ICASA issues radio licence to deregistered company
Regulator ignores compliance requirements
- The Independent Communications Authority of South Africa (ICASA) has issued a radio licence to a company which is not compliant with registration requirements.
- A licence was awarded in 2007 to Luonde Media to operate Makhado FM in Limpopo.
- The licence was renewed in about 2012 and again in 2018, even though Luonde has been dormant for years and has been deregistered by the Companies and Intellectual Properties Commission.
ICASA has allowed a Limpopo community radio station - and perhaps others - to operate as a profit-seeking company, against the terms of its licence.
An investigation by Limpopo Mirror into the licence awarded to local community radio station Makhado FM has revealed that ICASA has issued a licence to a company which has been dormant for years.
Makhado FM was launched in 2007, when a licence to operate a community radio station was awarded to a Section 21 (not-for-profit) company, Luonde Media Resource Centre. The original board members were not active for long and seemingly lost interest, leaving the station’s staff members to fend for themselves.
However, ICASA renewed the licence in around 2012. Like many other community radio stations across South Africa, after a few years Makhado FM battled to survive - with more downs than ups.
Finally, 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 company, which by that time had already been deregistered, according to Companies and Intellectual Property Commission (CIPC) records.
So, for at least the past five years Makhado FM has been under the control of a profit-seeking company, which is contrary to its licensing conditions. The radio station does not have a legitimate board in place. Yet funders include the Media Diversity and Development Agency (MDDA) and it gets advertising from municipalities, government departments and private businesses.
Seemingly, ICASA was well aware of the situation, but did not intervene.
Luonde Media was registered in September 2006, according to CIPC records - and 16 years later the same people are still listed as active directors. The six directors include the controversial Dr Alfred Nevhutanda, former chairperson of the National Lotteries Commission and Hope Ramaphosa, former wife of President Cyril Ramaphosa.
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 a television channel. But in spite of generous funding from the then Department of Communications 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.
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.
Mbedzi said that this was a way to try to continue operating while having a dysfunctional Section 21 company as the official licence holder. Luonde Media was non-compliant and the directors were absent. He claimed that an ICASA representative advised the staff to apply for a licence transfer and they filled in all the applications and continued operating as a for-profit company, though he says the company was run like a Section 21 company.
But the station was battling, as were many community radio stations. In a 2015 presentation to Parliament, the National Community Radio Forum said that 82% of community radio stations had, what they referred to as, “governance challenges”. The general picture sketched by the Forum was of an industry with a lot of hope, ambition and potential, but also with the odds stacked against them.
Early in 2017 Makhado FM held an AGM - the first in many years. Financial statements were compiled and nine new directors were elected.
Limpopo Mirror tried to contact some of the board members elected during this meeting. Prominent local businessman, Livingstone Shimango, responded saying that his term had expired some time ago and referred questions to George Mapengo. Mapengo in turn, also said that he is 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.
ICASA’s last report on Makhado FM, in March 2017, indicated that the station was struggling to fulfil its obligations to hold annual community meetings, and to provide feedback on financial performance. The report 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 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,” ICASA reported. 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.”
Nevertheless, 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 it is valid until 7 December 2023. The control of the licence is again vested in the old Board of Directors.
Yet 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 of time 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.
To try and get information from ICASA is not a job for someone without extreme patience and perseverance. Limpopo Mirror has been trying since 26 February to get answers to our questions, even using the route specified in ICASA’s Promotion of Access to Information (PAIA) manual. All our requests were ignored until finally an email on 7 March to Busisiwe Mashigo, ICASA’s Manager: Broadcasting Compliance bore some fruit.
She presumably instructed Icasa’s media liaison department to respond and a seemingly irate Paseka Maleka responded saying that “ICASA responds swiftly and efficiently to media enquiries and unfortunately you used the unattended email address (email@example.com).”
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 was submitted and whether the radio station 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, as were emails to Mashigo.
In 2019 the staff formed a non-profit company, Makhado Community Radio. In future, said Mbedzi, this will be used as a vehicle to run the radio station.
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