How SPH Media scam investors and advertisers by cooking circulation.
Singapore’s government-owned and controlled print media has been plagued with a major scandal – cooking the books to inflate daily circulation. SPH Media Trust, the publisher which owns newspapers like The Straits Times, Berita Harian and Lianhe Zaobao, has admitted inflating circulation numbers to between 85,000 and 95,000 copies daily through various methods.
Apparently, the cheating was only discovered after an internal review was initiated shortly after SPH Media was spun off in December 2021 from mainboard-listed company Singapore Press Holdings (SPH) to become a so-called not-profit-entity – a company limited by guarantee (CLG). The transfer of the media business was to secure funding from public and private sources.
The proposal, first hatched in May 2021 and subsequently approved in September 2021 by shareholders of SPH, received the greenlight from the Ministry of Communications and Information (MCI) in February 2022 to inject up to S$180 million annually over the next five years. However, all hell broke loose after a review was carried out for the period from September 2020 to March 2022.
The review of internal process – started in March 2022 – saw inconsistencies in the reporting of data which included a full financial year from September 2020 to August 2021, in addition to two quarters (from September 2021 to November 2021). The discrepancy in circulations across all titles translates to 10% to 12% of the reported daily average copies.
The Singapore-based publisher SPH Media, which also prints The Business Times, Shin Min Daily News and Tamil Murasu, deployed tactics such as printing copies, counted for circulation only for them to be destroyed. There was also “double-counting” of subscriptions across multiple instances. A project account was injected with additional funding over a period of time to purchase fictitious circulation.
Certain circulation numbers were also “arbitrarily derived”, where circulation figures are an important benchmark for setting the price of advertising. Meaning not only the senior management of SPH had cheated investors (during which the company was still listed in the stock market), but also obviously had scammed advertisers into believing that they were paying for eyeballs that did not exist.
Essentially, fake accounts were used to buy subscriptions and lapsed contracts were counted in the circulation data to create a false perception of a healthy business with the intention to cheat and scam. The best part is the Singapore government (presumably) did not even know how long the practices have been going on when it agreed to splash a whopping S$900 million for the dubious deal.
While the review so far has found discrepancy of 10% to 12%, it’s unknown if the actual fraud could be worse if a complete audit and investigation are to be carried out. Based on the 2021 SPH annual report, the total circulation was 840,500 with the digital portion at 462,400 and print copies at 378,100. Already embarrassed, the government might want to close the scandal quickly.
The Straits Times claimed several senior employees of SPH Media have been taken to task or left the company after the damaging internal review. However, it did not provide their names or list the number of employees affected. It’s also unknown exactly what type of actions has been taken against the irresponsible employees – whether they were sacked or given a golden handshake.
Unless Prime Minister Lee Hsien Loong transparently reveals the punishments – even prosecutions – taken on those responsible, his government will be accused of covering up the scandal to prevent the humiliation from being politicized by the opposition. Worse, the administration could be accused of being the partner-in-crime of the scam to bail out the news media with public funds.
There were reports that three executives have left SPH Media and they were “all industry veterans with over 50 years of experience between them.” Interestingly, the culprits were allowed to leave the company around December 23, 2022 – suggesting that the government was not interested to prosecute them, therefore, might have known about the book cooking before it was exposed.
As the government appears to protect the identities of the SPH white-collar executives, the name of Eugene Wee, the Chief Customer Officer, pops up. Wee, previously the head of SPH Magazines, was appointed to the role in March 2021. He was tasked to oversee several audience-related divisions, including circulation, SPHRewards, and customer service. He is believed to have left.
In May 2021 in Parliament, Minister S Iswaran questioned dubious claims that the Straits Times’ print and digital circulation grew by about 20% when “SPH’s overall reach and readership has never been higher” as SPH papers’ total circulation only grew by 5% between 2017 and 2020. In 2020, the daily average circulation of the Straits Times on print and digital platforms was reportedly 458,200.
In Singapore, two business groups control all of the print and broadcast media – MediaCorp and Singapore Press Holdings (SPH). While MediaCorp is owned by a state investment company, SPH is supposedly privately owned. But to control the media, the government decides who run SPH. To inflate your figures when you’re the only player in the local newspaper business is absolutely pathetic.
Lee Hsien Yang, the estranged younger brother of PM Lee Hsien Loong, said in a Facebook post on January 11 – “The Government is probably the biggest advertiser (in SPH Media newspapers). So, the taxpayer has been paying more for ads besides funding the loss-making new entity? Will SPH reimburse advertisers who were overcharged? As a listed company, what financial reporting regulations were breached? How far back does this go?” – Finance Twitter