SINGAPORE— Singapore government will intervene and have the right to terminate funding to SPH Media Trust (SMT) if misconduct or mismanagement of public funding and serious wrongdoings are found, said Minister for Communications and Information Josephine Teo.
This was said by Ms Teo addressed Parliamentary Questions raised by several Members of Parliament on Thursday (6 Jul) regarding the government’s actions in response to a report by SMT’s Audit and Risk Committee (ARC), which was published on 21 June. The ARC’s report revealed various findings, including SPH’s overstatement of daily circulation numbers.
Despite the revelation of the misrepresented circulation figures, the Singapore government is still committed to funding the media giant up to S$900 million over five years.
Leong Mun Wai, Non-constituency Member of Parliament (NCMP) from the Progress Singapore Party (PSP), has asked the Minister whether the Government’s funding agreement with SMT has been concluded and whether any funds have been disbursed.
Additionally, he questioned whether the ARC’s report would prompt a reassessment of the funds and if the funding agreement’s key performance indicators (KPIs) would encompass evaluations of SMT’s risk culture and enhancements to its risk management practices, internal controls, and processes.
In response, Ms Teo confirmed that the first tranche of funding to SMT was disbursed in March 2023.
She clarified that the alleged breach occurred before the formation of SMT when the media business was still under SPH Limited (SPHL), a privately-listed company.
As a result, the events in question did not involve public funds, as the government did not have a funding relationship with SMT until after 2022.
“Question of loss of public funds does not arise”
“In other words, the events preceded the period of funding. No public funds had been involved. Correspondingly, the question of loss of public funds does not arise. ”
Ms Teo emphasized that despite this, the government expected SMT to conduct a thorough investigation into the matter and provide the public with a proper account.
In SPH Media Group’s report released on 16 June, the group cleared the journalism and editorial departments of any involvement in the overstatement of circulation figures.
The investigation originated from inconsistencies in reporting circulation data discovered in January, leading to disciplinary action or termination of employment for several senior employees. An internal review conducted between September 2020 and March 2022 exposed these discrepancies.
The ARC concluded that the accounting impact was not considered significant to the financial statements of SPH Media Group for the fiscal year ending August 2022 as a whole. However, for the fiscal year ending August 2021, there was an approximate understatement of profits amounting to S$110,000.
Based on various findings, potential offences may have occurred. These include reporting circulation numbers in a manner inconsistent with established standards, improper accounting of revenue, and engaging in a potentially questionable barter deal to inflate circulation numbers.
Consequently, the ARC has recommended filing a police report, which the Board has acted upon.
SPH Media to benchmark their reporting to international standards
Ms Teo said SMT has shared with MCI that its follow-up is in three main areas.
Firstly, SMT will engage the World Association of Newspapers and News Publishers (WAN-IFRA) to review and provide guidance on their methods of measuring the reach of various titles.
“These are the metrics that the public, businesses, and the Government will be concerned with, to know how many people come into contact with a title’s content. ”
SMT will also improve internal controls, including:
- Tightening deal structure and pricing approval procedures, such as requirements for approvals at the appropriate levels;
- Strengthening guidelines and checks for revenue and cost recognition;Improving separation of duties among staff, to ensure data accuracy and accountability;
- Commissioning external parties to review its governance, control and compliance measures, with the aim of embedding the enhancements into a new enterprise resource planning system.
Ms Teo said SMT will enhance its risk management practices throughout the organisation and review its risk culture, and assured to the Ministry that they will implement these measures immediately and will provide us with regular status updates on a half-yearly basis.
Ms Teo defended the government’s decision to continue funding SMT
Ms Teo again reiterated the government’s decision to continue funding SMT, emphasizing its necessity.
She referred to The Reuters Institute Digital News Report released last month, which highlighted that 73% of respondents expressed trust in The Straits Times, a three-percentage-point increase from the previous year.
“This is against the backdrop of the erosion of trust in news globally, from an already modest 42% last year to 40% this year.”
“Even with dozens of news sources easily available, audiences in Singapore consistently turn to our mainstream media when they need something they can trust.”
Ms Teo stressed that trusted news media, enabled by quality journalism, is a public good that cannot be compromised.
“It is more important than ever when the environment is full of disinformation and sensationalised news. ”
“However, SMT can only deliver quality journalism if they can continue to strengthen their capabilities and reach audiences in the digital age. Media consumption has moved online rapidly, disrupting the entire industry. ”
“In the same Report by Reuters Institute, the share of respondents who consume print news has dropped to 22%, from 53% just six years ago.”
Ms Teo emphasized that the costs of maintaining professional newsrooms remain high, and investments in data and technology infrastructure require substantial upfront expenses. Meanwhile, revenue streams have significantly diminished compared to the peak of print media and advertising revenue.
Regarding additional safeguards and KPIs to evaluate SMT’s improvements in risk management and controls, Ms Teo assured that the funding agreement, concluded in March, already includes measures to ensure accountability.
These measures involve SMT submitting specific information on KPIs, including methodologies and sources. Any changes to the KPIs must have the consent of MCI, and independent external auditors must audit the KPI performance and financial statements.
Ms Teo said the Government will intervene if there is a case of misconduct or mismanagement of public funding.
“In this regard, we have built in safeguards that allow the Government to conduct our own ad-hoc audits. If serious wrongdoings are found, we have the right to terminate funding.”
“MCI will also be reviewing the terms of the funding agreement, including the KPIs and funding quantum, at the mid-term juncture. SMT’s ability to address these management issues will be taken into consideration. ”
Gerald Giam asked whether media company “X” mentioned in the report will be investigated
Various MPs also posed supplementary questions on the matter such as Gerald Giam, the Workers’ Party MP for Aljunied GRC, who asked if there would be an investigation into media company “X” which is involved in the questionable “X barter deal” mentioned in the report as not a genuine arrangement.
According to the SMT ARC’s report, the “X Barter Deal” referred to a barter (or contra) arrangement between “X” and SPH. In this deal, “X” provided “X E-paper” digital subscriptions to SPH in exchange for 15,000 digital subscriptions of The Straits Times and Business Times.
Mr Giam also raised concerns about accountability to the donors and clients who contributed to the NIE (Newspapers in Education) Fund under the impression that they were supporting the underprivileged in society, but the funds were instead allegedly used to bolster the circulation figures for SPH.
However, Ms Teo excused herself from answering Mr Giam’s question, stating that the Ministry is not at liberty to disclose the full range of the police’s investigation at the point, which is for the police to decide to look into the matter.
Regarding accountability to the donors and other parties who provided resources to SPH Limited, Ms Teo stated that the purpose of providing full disclosure of the findings was to enable these entities to make their own decisions on whether they want to take further action.
“They can if they choose to, It’s not for us to decide on their behalf. ”
NCMP Leong also sought clarification on whether the ministry is pursuing the responsibility of past top management at SPH Limited. Ms Teo reiterated that the matter would be left for the police to decide.
“A police report has been filed, the police has commenced investigations, the investigations will have to take its full course and then the decision will be taken.”
Workers’ Party MP Louis Chua from Sengkang GRC inquired whether the Accounting and Corporate Regulatory Authority and the Singapore Exchange would conduct their own investigations.
Ms Teo responded by saying that it was up to these organizations to determine whether they wanted to take action.