Subpoenas served on SA music industry executives in ongoing royalties legal row

17 Jul 2024

A seemingly straightforward dispute over a royalties claim by a former independent record label owner has turned into a sprawling, precedent-setting legal spat between the businessman and several music industry entities. On Wednesday, subpoenas were issued to three executives affiliated with the Recording Industry of South Africa

The senior public prosecutor in the Randburg Magistrates’ Court, Zanda Mthimunye, has signed off on subpoenas to three music executives linked to the CEO of the Recording Industry of South Africa (RiSA), Nhlanhla Paul Sibisi. He has been accused of committing perjury in the course of an investigation into RiSA’s administration of music video royalties by the Information Regulator South Africa.

Robert Cowling, a director of RiSA and the general manager of Gallo – the country’s oldest independent music label and publisher – RiSA finance and operations director Nishal Lalla and music industry service provider Clive van der Mescht have been subpoenaed to appear in court.

The investigating officer, Captain Aaron Mamiala of the Linden Police Station, served the papers at RiSA’s head office in Randburg on Wednesday afternoon. The three executives have been identified as individuals in a position to supply “significant material information regarding the alleged commission of the crime of perjury” by Sibisi, an Advocate of the High Court, in May 2022.

The allegation stems from a sworn statement Sibisi made, stating that RiSA’s subsidiary, RiSA Audio Visual Licensing (RAV), had never paid royalties to Gallo that were lawfully owed to Clive Hardwick and his former business partner, Harvey Roberts. Hardwick has been fighting for access to information regarding the administration and distribution of music royalties.

Sibisi also cited Hardwick’s non-membership in RAV as a reason for withholding information, as well as the need for the protection of commercial information.

In April 2023, following an extensive investigation that included a two-day public hearing, the Information Regulator’s enforcement committee issued an instruction to RAV to provide Hardwick with full access to the information he had been seeking.

In the process, the Information Regulator SA set the precedent that anyone seeking information regarding their rights to royalties could no longer be barred from doing so on the grounds of commercial confidentiality reasons.

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Hardwick and Roberts sold Gallo the repertoire of their successful music label, Bula Records, in 2014, on condition that Gallo collect any outstanding royalties from 2009 to 2014 on their behalf, subtract a 10% administration fee, and pay the two of them every quarter.

Gallo made four deposits before abruptly halting the payments in 2019. Upon inquiring about the stoppage, Hardwick says Cowling falsely claimed that, because Bula had been liquidated, they no longer had rights to the repertoire.

Hardwick then turned to RiSA directly for proof that Gallo continued to receive Bula repertoire royalties from RAV after 2014. When Sibisi refused to provide any information, Hardwick submitted a Promotion of Access to Information Act (Paia) request to RiSA, because he believed Gallo was withholding payments to him and Roberts.

RAV eventually consented in 2022 to grant Hardwick limited access to certain documents that “disclose(d) the playlists from broadcasters”, for a fee. Hardwick told Daily Maverick that he found the records to be “inaccurate and incomplete”.

When he couldn’t get any further information from RAV or RiSA, he turned to the Information Regulator, which administers and enforces the Paia.

The independent regulatory body instituted an investigation, stating Hardwick’s case represented “an issue that affects the majority of musicians in South Africa”.

In an earlier affidavit deposed at the Linden police station (reference number CI 17/21), Sibisi stated “no such royalties relating to Bula repertoire, and arising from the SABC licence were paid by the respondent (RAV) to Gallo or any third party for the period pre-2014”.

On the same day, Cowling also stated under oath in an affidavit seen by Daily Maverick that Gallo hadn’t received any payments related to Bula repertoire royalties, despite having reportedly implemented the collection agreement between the two companies himself, as Gallo’s general manager at the time.

In February 2024, Antos Stella, the CEO of Gallo’s holding company, Music Arena, confirmed in documents seen by Daily Maverick that an internal investigation had accounted for the missing Bula royalties, including eight payments made beginning in 2015, from RAV to Gallo.

The findings – and Gallo’s subsequent agreement to pay in full those outstanding royalties to Hardwick and Roberts — critically undermined both Sibisi and Cowling’s sworn statements.

“We are aware of the subpoenas by the senior public prosecutor,” said Information Regulator spokesperson, Nomzamo Zondi.

“This matter has taken longer than it should. We do not take it lightly where, through our processes to gather evidence on a case seeking to ensure that the right of access to information is exercised, someone would make a misrepresentation under oath,” she said.

Gauteng SAPS spokesperson Colonel Noxolo Kweza confirmed a case of perjury was opened on Wednesday and that Section 205 subpoenas were served to RiSA’s offices.

RiSA and Cowling did not respond to Daily Maverick’s requests for comment by the time of publishing. Neither did the IFPI, which oversees the music recording industry globally.

A full report on Hardwick’s ongoing dispute over royalties and transparency with RAV, Gallo and other music industry entities will be published by Daily Maverick in the coming days, as part of its ongoing investigative series, Scratched Record. DM

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