The cash-strapped SABC - which is probing several contracts after years of free rein by its executives and service providers - has been paying a communications company a retainer fee of half a million rand a month.
The broadcaster has paid R5.5 million in retainer fees since December last year.
Young and Rubicam South Africa was given business to market SABC products from December last year in a contract that does not specify a service termination date.
Young and Rubicam produces material for print and publishes artwork and creative material. It also produces advertising material for TV and radio.
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Spokeswoman for the company Aziza Ebstein did not return messages left for her.
The Tribune is in possession of the contract, which was described by one executive - who refused to be identified - as excessive.
It could not be established if any rules were breached, but the SABC's interim board has unravelled several contracts after it was revealed that staff and service providers were milking the broadcaster.
The contract with Young and Rubicam was approved by SABC's head of legal services Ntsietso Mofokeng, who quit the Land Bank last year.
She could not be reached for comment, but SABC spokesman Kaizer Kganyago claimed that Mofokeng could not immediately remember the details of the contract in question.
Although the company was given business in December last year, the contract was signed in June this year by Mofokeng and another executive whose name is known to the Tribune.
A month before the public broadcaster sealed the deal with Young and Rubicam, it had paid a retainer fee of R1.4m for October and November only.
This meant that the SABC paid the consultancy R700 000 for each of the two months.
From December, the SABC decided to enter into what appears to be an infinite contract with the international agency, agreeing to pay a half-a-million rand retainer fee monthly.
"The client undertakes to remunerate the company a monthly retainer fee to the value of R500 000....in respect of all services performed by the company in terms of this agreement to the extent and for the periods starting 1 December 2008 until the termination of this agreement," states the contract.
"The client will process and discharge all payments due to (the) company in respect of project costs after they have been incurred by the company in accordance with the terms of this agreement, at the end of each month.
"In order for the client to process payments, the company shall be required to submit all invoices in respect of the project costs that are due."
In addition, the SABC has agreed to pay the company for costs involving subcontractors used by the consultancy for the work done. The SABC's Kganyago said on Friday they were unable to comment on the matter as they did not have all the facts at hand. He said they would be able to provide a detailed response tomorrow.
The latest revelation comes as the beleaguered institution's interim board cracks the whip on some of its top executives accused of financial irregularities.
The SABC started disciplinary hearings on Thursday against chief financial officer Robin Nicholson, group executive for content enterprises Mvuzo Mbebe, audience services head Anton Heunis and group procurement head Mabela Satekge.
The four are being questioned about alleged financial irregularities involving hundreds of millions of rands - claims that are yet to be tested in the disciplinary process.
The SABC interim board earlier this week dropped "a bombshell" to MPs by revealing that that they have, during their investigations, uncovered a sports-related contract worth close to R1 billion.
Board member Leslie Sedibe told the National Assembly's committee on communications that they were "heavily contesting" the contract because the price was too high.
On Friday Independent Newspapers reported that an internal audit report, compiled in June, allegedly fingered former senior manager for international acquisition Matilda Gaboo for passing business worth more than R40m to a man with whom she had an intimate relationship.
Between 2004 and 2008 Gaboo had bought a number of programmes, many of which were never used.
Finance Minister Pravin Gordhan has given the broadcaster R200m in his medium term budget, while Communications Minister Siphiwe Nyanda has proposed a tax levy to rescue the broadcaster.
- This article was originally published on page 5 of Tribune on November 08, 2009
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