MultiChoice, MNet get reprieve

Allegations of non-compliance to the Electronic Communications Act (ECA) levelled against MultiChoice and MNet have been dismissed.

The allegations were first brought against the broadcasters in 2007, by Caxton and CTP Publishers and Printers Limited.

The matter was subsequently taken to the High Court, which ordered the Independent Communications Authority of SA (ICASA) to hear the matter. An ICASA Complaints and Compliance Committee (CCC) then heard the case in August.

According to ICASA, the allegations refer to non-compliance with Sections 64 (limitations of foreign control on commercial broadcasting services), 65 (limitations of control of commercial broadcasting services) and 66 (limitations on cross-media control of commercial broadcasting services) of the ECA, by MultiChoice and MNet.

Caxton submitted that MultiChoice and MNet, through their holding company, Naspers, are in Contravention of section 64 of the ECA in that a foreigner directly or indirectly has "an interest either in voting shares or paid-up capital" as a result of its exceeding 20%.

Caxton also submitted that there is a contravention of section 65 as Naspers through MultiChoice and MNet "directly or indirectly exercises control over more than one commercial broadcasting service licence in the television broadcasting service".

Lastly, it was submitted that, in relation to section 66 of the ECA, there is a contravention which will require an update and further investigation by ICASA.

The CCC found Naspers directly controls MultiChoice and M-Net, within the company law definition and also in terms of section 64 of the ECA.

It also found the definition of “foreigner” to be inconclusive so the Naspers share register indicating various shareholders with non-South African addresses, is not necessarily a problem as those shareholders might be “foreigner/s”, or they could be South African citizens with non-South African addresses.

The CCC subsequently found that foreigners hold an amount of shares that gives them 15.34% voting in Naspers. “The result is, therefore, that foreigner/s, on the information as at 31 March 2009, do not have an interest in voting shares exceeding 20%.”

For these reasons and others, the complaint by Caxton, in terms of section 64 of the ECA, was dismissed by the CCC. The complaints in terms of sections 65 and 66 were also dismissed.

It was found that sections 65 and 66 of the ECA are not applicable to MultiChoice or MNet, and neither were the equivalent sections 49 and 50 of the Independent Broadcasting Authority Act.