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SPH Media Group reports alleged circulation fraud to police and initiates major reforms

SINGAPORE — SPH Media Group has filed a police report after potential violations were identified in a comprehensive audit and risk committee investigation into the overstating of circulation numbers.

The media company, publisher of The Straits Times, stated it would fully cooperate with the authorities in the ensuing investigation, following recommendations by the committee, appointed by SPH Media Holdings’ board in January to probe the inflated figures.

The Chair of the audit and risk committee, Mr Max Loh, clarified that the police report was not against specific individuals or entities but encompassed the investigation’s findings. Loh urged the public to let the police lead the investigation without any interference.

SPH Media Group’s report, dated 16 June 2023, publicly available on their website, cleared the journalism and editorial departments of any involvement in the overstatement of circulation figures. Legal advisers from Allen & Gledhill and accounting firm Deloitte were commissioned to assist in the forensic discovery and analysis of pertinent data.

The investigation stems from inconsistencies in reporting circulation data discovered in January, leading to the disciplining or dismissal of several senior employees. An internal review conducted between September 2020 and March 2022 revealed these discrepancies.

According to the 14-page report presented to the SMT board, the actions taken against the employees and former employees in January were “reasonably justified.” The report indicated that those still in the company operated under the misguided belief that their superiors’ practices were accepted practices within the company.

Significantly, the report revealed an overstatement of SPH’s daily circulation numbers by 82,600 using August 2021 data. This overstatement constituted approximately 10% of the reported daily average circulation. SPH Media did not disclose the parties involved.

Despite this controversy, SPH Media confirmed there was no significant accounting impact to the financial statements for the fiscal year ending in August 2022.

SMT CEO Teo Lay Lim had earlier clarified in an email to advertisers that circulation data was not the basis for SPH Media’s advertising packages. The company instead relied on independent third-party research agency data on reach and readership.

The investigation also identified several matters potentially constituting offences, with parallels drawn to similar cases in Hong Kong and the United States. The report recommended that SPH Media Group should seize this opportunity to evaluate its risk culture, improve its risk management practices, and continue to enhance its internal controls and processes.

Simultaneously, a culture of open risk discussion should be fostered, where employees can openly discuss risks and challenge superiors without fear of reprisal.

The committee also recommended a comprehensive review of the company’s control environment and practices to balance operational efficiency and expected standards of conduct and accountability.

Ms Teo reassured employees and stakeholders that the company is taking necessary measures to address the issue and restore its reputation for trustworthiness.

The report also provided an insight into how the circulation numbers were manipulated. Bulk copies printed and distributed to third parties, though not illegal, were counted even if they were returned, unsold, or undelivered. The implicated individuals, mainly from the circulation division, knowingly included undelivered copies in the reported numbers.

SPH Media Holdings Board had tasked its Audit and Risk Committee in January to delve deeper into these misrepresented circulation figures.

The circulation scandal first came to light in January when Wake Up Singapore (WUSG) reported the sacking or disciplining of several senior executives following an internal review.

According to a whistleblower, Ms Teo was said to have told staff to “let the matter rest” during a town hall meeting over the actions taken against the staff involved in the misrepresentation of circulation figures. No response has been received from SPH Media in regard to the clarification sought over this matter.

Meanwhile, the Government of Singapore has reaffirmed its commitment to fund SMT up to S$900 million over five years, despite these recent events.

In a parliamentary address, Mrs Josephine Teo, Minister for Communication and Information, emphasized the need to preserve local news outlets as they shape the Singaporean identity and provide reliable, accurate information amid the challenges brought about by the digital revolution.

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