Johannesburg – MultiChoice announced Thursday, (22 August 2024), that it will not discontinue the controversial consultancy fees paid to certain board members.
Earlier this year, Business Times reported that newly appointed board chair Elias Masilela had indicated that these special consultancy fees would be reviewed and likely scrapped.
These arrangements involved three board members, including former chair Imtiaz Patel, receiving consultancy fees for professional advisory services.
The board justified these payments by arguing that the cost was lower than hiring external consultants.
However, the consultancy agreement with board member Kgomotso Moroka, which earned her R1.5 million, was terminated last year following shareholder concerns.
Another board member, Jim Volkwyn, who received R5.1 million in consultancy fees, continues to benefit from the agreement, according to Business Times.
The company’s latest annual report reveals that Volkwyn was paid R6.49 million for his services in 2024.
The report states that his consultancy agreement involves providing extensive and regular professional advisory services to the group CEO.
According to the report, Volkwyn’s consultancy role is global in scope, advising on key group strategies and projects.
The board argues that his deep understanding of the company, gained over nearly 40 years, provides a strategic advantage that outweighs the cost of external consultants.
Additionally, the board has determined, following external legal advice, that this agreement does not compromise Volkwyn’s status as an independent non-executive director.
In contrast, former chair Imtiaz Patel, who was reported to have received $1.1 million (R20 million) last year for a restraint of trade and strategic advisory services, stepped down as chair three weeks after MultiChoice announced he would oversee a takeover bid by French company Canal+.
In the latest annual report, Patel was paid $2.5 million or R45 million for his service.
As the company’s annual general meeting (AGM) approaches on August 28, the company has confirmed that Volkwyn will seek re-election as a director.
MultiChoice also confirmed in an email response that Volkwyn’s consultancy agreement will expire in 2028 and will not be renewed.
“Patel, no longer a board member, remains on a restraint agreement,” said the company.
The AGM notice indicates that Volkwyn, James Hart du Preez, and Dr. Fatai Sanusi are up for re-election as directors.
However, it does not disclose to shareholders that Volkwyn will be the only director still receiving consultancy fees. The company’s annual report also does not disclose such.
TechFinancials attempted to reach Volkwyn on his mobile, but was unsuccessful.
Volkwyn stepped down as lead independent director on April 1, 2024, and Masilela temporarily took over this role before becoming board chair on April 23, 2024.
Since these changes, MultiChoice has not appointed a new lead independent director but has stated that it will do so in due course.
In June, MultiChoice reported a 9% year-on-year decline in active subscribers, with a 5% drop in South Africa, amid challenging market conditions both locally and across Africa.
The company, which is currently being acquired by France’s Canal+, attributed the decline to a difficult consumer environment.
*This article first appeared in our sister publication TechFinancials
