On Sunday, City Press published the article, “Forensic probe uncovers R3.4 million of dubious payouts by corrupt ex-Samro staff,” by Mduduzi Nyonyane.
The article refers to a December 7, 2023 announcement on Samro’s website that a forensic investigation conducted by Fundudzi Forensic Services, uncovered “gross irregularities, citing that claims were paid out without ownership proof,” along with “allegations of former employee involvement”, to the tune of R3.4 million.
In other words, members of Samro, working with administrators at the organisation, successfully colluded to steal royalties from other members over the course of the 2021/2022 financial year.
This is not the full story.
How much was actually stolen?
In December 2024, as part of an email announcing their Annual General Meeting, Samro issued minutes from a December 7, 2023 board meeting regarding the forensic report (see attached), in which they provided further key details, but in cryptic language:
“Findings included an allegation of R3 400 000 claim by a publisher on undocumented works, submitted without proof of ownership. Part of this amount was paid by the organisation to the claimant. Further, there were allegations of employee involvement. The investigations showed that former employees, familiar with the system, sold their services to publishers. These individuals likely submitted the R3 400 000 claim. From the top 60 claiming publishers, authors, and composers, R60 000 000 was claimed and R30 000 000 was paid out.”
It is unclear from this paragraph whether the amount that was stolen from music makers by Samro staff and publisher members totaled R3.4 million, or R34.4 million.
If the latter – which the above paragraph seems to imply – this will be the second time in an eight-year period that Samro has been embroiled in a multi-million rand scandal involving members’ royalties. (The first involved an investment of almost R50 million by the board, led by then-CEO Sipho Dlamini, into an entity in the Middle East that failed and was never investigated. Nobody at Samro was held responsible, despite a wealth of forensic evidence contained in two commissioned reports. Dlamini went on to be appointed as the CEO of Universal Music Group and is now the Africa chief of Gamma.)
Without access to the forensic report, we can only speculate on how much has actually been stolen from Samro’s members in this latest corruption scandal.
Muzzling members
In 2022, Samro issued a code of conduct containing a clause that muzzles members from criticising or questioning the organisation, threatening fines and termination of membership, which would cut music makers off from their royalties. This is heavy-handed, anti-constitutional behaviour for an organisation that claims to exist for the sake of its members’ benefit and wellbeing, particularly when criminal activities are being undertaken within the organisation.
“Undocumented works” slush fund
Samro controls by far the largest portion of royalties for music makers in Southern Africa. In 2023, its financial statements show its revenue was almost R600 million. An amount of more than R87 million is listed in those statements as “undistributed royalties written back”. This is the pool of funds, known in industry parlance as “undocumented works” (undoc), from which member publishers were able to steal monies from rights holders, in cahoots with Samro employees at the time.
Undocumented works is a slush fund for royalties that aren’t traceable to a music maker, or so Samro says. It is a highly suspect, murky practice that is not sufficiently explained in Samro’s annual financial reports. Figures detailing interest accruing on these monies and other information about its use, or about why these huge sums cannot be paid to the rightful owners, is not made available to members.
Transparency and justice for Samro members
Music Makers United (MMU) calls on Samro to make the full Fundudzi forensic report available to its members. Several attempts have been made to obtain this document via Protection of Access to Information Act requests (PAIA), to no avail. It appears Samro is attempting to bury this report. MMU also calls on Samro to explain to members what steps have been taken to prosecute individuals found to have been involved in stealing royalties, including members, board members and staff, and issue a statement identifying those implicated.
Samro is the Southern African Music Rights Organisation, a Content Management Organisation (CMO) mandated by its 50,000+ members to collect royalties on behalf of composers, authors and publishers from users of music (radio stations, television channels, retail outlets, etc.) It is a non-profit corporation that is unregulated and completely self-governing.
Music Makers United is a newly-formed organisation of concerned citizens and industry professionals seeking to build a robust coalition of music makers to lobby for reform of the South African music industry and its economy.
Issued on behalf of Music Makers United
January 22, 2025
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