Regulator turns blind-eye to non-compliant radio stations

ICASA, the country’s watchdog for the telecommunications, broadcasting and postal industries, is turning a blind eye to regulations regarding licensing and monitoring the compliance of community radio stations. 

An investigation by Limpopo Mirror into the licence awarded to local community radio station Makhado FM has revealed how ICASAis issuing licences to non-compliant and deregistered companies - and created a mess that will be extremely difficult to unscramble.

Our investigation revealed how a lack of compliance monitoring is causing major problems and could open the door to abuse and possible corruption.

Makhado FM was launched in 2007, when a licence to operate a community radio station was awarded to a Section 21 company, Luonde Media Resource Centre (Luonde Media). The original board members were not active for long and seemingly lost interest, leaving the station’s staff members to fend for themselves.

And, like many other community radio stations across South Africa, after a few years, Makhado FM battled to survive - with more downs than ups.

As a way forward, the station’s staff members formed a separate company in 2014 and asked that the licence be transferred to this new company. They did so on the advice of ICASA, according to Makhado FM’s station manager, Makonde Mbedzi. But the transfer to the new company never happened and in 2018 ICASA re-issued the licence to the original founding Section 21 company, which had already been deregistered by that time.

For at least the past five years, therefore, Makhado FM has been under the control of a for-profit company, which is contrary to its licensing conditions. The radio station also does not have a legitimate board in place. It receives funding from, among others the Media Diversity and Development Agency (MDDA) and receives advertising from municipalities, government departments and private businesses.

ICASA appeared to be well aware of the situation but did not intervene.

A dodgy director?

Makhado FM came under the spotlight last month when new revelations surfaced about corruption within the National Lotteries Commission (NLC). In a presentation to Parliament’s Trade, Industry and Competition Portfolio Committee, the Special Investigation Unit (SIU) reported that former NLC board members had allegedly received millions from Lottery beneficiaries.

One of the people implicated in the SIU's investigation is the former chairperson of the NLC Board, Dr Alfred Nevhutanda. Nevhutanda is a director of at least 40 companies, including some involved in mining, investment and communications. He is still listed as an active director of Luonde Media Resource Centre, the entity that is licensed to operate Makhado FM.

Online publisher GroundUp revealed last week how Nevhutanda’s R27-million private luxury estate in the north of Pretoria was partly paid for by non-profit entities that had received Lottery funding. The list of entities that paid money into this account include Mushumo Ushavha Zwanda. 

On 9 October 2017, Mushumo paid R4 million into the trust account of attorneys handling the sale of the property purchased by Nevhutanda. The money was for the benefit of Vhutanda Investment, a private company, of which Nevhutanda is the sole director. 

Limpopo Mirror has previously reported on the ill-fated project of Mushumo Ushavha Zwanda in the Vhembe area. This Soshanguve-based NPO was given more than R27 million to build an old-age home at Maila village. The project was abandoned in 2019 and today the half-built structures serve as a monument to how corruption allegedly flourished during Nevhutanda’s 11-year term as chairperson of the NLC board.

Nevhutanda is no stranger to the Vhembe District. He was a lecturer at Makhado College of Education up until 1998. In 2009, he was appointed to the NLC Board during the presidency of Jacob Zuma. He also served as chairperson of the ANC in Limpopo and was one of the key fundraisers for the party’s 2009 election campaign in the province.

An ambitious start

When Makhado FM began broadcasting in late 2007, it listed Nevhutanda as its chairperson. The other directors of Luonde Media are Ms Hope Ramaphosa, Mr Junior Ramovha, Ms Kedibone Makwarela, Adv Mutheiwana Sikhwari and Mr Patrick Ndou.

Luonde Media was registered in September 2006, according to Companies and Intellectual Property Commission (CIPC) records - and 16 years later the same people are still listed as active directors. 

Initially, the company had big plans to expand and dominate the local media industry. In a 2007 presentation, it stated that future projects would include a printed media division and an own television channel. The “chief patron” of the radio station was the former acting Vhavenda ruler, Toni Mphephu Ramabulana.

In spite of receiving generous funding from the then Department of Communications (DOC), which sponsored state-of-the-art broadcasting studios, the venture never fully got off the ground. Bad financial management resulted in unpaid rent and escalating electricity bills. The station also relied heavily on the services of volunteers, with presenters seldom being paid decent salaries, if they were paid at all.

The situation at Makhado FM was not unique, however: similar problems were experienced at many community radio stations throughout the country. In a 2015 presentation to Parliament, the National Community Radio Forum (NCRF) said that 82% of community radio stations had what they referred to as “governance challenges”.  

The problems that the NCRF listed included a lack of administrative skills and interference by board members. In some cases “board members are incompetent and rent crowds at AGMs,” the NCRF said in its presentation. The general picture sketched by the NCRF was of an industry with a lot of hope, ambition and potential, but also with the odds stacked against them.

Makhado FM’s struggle

The last time that ICASA issued an annual compliance report on Makhado FM was in March 2017, indicating that the station was struggling to fulfil its obligations. The most serious problem was an inability to hold two compulsory annual community meetings, and to provide feedback on, among others, its financial performance. The station also did not elect new directors in line with its founding documents, ICASA said in its report.

ICASA’s report also graphically illustrated the difficulties that community radio stations face in adhering to all the requirements of their broadcasting licence. Makhado FM, for instance, must broadcast 50 minutes of news per day, of which 70% must be local news. It may not spend more than 40% of the airtime playing music. Even the music content must be 70% local.

The biggest challenge for Makhado FM probably lies in its language prescriptions. The predominant language to be used (60%) is Tshivenda. The three other languages to be used are Sepedi (20%) Xitsonga (15%) and English (5%).

“Over the years, the radio station has been engulfed with serious problems related to governance issues,” reads ICASA’s report. The report concludes that “whereas strides have been taken by the Licensee to comply with certain obligations as per the licence terms and conditions and relevant regulations, the Licensee has failed to comply with its language, music (as per promise of performance) and news obligations, as well as community participation.”

Another chance?

Early in 2017, the radio station held an AGM - the first in many years. Financial statements were compiled, and nine new directors were elected. The new directors were, however, not meant to replace the Luonde Media directors, but instead to serve on the “radio station’s board”. Several of the directors later stated that this was never disclosed to them.

Three years before, in 2014, a separate company was formed, called Makhado FM. It was registered as a public company, with three directors/shareholders: Elias Makonde Mbedzi, Faith Thokozile Ramatshimbila and Avhapfani Rossinah Rasilavhi. All three are currently working at the radio station.

Makonde Mbedzi, who at the time was - and still is - station manager, said that this was a pragmatic approach to try to continue operating while having a dysfunctional Section 21 company as the official licence holder. He claimed that an ICASA representative had advised them to apply for a licence transfer and they had filled in all the applications and continued operating under the Makhado FM (for-profit) company.

In June 2018, ICASA renewed the station’s licence, but again in Luonde Media’s name. The effective date for the new licence was 8 December 2018 and the licence is valid until 7 December 2023. The control of the licence is again vested in this Section 21 company’s board of directors.

When the new licence was granted, Luonde Media was already non-compliant in its reporting to CIPC, whose records show the company’s status as “final deregistration” as of 26 August 2016.

The CIPC explains on its website that all companies and close corporations are required by law to lodge their annual returns within a certain period every year. “Non-compliance with annual returns may lead to deregistration, which has the effect that the juristic personality is withdrawn, and the company or close corporation ceases to exist,” the CIPC states on its website.

Luonde Media effectively ceased to exist before ICASA issued its new licence. ICASA’s own compliance report, done the previous year, also indicated that the radio station had ticked almost none of the boxes in terms of compliance.

A communicator that will not communicate

To try and get information from ICASA is not a job for someone without extreme patience and perseverance. On 26 February this year, an email was sent requesting information about Makhado FM, using the address provided on ICASA’s website. After being ignored, a follow-up email was sent on 1 March, using more of the addresses listed on the website. This was again ignored and on 3 March the route specified in ICASA’s Promotion of Access to Information (PAIA) manual was followed and an official request for information was made. This was also ignored.

On 7 March, an email was sent to Ms Busisiwe Mashigo, ICASA’s manager: broadcasting compliance. (Someone was kind enough to assist with her email address.) She then presumably instructed ICASA’s media liaison department to respond. A seemingly irate Mr Paseka Maleka responded, saying that “ICASA responds swiftly and efficiently to media enquiries and unfortunately you used the unattended email address ([email protected]).”

Maleka forwarded the licence-renewal document for Luonde Media Resource Centre and confirmed that the last available compliance report for Makhado FM was conducted in March 2017.

Follow-up questions were sent to ICASA (using Maleka’s address) about the re-issuing of a licence to Makhado FM when the company, according to CIPC records, had been deregistered. ICASA was also asked whether a tax compliance certificate had been submitted and whether the radio station had provided proof of conducting any annual general meetings and had provided feedback on its finances.

The request for information was ignored as were subsequent follow-up emails and emails to Ms Mashigo.

A severe case of confusion?

Makhado FM’s station manager, Mr Makonde Mbedzi, admits that things may not have been done in the most proper manner, but he believes that they had no other option. Luonde Media was non-compliant, and the directors were absent. They had to continue operating the radio station and that is why a separate company was formed in 2014.

According to Mbedzi, the company that was registered was supposed to be a non-profit entity but, as a result of confusion, was incorrectly registered as a public company. Nevertheless, the company was run as a non-profit company, he said. In 2019 they formed an NPO, called Makhado Community Radio, which will be used in future as a vehicle to run the radio station.

Mbedzi was adamant that ICASA was always updated as to the developments and had even assisted them with the applications to have the licence transferred. He blamed much of the confusion on a lack of specialised knowledge and guidance from institutions such as ICASA.

The confusion as to who controls what is seemingly quite widespread. Limpopo Mirror tried to contact some of the board members elected during what seems to be the last AGM, held in February 2017.

Prominent Louis Trichardt businessman Livingstone Shimango is listed as an additional member. He responded by saying that his term had expired some time ago and referred questions to George Mapengo. He, in turn, also said that he was no longer on the radio station’s board and referred questions to the chairperson, Thinandavha Matsa. “I have been with them till 2018 or so. Since then we haven't had any meetings. I have since not heard anything from the manager,” Matsa responded.

Both Matsa and Shimango said that they were not aware of the fact that the radio station was being run by a for-profit company.

Date:02 April 2022

By: Anton van Zyl

Anton van Zyl has been with the Zoutpansberger and Limpopo Mirror since 1990. He graduated from the Rand Afrikaans University (now University of Johannesburg) and obtained a BA Communications degree. He is a founder member of the Association of Independent Publishers.

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