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During the Feb. 6 Parliament sitting, Minister for Communications and Information (MCI) Josephine Teo fielded questions regarding the issue with SPH Media Trust's (SMT) inflated circulation numbers as the government pledges to continue to fund SMT as they restructure.
Teo addresses SMT circulation issue
From Sept. 2020 to Mar. 2022, SMT found that in some months within that period found that circulations numbers were overstated by up to 90,000 average daily copies.
Teo said in her statement that these took place while the business was still under SPH Limited, a privately listed company.
Teo acknowledges the effect of the discrepancy, which has impacted SMT on numerous levels, which resulted in the matter being investigated thoroughly.
Teo stated, "[SMT] will have to rectify what needs to be rectified and be transparent about how they proceeded".
No change in funding
In her speech, Teo reiterated that SMT will be held accountable for this incident and that the government will continue to fund and support SMT as long as it achieves the Key Performance Indicators (KPI) outlined by the government to receive the funding.
Circulation numbers are not a key consideration regarding the government's reason for providing funds to SMT, amounting to S$900 million over five years.
She addressed certain questions filed by Members of Parliament (MPs), confirming that the government had independently audited the financial statements and other data that SPHL had provided, focusing on reach and readership, before deciding the grant public funding.
As to whether the circulation figures that then-Communications Minister S Iswaran had cited when speaking in Parliament in 2021, those were from 2017 to 2020. As this fell outside the September 2020 to March 2022 window for SMT’s review, Teo said “we cannot conclude that they were inaccurate.”
Government cannot speak on behalf of SMT
Questions were also asked about how long circulation numbers had been overstated for and its financial implications; the manner, timing and extent of SMT’s disclosure of its review; police investigations, and corporate culture.
Teo said MPs’ concerns were valid, but that those questions should be addressed to SMT. Teo said that SMT had its own accountability structure, and that the government could not speak on behalf of SMT. Teo said SMT’s board had initiated a further investigation in the circulation discrepancy, and it was therefore premature for the government to say more.
MCI, she said, expected to receive the results of that investigation.
Teo said that the government welcomed the board’s “resolve to examine the findings of its internal review”, but also that both the board and SMT management needed to be mindful of its public duties. SMT had a responsibility to maintain the public’s trust in it, and needed to discharge these responsibilities diligently in a timely manner, she added.
The first tranche of funding
Member of Parliament (MP) Jessica Tan questioned when the first tranche of funding will be released to SMT for the Financial Year 2022 in light of the current situation, as no funds have been released yet.
Teo replied that the funding would be released to SMT once the funding agreement is concluded, and the KPIs outlined are adequately set and safeguarded.
"We do not know"
Worker's Party MP Gerald Giam asked if the figures cited by then-Communications Minister S Iswaran in 2021 were accurate, and if the inflation of the circulation figures was a long-standing practice that "didn't raise eyebrows" until the new management came in.
Teo replied: "We do not know". Teo added that Giam's questions might be "better addressed" once SMT's audit and risk committee completes their investigation and shares its findings.
"Until then, I would not speculate," Teo said.
What would happen if investigations reveal any criminal sanctions or civil liabilities?
MP Zhulkarnain Abdul Rahim asked what would happen if the investigations carried out by SMT risk and audit findings reveal any criminal sanctions or civil liabilities.
In addition, Zhulkarnain asked what steps MCI would take to "ring-fence" the future funding to SMT to ensure that "the funding will be committed to the purposes that it's been given".
Teo said she would not "pre-judge" the outcome of the investigations until SMT's audit and risk committee completes its investigations and shares its findings with the Ministry.
She added that if there is any evidence of laws that have been broken, it will be SMT's obligation to refer the matter to the police.
"Even in those circumstances, we will have to look at what specifics have been revealed in order to assess the funding that the government has committed to provide," she said, adding: "There are safeguards in place, and we will exercise them as necessary."
Teo emphasised that currently, the government's commitment to fund the capability development of SMT has not changed, and the amount of funding given remains valid.
Effects of inflated circulation numbers on financial statements
Worker's Party MP Louis Chua asked about the effects of the inflation of circulations on SMT's financial statements, mainly as it happened when SPH was a listed company that was subjected to the various market rules under Singapore Exchange (SGX).
"And these are obviously information which is relied on by advertisers as well as various capital market participants alike," he said.
In addition, Chua asked if any regulatory actions are being taken against current and former employees and the board.
Teo replied:
"Mr Speaker, [on] the Member's question on financial impact, the answer is we do not know. And that is the reason why the SMT board has decided to ask its audit and risk committee to investigate the matter more fully. And until they have completed their work and share their findings, I think everything else that we say is speculative."
Measures to prevent this from happening again
PAP MP Don Wee asked in Mandarin if there are any measures in place to ensure something like this does not happen again.
Teo reiterated that while circulation is not one of the key considerations for funding SMT, the overstatement of the numbers is "not right".
She pointed out that these discrepancies in circulation numbers were uncovered due to an internal review initiated by the SMT management.
"They are the ones that want to put things right by convening a further review by their audit and risk committee," Teo said.
She added, "It is clear that the intent of the SMT board as well as the management is to put things on the right footing and we should support them in this process".
Public trust in SMT
Worker's Party MP He Ting Ru questioned whether trust in SMT was broken and the extent to which trust was broken. She also asked if there are any steps to help restore the public's trust in SMT.
"People might be thinking if the organisation goes to such lengths to falsify circulation figures... would we still be able to trust the content that's delivered by these organisations?" He Ting Ru asked.
In reply, Teo said, "Speaker, I will be careful about the terms that we use to describe SMT, its management or its actions until the audit and risk committee completes its investigation and shares its findings. I will not prejudge the outcome."
SMT board will share its findings with MCI once investigations are completed and "rectify what needs to be rectified". She added:
"The board is accountable to the members of the CLG, but they also have a responsibility to let the public know how they intend to proceed. I think this responsibility is not lost on them. If there was any doubt that they did not take this matter seriously, I don't see why they would have convened another review by their own audit and risk committee."
The environmental impact
Workers' Party MP Gerald Giam inquired about the environmental impact of the inflation of circulation numbers, enquiring about the total number of newspaper copies printed, counted and destroyed.
Teo said this question should be addressed after the audit and risk committee has completed its investigations. "At this stage, we do not know."
Teo stated that while MCI understands the importance of the environmental impact, they are not in a position to "respond to it authoritatively".
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Top photos via Josephine Teo's Facebook and Lee Wei Lin