Universal Music Africa MD under fire, named in 1.2 Billion Naira royalties scam

 

Sipho Dlamini (Former SAMRO CEO and current MD, Universal Music Africa)

Managing Director of Universal Music Africa and Sub Saharan Africa – Sipho Dlamini is one of the 5 people who has been named in an on-going investigation regarding the mismanagement of funds belonging to members of the Southern African Music Rights Organization, SAMRO.

SAMRO is a body set up to collect broadcast royalties on behalf of South African composers, songwriters, music arrangers and publishers and in 2015, Sipho Dlamini was the society’s CEO who heralded the decision to set up a collection management organization in the middle east.

The propeller for the Arab Emirates Music Rights Organization mission was the forecast of the deal’s ability to rake in a possible profit of 25 Billion Naira upon the success of the deal, thereby boosting the economy of the society which had waned due to unpaid royalties.

Dipping into the estimated 7.5 Billion Naira paid out to SAMRO members yearly, the sum of 1.2 Billion Naira was budgeted for the UAE venture, out of which 751 Million Naira was to be paid out as salaries to Sipho Dlamini (Former SAMRO CEO), Bronwen Harty (former SAMRO chief operating officer) Gregory Zoghby (former SAMRO chief financial officer) and 2 Syrian associates identified as Mohamad Hamzeh Khalaf and Yaser Aljabal.

A deeper understanding, however, shows that the proposed deal was dead on arrival and was vehemently fought against by members of SAMRO. According to Fin 24, a 2015 report in the international Licensing Journal by Harriet Balloch and Rob Deans of law firm Clyde & Co shows that though the cost of obtaining a licence would be relatively inexpensive, meeting the requirements of the licence, including creating a massive database of rights holders, would circle around 4 Billion Naira.

While SAMRO’s annual report has it that the 5 directors of the now futile deal were paid salaries, the directors have varying sides to their stories.

An email from Sipho Dlamini strongly claims that none of the SAMRO Executives received any fee for their involvement in the Arab Emirate music rights organization project. It is also believed that during the 21-month period when the 751 Million Naira was spent on salaries, Sipho had ceased to be the Chief Executive Officer of SAMRO.

Bronwen Harty also retains that he never received a dime from anyone while working on the project but Gregory Zoghby has been said to have purposely kept mum about the issue.

As for the external Syrian directors, SAMRO paid them off with 205 Million Naira after AEMRO was denied permission to float by The International Confederation of Societies of Authors and Composers(Cisac).

But the unanswered question is: were the Syrians the only recipients of the said 751 Million Naira salary?

Further complicating the scandal is the relationship that Sipho Dlamini is alleged to have with the Syrians. Here’s how Fin 24 describes the connection.

While receiving his salary from Aemro, Khalaf had another full-time job at a company tied to Dlamini, Creative Kingdom, an international design and architecture firm responsible for landmarks in Sun City – among other things – with an office in Dubai. Dlamini was previously the vice-president at Creative Kingdom Records, a subsidiary of Creative Kingdom.

So far, Khalaf has refused to comment on the issue and Aljabal seems to be missing in action.

Financial audits have been concluded and in a released statement, the current SAMRO board believes that they were tricked into the Aemro project. Parts of the statement read:

‘The audit has shown that the board was not made fully aware of the potential risks involved in the initiative. There were numerous occasions on which the board was not fully briefed on AEMRO, or possibly even misled…

We are currently investigating a series of legal steps to recover the funds and, where possible, to take action against those involved. We are totally committed to ensuring this happens, to ensure accountability and responsibility…

We are particularly focused on determining how we can recover the money that was used for the AEMRO venture and to ensure that SAMRO members gain maximum benefit from their hard work. We have added additional financial controls and will use the lessons learnt from this project to introduce structural changes to the way management reports to the board, eliminating single points of failure and ensuring the integrity of information presented to the board.’

More insights will be reported as the case develops.

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