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Another SA music industry institution called out for alleged financial irregularities

Another SA music industry institution called out for alleged financial irregularities
Clive Hardwick. (Photo: Supplied)
Diana Neille
By Diana Neille
14 Oct 2024
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In yet another music sector scandal, a prominent board member of the industry conference, Moshito, has accused the long-standing entity, which is supported by the Department of Sports, Arts and Culture, of ‘governance failures’ and misappropriation of funds.

Respected gospel music producer and former actor Tshepo Nzimande has accused the 20-year-old Moshito Exhibition and Conference of wasteful and irregular expenditure and malpractice. Nzimande is a long-standing member of the board. 

Moshito was founded in 2004 as the pan-African answer to Midem, a globally popular industry conference held in Cannes, France, every year. It touts itself as an international forum where “music meets business and music creates opportunities”. 

Moshito became mired in scandal almost immediately after its founding. In 2006, while still not even formally registered as an entity, several members resigned from its board in protest against the then chairperson Nick Motsatse’s failure to address concerns about financial accountability and mismanagement. The resignations were written about in a Sunday World article from September of that year. 

The then representative on the Moshito board from the Recording Industry of South Africa (RiSA), David du Plessis, wrote to Motsatse, saying RiSA “[could not] continue to be involved in Moshito until such time as the issues of ownership, financial control, funding, general management and secretarial functions have been clarified to our satisfaction”.

At the time, the conference was drawing about R3-million in funding annually. Its treasurer was music industry consultant David Alexander. 

Almost two decades later, it appears history is repeating itself almost word for word.

Moshito Tshepo Nzimande. (Photo: Supplied)



In a letter emailed last week to the chief of staff of the Department of Sports, Arts and Culture (DSAC), Bakang Lethoko, Nzimande blew the whistle on recent irregular practices by both Moshito and the department that, he wrote, “could contravene the Public Finance Management Act”, including:

  • The appointment and payment of service providers without board approval, or without seeking competitive quotes;

  • Seemingly excessive payments to service providers, whose details were withheld from the board and from subsequent reports;

  • Zero oversight of annual reports to the DSAC by the board in 2022 and 2023. When reports were demanded, they were found to be “barely legible and incomplete”; and

  • No minutes for at least nine previous board meetings.


At least six payments made to service providers in the 2023 financial year appear to be irregular, according to Nzimande.

They include R95,000 paid to a vaguely named travel agent, AS Frank, for “international travel”; R112,000 paid to Parktown Restaurant Catering for an unspecified event for about 200 people (roughly R560 a head); R230,000 was paid to a company called Queendom for sound hire, with no quotes appended to the contract; marketing collateral from a company called Koftech cost R100,000, with no contract specified; R127,000 was vaguely allocated for “production fees and allowances” and a further R105,000 was allocated for “ambassador fees”, again with no contract/s specified. 

Nzimande became a board member of Moshito in 2018. Since then, he says no annual general meeting has been held, or new board members elected. 

“That’s how unprofessional it is,” he said. 

In its report on the 2023 conference, the “Moshito Financial Recorn” [sic] – a chaotically unspecified and uncategorised list of payments made throughout the year – appears to have been badly photocopied and is barely legible. The report was leaked to Daily Maverick by an industry practitioner who asked not to be named for fear of reprisals. 

According to its chairperson, Stanley Khoza, Moshito secured a grant of R2-million for the 2023 event – he does not fully specify from where – R200,000 of which would be received from the DSAC upon receipt of the report. A further R300,000 was disbursed from the DSAC to “cover its programme shortfalls”. It is unclear if this amount was part of the “grant”. 

Another tranche was received from the Southern African Music Rights Organisation (Samro), but the amount also went unspecified. The total expenditure for the 2023 conference was R2.157-million, “pending verification and approval by the diligent efforts of the Moshito accountants, auditors, treasurer and chairperson”, Khoza wrote in his financial report. 

As per Nzimande’s letter, no financial audits have been forthcoming, this year or previous.   


Collusion


Moshito is a recipient of funds from the country’s primary Collective Management Organisation (CMO). CMOs are members-based organisations whose sole mandate is to collect royalties on behalf of music makers, administer the funds and pay them out to the relevant rights holders.

As written about in a recent Daily Maverick article, these organisations have been accused of misappropriating hundreds of millions of those royalties collectively, and using music makers’ income in part to spuriously support initiatives like Moshito, labelling payouts as “development expenditure”, under the guise of supporting the industry. 

Allegations of collusion between CMOs, and between other industry entities, have also become more frequent. 

Moshito is no stranger to collusion. Khoza also serves as deputy chairperson of Airco, a CMO which sits on the Moshito board, and which was accused of “gross mismanagement” by a majority of its own members in 2015. All of those members have subsequently deregistered.  

Despite still claiming to collect music video royalties on behalf of artists, Airco’s membership has dwindled to a handful. Khoza’s own company, Show Them Flames, is one. 

CMOs without a representative or verifiable membership contravene the code of conduct that governs entities of this nature. Regardless, Airco continues to receive R320,000 a month from the allegedly bankrupt national broadcaster, the SABC.

The deal was purportedly brokered by a former consultant, Nhlanhla Sibisi, who is now the CEO of the Recording Industry of South Africa (RiSA) and its CMO, RiSA Audio Visual (RAV). Sibisi also sits on Moshito’s board.

Nhlanhla Sibisi. (Photo: Supplied)



He has recently been accused of perjury, related to the misappropriation of royalties belonging to former record label owner Clive Hardwick and his business partner, Harvey Roberts. Hardwick’s case against RiSA and other music industry entities, including Gallo Music Investments, has led to landmark legislation enacted by the Information Regulator of South Africa, to help protect music makers’ rights.

Clive Hardwick. (Photo: Supplied)


Money well spent?


Despite the hefty price tag, and a rosy report to the DSAC, it appears only 350 people registered for Moshito 2023. Even fewer appear to have attended the seven-day event at the SABC studios in Auckland Park. One-hundred-and-fifty-one attended its free street festival on 4 November.

“Attendance was bad, even though it was the 20-year anniversary,” said Nzimande.

It’s not clear why the 20th anniversary was held last year when the organisation was formed in 2004.

“The event… didn’t go the way we planned. We are supposed to showcase artists, but for some of the events organisers had to run around Gauteng, looking for people to attend,” Nzimande said. 

“It was not planned properly, and I think they did that deliberately.”  

Nzimande says that now that he has blown the whistle he will shortly resign from the Moshito board. 

Daily Maverick reached out to the DSAC to confirm it had received Nzimande’s letter, and to seek comment, but no response was forthcoming by the time of publication. Moshito spokesperson Nongelo Chiume wrote in an emailed response that the claims had “no basis in fact”. 

“It is unfortunate that the letter circulated is not a true reflection of Moshito affairs but a personal view of Mr Nzimande alone,” he wrote.

“Board matters are not for public discussion, but this code has been violated by Mr Nzimande and it will be processed accordingly.”

The 2024 conference is believed to be taking place towards the end of October, but no announcements have been made yet on Moshito’s website or social media profiles. DM

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