.5.7 gives the Minister absolute authority to decide whether the CEO, COO and CFO should be re-appointed and the terms and conditions of his or her re-appointment. This is a departure from section 19.1.1 of the previous articles that gives the Board control over the re-appointment process. This means that the Minister now has the power to unilaterally re-appoint Motsoeneng when his contract expires.”
Section 13.6.3 states that the Board can only discipline and/or suspend the CEO, COO and CFO with approval from the Minister. “This gives Muthambi the power to block any move by the board to discipline Motsoeneng, as directed by the Public Protector in February 2014,” Davis adds.
“Previously, in section 19.2 of the Articles, the board was empowered to appoint an acting CEO, COO and CFO. This power is now removed. Section 13.7.1 of the MOI says that, ‘in the event of the CEO position being vacant for whatever reason, the COO shall act in that position upon approval of the Minister’. This means that Muthambi now has the power to make Motsoeneng the acting CEO.
“Furthermore, section 13.7.4 gives the Minister the sole authority to extend an acting CEO, COO and CFO’s contract beyond an initial three-month contract. In other words, Muthambi now has the power to unilaterally keep Motsoeneng on as acting CEO for the foreseeable future.”
Davis points out that Section 14.3.1.3 of the MOI gives the Minister the power to recommend the removal of a board member, whereas section 13.1.5 of the previous Articles of Association held that this power was the preserve of the board. “It was on the basis of the new MOI that Muthambi sent letters to Board Members in December last year threatening them with removal from office.
The DA maintains that this is in breach of section 15 and 15A of the Broadcasting Act that stipulates only Parliament and the Board have the power to recommend the removal a Board Member.
“Section 20.2.4 introduces a new clause that makes the SABC liable to pay the legal fees of directors ‘to defend litigation in any proceedings arising out of the director’s services to the corporation’. This is clearly to ensure that Motsoeneng is afforded an endless supply of public money to fund the court case over his appointment as COO.”
Davis stresses that the MOI removes the power of the board to run the SABC, and puts in place a set of rules to ensure the protection and promotion of Motsoeneng.
“The implications of this MOI are profound for the independence of our public broadcaster and, by extension, our constitutional democracy. Perhaps this is why, unlike previous amendments, the Minister never officially announced the MOI when it was signed on 26 September 2014.
“It also appears that the amended MOI was never approved at a General Meeting involving the SABC Board, as required in section 9.7.2(a) of the 2011 Articles of Association. This much is clear from the first page of the MOI that indicates it was adopted by a special resolution of the shareholders, with no mention of the Board or a General Meeting. If true, this would open the MOI up to a legal challenge on procedural, as well as substantive, grounds.”
On Friday (6 February 2015), Davis sent a letter to the Acting SABC Board Chairperson Prof Mbulaheni Obert Maguvhe, as well as to the full SABC board to clarify with the resolution was approved at a general meeting, whether the board had discussed the MOI and whether it intended to challenge the MOI”s legality.
