NCN didn’t bill PPP/C for millions owed for political ads, audit finds

-CEO wrote off debts owed by former gov’t’s supporters

The PPP/C has benefitted from over $55.2 million in advertising from the state-owned  broadcaster National Communications Network (NCN) that it was either not billed for or had not paid for up to May, 2015.

A forensic audit report of NCN, released yesterday on the Ministry of Finance website, revealed that in 2011, the then ruling PPP/C was not invoiced for $18.2 million in advertisements aired by NCN, while in 2015, the party was similarly not billed for $3.7 million in ads for a total of $21.9 million. Some $12.9 million of the sum for 2011 was recorded under the guise of being Public Service Announcements.

Further, the report revealed that at the end of May last year, the PPP/C owed $33.3 million to NCN for ads. Of this sum, $17.3 million was owed by Impressions, which represents campaign ads placed for the PPP/C for the 2011 Regional and General Elections, while the PPP/C itself owed $9.5 million for campaign ads placed for the May 2015 Regional and General Elections. Additionally, it owed NCN $6.3 million since 2008.

ncntable_Page_1In all instances, the auditor, Parmesar Chartered Accountants, reported that there is no evidence that NCN made efforts to recover the debts. The report covered the period November 11, 2011 to May 31, 2015 and it is not clear if the PPP/C has since moved to pay the debts.

APNU+AFC was also not invoiced for $65,500 in ads for 2011 and 2015.

The report revealed that NCN’s top 20 customers owed the broadcaster $102.6 million as at 31st May, 2015, with total receivables at a whopping $230 million.

“Systems should be implemented to ensure that all advertisements aired by NCN are invoiced to customers,” the report recommended. It urged the company to establish a debt collection committee with specific responsibility to collect all outstanding debts within six months.

Write offs

As it relates to the debt from Impressions, the report said that the then NCN Chief Executive Officer Molly Hassan had the sums written off. It said that there is no evidence that NCN made efforts to recover this debt and while the Finance Manager advised that letters were sent by the Debt Recovery Department on November 10th, 2011, December 13th, 2011 and November 29th, 2013, actual copies of these letters were not available for examination.

“There is no evidence that legal action was initiated to recover this debt from the customer,” the report pointed out. It said on April 16th, 2015, Hassan wrote a memo to the Board of Directors to have the amount written off as uncollectable as per section 6 of the Limitation Act. However, there is no evidence that Hassan sought legal advice from the company’s lawyer, Jaya Manickchand, the report said.

“It should be noted that NCN usually makes payments for services provided by Impressions. No effort was made to off-set payment for such services against amounts due from Impressions,” the report added.

Kashif and Shangai and Hits and Jams Entertainment, known supporters of the PPP/C, were also beneficiaries of the benevolence of NCN’s former CEO. Kashif and Shangai owed NCN over $2 million, which included amounts brought forward from 2010. Legal action was taken and the court ruled in NCN’s favour. However, Hassan wrote to Manickchand stating that the Board of Directors decided not to enforce judgement, the report revealed.

In relation to the $7.9 million owed by Hits and Jams Entertainment, Hassan wrote similarly to Manickchand, despite a court ruling in favour of NCN.

NCN is pursuing other entities in court to recover monies owed.

The report made a number of recommendations including that NCN enforce all judgments received from the court and establish definitive credit policy, which should be documented and approved by the Board of Directors. It urged that this credit policy be enforced.

 

 

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