SPH MEDIA FUDGED CIRCULATION NUMBERS - THE ISSUES ABOVE THE DIN

SPH media fudged it's circulation numbers. What really happened is not yet fully understood. What's been released to the public is in March 2022, it initiated an internal review covering the period September 2020 to March 2022. This review uncovered errors in circulation numbers which have been overstated by about 12% or about 90,000. Three key personnel have recently exited the company.

A popular foreign blogger who quaterbacks for the government, pushes the narrative of SPH releasing the damaging findings of their internal review is evidence of integrity of state-controlled media. He jeers those who view the state media as propaganda, to the cheers of his Facebook echo chamber of followers. This really is sad. Regardless of political leanings, we should all make an effort to read different narratives and then form our own opinion. In this particular instance, the blogger and his horde of fans clearly have fixation on only one source of information. They are unaware it was a scoop by Wake Up SG who pursued a source-based information about key personnel being let go that broke the story. SPH had no choice after that but to go public.

Incumbent CEO Teo Lay Lim took over the helm on 1 Mar 2022. It was obviously a very wise move of her to initiate the internal review which lays the blame squarely on her predecessor General Ng Yat Chung (1 Sep 2017 - 30 Apr 2022). The internal review started in March 2022 which certainly could not have taken 8 months to complete. It is very likely the situation was known for several months. The sensitivity of the information would have demanded a tight lid over it. Singaporeans know too well that for the government to release such damaging information, it would have to be for a more important purpose. There is none that I can conjure up. For CEO Teo to unilaterally release the information would have ensured some internal top level warfare. No neophyte CEO would go against the Ministry. The only logical conclusion is they went tight-lipped for as long as possible. By doing so, SPH puts their integrity in double jeopardy.

What is not known at this stage is whether it was intentional or negligence. If it was negligence, what rocket science is involved in computation of circulation numbers that 3 key personnel can get it wrong? If it was intentional on their own volition, what possibly could be the motivation? Something does not add up. It seems to me the sacking of 3 key personnel was an act to put a dog off the scent. But from what?    

If it was intentional, who was behind this and what was the agenda? SPH Media had 2 main business segments - a real estate and a media. Whilst real estate is profitable, media was bleeding profusely and a decision to its future had to be made. Was the over statement of circulation numbers an attempt to persuade policy makers to delay the death knell for the failing media business? Did it play a role in influencing policy makers to spin the media segment into a separate Company Limited by Guarantee, supported by government funding of S$180m annually for the next 5 years?

In US, the SEC is the regulatory authority and fudging of circulation numbers is a very serious offence with very high fines, sometimes with withdrawal of licences. In Singapore, the Ministry of Communication and Information has jurisdiction. There is no precedence in Singapore, so the public waits.

As regards contractual liabilities, over stating circulation numbers obviously disadvantages the advertisers who have no way of checking on such data other than to rely on what they have been told. This is the reason why the SEC in US takes such misrepresentation very seriously. This is the reason why when Elon Musk revealed the huge numbers of bots in Twitter, all hell broke loose. In later years, under a non-partisan SEC, the old management of Twitter may face their reckoning. It matters not whether it is negligence or intentional, some punitive consequence must prevail. But don't expect any aggrieved advertiser to take a case against media, especially in Singapore.

I cannot find any laws broken under Info-communications Media Development Authority Act 2016 or Newspaper and Printing Presses Act 1974 that could be pursued for both negligent and intentional act of overstating the numbers. At best, there could be some breach of code of conduct. A misdemeanour.

One area where there may be actual breach of law is in GST. Circulation numbers affect the computation of foreign-domestic data which determines GST-rated and zero-GST. The IRAS would be interested to know what the real numbers are.

If the overstatement of numbers was intentional, the executives who were let go obviously acted under direction. Were they thrown under the bus in the same manner as lower level managers of Keppel in the Petrobas bribery scandal? 

After the story broke and the internet was on fire, the typical Singapore scenario of no-shows by the leadership in a crisis is once again on full display. CEO Teo and Minister Josephine Teo are both silent. Once again, a spokesperson takes centre stage. MCI gave the safe template comment of 'the situation is under review'.

And finally, what are the real numbers and what does it mean for the financial viability of SPH Media? Has it reached a red flag for the futility of maintaining a state-controlled voice in media? Is it time to stop wasting S$180m annual funding and open up the space for more private enterprise to enter the market? 

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