In South Africa, the Public Investment Corporation (PIC) has expressed concerns about the re-election of Jim Volkwyn, one of MultiChoice’s longstanding board members, due to sizable consultancy fees. Volkwyn has reportedly received over US$564,000 in fees since his consultancy agreement with the company began in 2018, leading the PIC, which holds a 15% stake in MultiChoice, to question the renewal of his contract at the upcoming AGM.
The PIC, a key player in upholding corporate governance, believes that reappointing Volkwyn would be detrimental to the company’s corporate governance principles. David Masondo, chairperson of the PIC and deputy finance minister, emphasized the need for consequences when corporate governance principles are compromised.
MultiChoice argues that consultancy agreements with board members are essential for accessing specialized knowledge and skills, particularly in areas like pay-TV. They maintain that such agreements are terminated when no longer needed but recognize Volkwyn’s expertise in navigating macroeconomic challenges and changing consumer habits.
Questions have been raised about consultancy fees paid to other board members as well, including former chair Imtiaz Patel and Kgomotso Moroka. Patel allegedly earned around R20 million the previous year for services related to strategic support and restraint of trade. Moroka’s consultancy agreement was terminated in 2023.
Elias Masilela, MultiChoice’s board chair, has acknowledged that the fees paid to certain board members are under review and likely to be discontinued. He explained that such contracts were necessary but reaffirmed the company’s unwavering commitment to effective governance.
The controversy surrounding consultancy fees and board member appointments has stirred internal debate, particularly concerning the decision to delay Patel’s resignation as chairman, an action reportedly linked to negotiations with Groupe Canal+. Despite concerns about handling the acquisition deal and conflicting reports, MultiChoice has maintained that Patel’s eventual resignation was always planned after specific milestones in the Canal+ deal were achieved.
Overall, there are ongoing discussions and scrutiny regarding consultancy fees and board member appointments at MultiChoice, with stakeholders and investors closely monitoring the situation.
