Text of the letter from John Copelyn, HCI CEO and Chairperson of Sabido, to the staff of eTV, October 28 2014:

28 October 2014

Dear colleagues

This past week has been a very difficult one for all of us. I wanted to take the opportunity to communicate directly with you, and where possible, provide the assurances that many of you may be seeking.

Most of you will know that as of late yesterday, Marcel Golding has resigned his position at HCI, and at Sabido, the owner of e.tv. Kevin Govender, currently Financial Director of HCI, will take over as acting CE of Sabido. There is every possibility that Marcel may pursue legal action and if he does, we have reserved our rights to respond appropriately.

The business will continue to be managed by the EXCO Comprising of Mark Rosin, Bronwyn Keene-young, Antonio Lee and Khalik Sherrif and will now be joined by Kevin and myself.

There will be very few of you who have not been following the news on his suspension.

Despite what has been contended by Marcel, I want to assure you that there was only one reason for Marcel's suspension: his decision to spend R24-million of shareholder money on investing in a supplier retail company with whom we do business.

Marcel's trades were concealed from the company, its board who had to authorize the trades, and shareholders of Sabido - who likewise had to authorize such a purchase before Marcel was entitled to proceed.

The shares were paid for through a private arrangement Marcel made with a broker and were not registered in our name. Instead they were held in the name of a banking institution with an understanding they would later be transferred to the name of a party, the identity of whom Marcel would subsequently disclose to them, but to date has not.

There is no other way to put it, but that he made a serious blunder in accumulating shares in another company, without any authorization, financial approvals or process, financed and held in this secretive manner.

This process of accumulating shares went on, without being disclosed to anyone, for nearly six months and was eventually admitted only when the shares he had purchased had fallen to half the purchase price. He had more than ample opportunity to disclose the purchase, at two separate board meetings, but remained silent.

This flies in the face of the duty of care Marcel had. It is disallowed by our shareholder agreements, every ethical business practice in any corporation and simply could not be ignored. It was a serious mistake. Worse still, he has to date made no apology for this and has expressed no remorse.

Marcel and I have worked together for a very long time and we have built several unbelievably successful businesses together. In this, we have been backed wholeheartedly by a trade union, SACTWU, which I was privileged to lead for 20 years prior to Marcel and I becoming Members of Parliament in 1994. It has stood patiently by us ever since, even when the market dumped our shares in bucket-loads when it was commonly thought e.tv might fail.

Last year, we agreed to a share swap where SACTWU swapped RI .5-billion worth of HCI shares to invest directly in Sabido. Its commitment to our media business has been unbelievably strong from the date at which we first bid for e.tv's licence until today. We could not have built our business without that support.

When Marcel sought to buy the media business from HCI over the last year, SACTWU was the party he approached to be his media partner in this bid. The truth of the matter is that SACTWU would have agreed to this partnership had it not been for its disillusionment when advised of the secret share dealings detailed above.

It is human nature to minimize the significance of wrongs that we do and Marcel seems to have completely forgiven himself in this very unfortunate issue.

Nevertheless we are just very sad that Marcel chose to suggest his wrongdoing was irrelevant and that political interference by an attorney he retained on contract, HCI, SACTWU and government all somehow conspired wrongfully to interfere in the business and were the real reason behind his suspension. By making these accusations, impugning both government and all who have supported and protected him all these years, he has not only damaged their reputations, but threatened to harm the credibility of e.tv and eNCA. It's particularly sad when one considers the very special esteem in which he holds the stations and their people.

Those of you who are news professionals will understand the enormous appeal of a story that given the content, is not only in the public interest, but also of enormous interest to the public, This is a dynamic combination for any news team. You will also know that in any news item, there is context and nuance that more than frequently puts quite a different complexion on the facts. But this time, the news involves your company, and while the events have played out in the public domain, many of you may be feeling unsettled or unsure of what the majority shareholder in your company feels about a great many issues, but most notably media freedom.

This is the issue that amongst all the press coverage, court papers and allegations, must trouble you most.

It's the one that troubles us most too. Given our long history in fighting for democracy, please let me stress that there is simply no way that HCI could ever be indifferent to political interference in the station. Apart from an ideological rejection of political interference, there are compelling business reasons never to allow this to happen.

We've built this channel as our contribution to building a sustainable, lasting democracy, free of interference, intimidation or attempts to prejudice its independence. Nothing has ever compromised that, and nothing ever will while we own it.

I urge all of you to maintain your editorial independence and uphold the integrity that has been hard earned by your company. The principles of independence and integrity are central to e.tv's and eNCA's Success, and are not up for negotiation.

If any of you have any questions, or would like to share any thoughts or guidance with us, please do so. We are open to your views and encourage you to maintain the sense of ownership you have all had in the company. We will over the coming weeks be more present among you than we have in the past and there will be every opportunity to discuss any issues with us.

This is the end of an epoch. I have no doubt Sabido will step forward and continue its growth in the digital media age in which we are to thrive with its many challenges.

Please rest assured that you all have my full support, and that of the whole of HCI especially including SACTWU. Unquestionably our media partners, Remgro, hold exactly the same commitment.

Yours sincerely,

John Copelyn

Chairperson, Sabido

Source: www.citypress.co.za

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