Minister Said to Have Tried to Sway E.TV Coverage of Zuma

Five days after a report on state-funded upgrades to South African President Jacob Zuma’s private home, one of his ministers attempted to influence news coverage at the country’s only private free-to-air television station, according to a lawsuit.

“I got a call from Minister Patel today,” Yunis Shaik, a director of the company that controls e.tv, said in a March 24 e-mail to e.tv Chief Executive Officer Marcel Golding, according to court filings by the executive aimed at overturning his suspension as executive chairman of Hosken Consolidated Investments Ltd. “He says that President Zuma this day opened a new dam. He wants us to cover it tonight. As this is a big story, it might be a good lead story.”

The e-mail, referring to South African Economic Development Minister Ebrahim Patel, is attached to court papers filed Oct. 22 by Golding, who says his opposition to political influence over the station’s news agenda is the real reason he has been suspended by Hosken, the Cape Town-based investment company which controls the T.V. company.

In the papers, Golding said “he was unwilling to compromise on the issue of independence and integrity of editorial content.”

Hosken said yesterday Golding had been suspended for gross misconduct of a “very serious nature.” According to Golding’s labor-court application, Hosken said Golding was suspended for asking Investec Ltd. to buy 24 million rand ($2.19 million) worth of shares in television equipment company Ellies Holdings Ltd. on behalf of Hosken unit Sabido Investments (Pty) Ltd., of which he is the CEO.

Editorial Direction

Golding said the company said he ordered the purchase “without the necessary authority and mandate of the board,” according to the court documents. He said he believed that -- as CEO -- he was authorized to make the investment decision and that the case had been compiled as a pretext to remove him.

“Mr. Golding has made several spurious allegations with regard to interference in editorial independence. These allegations are no more than red herrings,” Shaik said in an e-mailed response to questions. “It is not acceptable conduct to evade an enquiry with fanciful allegations of a conspiracy. He must answer the charges. He has a fiduciary duty to do so. He will be held to account for his conduct.”

Shaik filed an answering affidavit to Golding’s case with the labor court.

Biggest Shareholder

Thembinkosi Gamlashe, a spokesman for the Department of Economic Development, said Patel wasn’t immediately available and requested questions by e-mail. Mac Maharaj, Zuma’s spokesman, declined to comment, requesting e-mailed questions which he didn’t immediately respond to.

E.tv covered the opening of the dam in a single item on news channel eNCA at around 7 a.m., Sabido Investment Chief Operating Officer Mark Rosin said in an e-mailed response to questions.

“E.tv and eNCA have never been coerced into running a story by anyone,” Rosin said. “Requests are dealt with on their merits, their news worthiness and a range of news criteria as would be expected of an independent and integrity driven news service.”

In alleging attempted influence over news coverage, Golding said in the court application that the South African Clothing and Textile Workers Union, which is aligned to the ruling African National Congress and is Hosken’s biggest shareholder, “has persistently attempted to influence the editorial direction of e.tv news in order to further its agenda.” Shaik represents the union on Hosken’s board, according to Golding in the documents.

‘Normal Requests’

Andre Kriel, general secretary of the union, denied by e-mail that Shaik is its representative. Shaik is former deputy general secretary of the union, according to Hosken’s website.

Hosken Chief Executive Officer John Copelyn was a general secretary of the textiles union. Non-executive director Virginia Engel was a co-ordinator for the union’s welfare trust. Independent non-executive directors Mimi Magugu and Elias Mphande were both national organizing secretaries for the union and Jabulani Ngcobo was formerly a general secretary. The union holds 29 percent of Hosken.

“We are very saddened by this allegation” of attempts to influence the e.tv news agenda, Kriel said in an e-mailed response to questions. “We have not done so, other than our normal requests for our events to be covered. We do the same with all other media.”

Post-Apartheid

The conflict has ended Golding’s 19-year business relationship with Hosken co-founder Copelyn, who last week had the lock on Golding’s office changed, according to Golding’s comments in the filing.

Together they built up the company, which now has a market value of about 18.2 billion rand, with investments in casinos, hotels and a bus service. The black-empowerment company was set up to take advantage of legislation to make up for discrimination during the apartheid era, when non-white South Africans were hindered from participating in the economy. South African laws compel companies to sell stakes to black investors.

The dispute also pits two prominent post-apartheid figures against each other. Golding was a labor union activist and lawmaker while he built up his business. Shaik is a high-court attorney and a former member of a state labor-dispute settlement commission.

“Shaik has been endeavoring to increase his power and influence in the company,” Golding said in the court filings. “He purports to speak on behalf of those close to the central levers of state power.”

Graft Investigation

Shaik’s brother, Schabir, was convicted in 2005 of bribing Zuma, then the deputy president, and jailed. He denied wrongdoing and appealed the conviction unsuccessfully.

Shaik’s alleged attempt to sway news coverage came five days after South Africa’s anti-graft ombudsman found Zuma guilty of misconduct over the government’s spending of 215 million rand on his rural home at Nkandla, including the construction of a pool and an amphitheater.

After not getting a response from Golding, who was at a conference, Shaik contacted news staff at the channel to suggest Zuma’s opening of the dam be covered, according to the court documents.

E.tv Chief Operating Officer Bronwyn Keene-Young, who Golding said is his spouse, said to Shaik by e-mail that his decision to contact the editorial team directly when she and Golding were unreachable was “really not acceptable.”

‘News Integrity’

“The whole issue of news and news integrity is a sensitive and a fragile one,” she said in an e-mail cited in the court filing.

Keene-Young declined to comment when called by Bloomberg.

Shaik replied that the pair had promised Patel they would cover South Africa’s infrastructure program. The notion that he was jeopardizing media values by contacting editorial staff is “simply ridiculous,” he said in an e-mail cited in the court filing.

The attempted interference didn’t stop there, according to the documents. Shaik texted Golding on May 19 saying it “would be terrible” if an e.tv feature on gambling addiction features Tsogo Sun Holdings Ltd., the casino and hotel operator of which Hosken is the biggest investor. On Aug. 14, SACTWU’s Kriel requested e.tv cover a live speech to be delivered by Patel, according to the court filings.

Kriel confirmed the request was sent, saying it was “not unusual” and that SACTWU didn’t “insist” when told it was not possible.

Shares Fall

Hosken Financial Director Kevin Govender said the company filed opposing court papers yesterday and can’t comment further. Golding didn’t immediately respond to an e-mail requesting comment. His lawyer Lawrence Whittaker declined to comment while Copelyn didn’t immediately respond to phone calls and an e-mail.

Hosken shares fell 2 percent to 150 rand at the close in Johannesburg. Ellies stock fell 5.2 percent to 1.27 rand after climbing 40 percent yesterday, the most since 2007.

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