(Bloomberg) -- Naspers Ltd.'s South African TV unit won't renew a contract with a 24-hour news station formerly controlled by the politically connected Gupta family and pledged to pay closer attention to channel ownership in the future.
Multichoice should have acted more swiftly when concerns were first raised about ANN7's relationship with the Guptas, who are accused of using their friendship with President Jacob Zuma to win lucrative state contracts. However, the TV provider's shortcomings do not extend to corruption or illegal activity, the company said in a statement Wednesday.
“There has been management failure,” Naspers Chief Executive Officer Bob Van Dijk told reporters in Johannesburg. “Mistakes were made and we need to relook at processes. No individuals will be fired over the matter.”
Naspers, Africa's biggest company by market value, last month started an internal probe into its dealings with ANN7. That followed reports in South African media that Multichoice had a corrupt relationship with the Guptas, who sold the channel last year and have denied any wrongdoing. ANN7's contract will expire in August and Multichoice will open bidding for a replacement.
Payments made to ANN7, including an upfront 25 million rand ($2.1 million) in 2015, were “neither abnormal or unusual” when negotiating with TV channels about broadcasting on a network, Multichoice said. All relevant contracts were reviewed by the company and attorneys Webber Wentzel.
To contact the reporter on this story: Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.net.
To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, John Bowker, Karl Maier
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