E-commerce and media giant Naspers and its pay-TV arm MultiChoice could now be facing a possible class action suit in the US after a law firm there announced it was starting an investigation on behalf of investors into Naspers.
In the latest fallout in the widening scandal involving allegations of corruption, collusion and undue corporate influence from Naspers’ MultiChoice unit to allegedly influence South Africa’s long-stalled digital migration switch from analogue to digital TV, US law firm Pomerantz has launched a search for investors who want to start a class action lawsuit against Naspers.
Pomerantz said its investigation on behalf of Naspers investors concerns whether Naspers and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
In its public statement issued on Tuesday it said: “On December 1, 2017, Naspers reported that its wholly-owned television unit MultiChoice had initiated an investigation into whether improper payments were made to ANN7, a South African news channel owned by the politically-connected Gupta family.
“According to local media, citing leaked emails, MultiChoice substantially increased its annual payment to ANN7 from R50m to R141m over the past two years.
“On this news, Naspers’ American Depositary Receipt price fell $3.05, or 5.58%, to close at $51.60 on December 1, 2017,” Pomerantz said in the statement.
Naspers acknowledged Pomerantz’s statement and told Fin24 on Tuesday that adjustments in global tech markets took place at around the same time Pomerantz highlights.
Naspers re-iterated that it takes the recent media allegations about MultiChoice SA seriously. It however pointed out that MultiChoice SA has many minority shareholders and the responsibility for dealing with the matter lies with the independent MultiChoice SA board.
“The MultiChoice South Africa board has therefore instructed its audit and risk committees to assess whether or not there have been any corporate governance failures at MultiChoice in regard to the ANN7 matter and report back to the board,” Naspers said in an emailed response to questions.
The ecommerce and multimedia giant said it has confidence in the MultiChoice SA board to deal with the matter, following their governance procedures. It said it will verify that the MultiChoice SA board has addressed the matter adequately.
“The MultiChoice Audit & Risk committee has confirmed the action it is taking in response to the allegations in the media. As stated above, once they complete their work following their governance procedures, they will report to the MultiChoice board, and after that has happened the Naspers board will consider whether it is satisfied with the action that the MultiChoice board has taken.”
Source: Thinus Ferreira and Fin24