SPH Media's inflated circulation saga has no impact on Govt funding support: Josephine Teo

SINGAPORE — The finding that the circulation figures of SPH Media newspapers had been inflated reaffirms the need for the company to undergo restructuring, Minister for Communications and Information Josephine Teo said in Parliament on Monday (Feb 6).  

In a speech she gave in response to over 17 parliamentary questions that had been filed by various Members of Parliament, she also said that the Government will not change the amount of funding it plans to inject into SPH Media Trust, as circulation numbers were not a key consideration in its assessment of how much funding the company needed.

The Government announced in February 2022 that it would be funding SPH Media by up to S$180 million a year for the next five years to make investments in areas such as growing its reach, user experience and newsroom technology.

On Monday, Mrs Teo said the level of funding previously assessed for these purposes of investing in technology and capability development remain valid.

"(SPH Media's) internal review of circulation numbers reinforced our assessment that the media landscape had become highly unfavourable for news organisations, even if they had substantial reach and were trusted by the public," she added.

"In particular, demand for print and digital subscriptions had weakened because news had become freely available. This is why circulation had come under pressure."

This does not make it right for anyone to overstate circulation numbers, but it reaffirms the need for restructuring, Mrs Teo said.

"Specifically, no public monies have been lost; there is no change to the decision to provide funding support to (SPH Media) and there is no change to the amount of funding for (SPH Media)," she said.

She also reiterated the Government's reasons for providing funding to SPH Media.

These include the need to provide information sources which Singaporeans can trust to be accurate and objective in a crowded information space. Preserving local news media also serves a larger, long-term public interest as they give voice to the Singapore identity and perspectives.

WHY IT MATTERS 

The revelations about SPH Media's circulation numbers have led to many questions being raised about the use of public funds to support it, given that the firm is set to receive up to S$900 million in government funding over the next five years. 

This was reflected in the many parliamentary questions filed by MPs for Monday's sitting, many of whom asked whether the Government would adjust its funding plans for SMT in light of this incident. 

The issue has also raised questions about corporate governance at SPH Limited, the company that used to own the SPH media business before the formation of SPH Media, and which was listed on the Singapore Exchange. 

Several MPs asked whether its inflated circulation figures had affected its reported earnings and valuation while it was a listed company.

WHAT MPS ASKED ABOUT AND HOW THE GOVT RESPONDED 

1. On the findings of the investigation and actions to be taken thereafter

Several MPs asked for an update on SPH Media's internal investigation and asked what corrective actions would be taken against the firm. 

Others also asked whether the findings of the investigation would affect government funding for SPH Media, and how.

To these questions, Mrs Teo replied that the investigation is still ongoing and its outcome should not be pre-judged.

But if the probe discovers evidence of laws having been broken, SPH Media must refer the matter to the police, she added.

She also made the point that there is no change to the decision to provide governnment funding to SPH Media and no change to the amount of funding. 

This is because the Government's focus in providing funding is on readership and reach, which measure how many people consume the content, and not circulation, she said.

2. On stock market rules

A few MPs, including Workers' Party MP Louis Chua from Sengkang Group Representation Constituency (GRC), raised the point that SPH Limited was still a publicly listed company during a period of time when the circulation numbers were inflated.

They asked whether the inflation of the data affected SPH Limited's reported earnings and valuation, and asked what actions would be taken against the company or its directors if so.

Mrs Teo responded that such questions can only be answered after SPH Media’s audit and risk committee has completed its review.

3. On how to mend public trust

The issue of public trust was also raised by Workers' Party MP He Ting Ru (Sengkang GRC), who asked whether trust in SPH Media had been broken by this incident, and what the firm should do to restore it. 

Mrs Teo said that SPH Media's board has a responsibility in letting the public know how it intends to proceed after the review is complete, and that this responsibility is “not lost on them”.

Similarly, Non-Constituency Member of Parliament (NCMP) Hazel Poa from the Progress Singapore Party asked why SPH Media did not break the news of inflated circulation numbers themselves. Mrs Teo replied that it is up to the management of SPH Media to decide if and how an incident ought to be communicated within and outside the organisation.

THE BACKGROUND

Last month, SPH Media, a not-for-profit firm that owns national dailies The Straits Times and Lianhe Zaobao, said that circulation numbers of its titles were found to have been overstated by between 10 and 12 per cent during an internal review from September 2020 to March 2022.

SPH Media said that its audit and risk committee has been tasked to investigate these points and "consider what further steps, if any, need to be taken".

It has also commissioned legal advisers to assist in the investigation and report its findings directly to the board of SPH Media Holdings.

The Ministry of Communications and Information (MCI) then started its own review of SPH Media, after the company had shared its internal report with the Government on Jan 9.

In response to TODAY's queries, MCI said that it has completed its review on whether the inconsistent circulation data affects the decision to fund SPH Media, with the findings set out by Mrs Teo in Parliament.
 

CORRECTION: In an earlier version of the article, a reply by Mrs Teo was wrongly attributed to a question by Chua Chu Kang GRC MP Don Wee. The reply was in response to a question by NCMP Hazel Poa. We are sorry for the error.