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SPH Media tasks audit committee to look more fully into overstated circulation data

SPH Media tasks audit committee to look more fully into overstated circulation data

Source: Straits Times
Article Date: 21 Jan 2023
Author: Tham Yuen-C

Seven employees were taken to task over the matter in December. Four of them have left the company, while the other three were served warning letters.

SPH Media’s board has asked its audit and risk committee to further investigate overstated circulation numbers that were discovered in an audit in 2022, and consider what further steps should be taken.

In a statement on Friday, the media company, which came under public criticism after announcing the discovery on Jan 9, said its board’s audit and risk committee will focus investigations on the preliminary findings that circulation figures had been overstated by up to an average of 90,000 daily copies in some months.

The committee will also commission legal advisers to assist in the probe, and report its findings directly to the SPH Media board.

SPH Media had, in March 2022, initiated a review to assess data that it had taken over from its predecessor Singapore Press Holdings Limited (SPHL), which had transferred its media business to SPH Media Trust, a new company limited by guarantee.

The review covered the period between September 2020 and March 2022, which included a full financial year of SPHL from September 2020 to August 2021. An independent Big Four advisory firm, one of the four largest professional services companies, was commissioned to assist in the review, which found the inconsistencies in circulation data.

Giving more details about the discrepancies for the first time since news on the matter broke, SPH Media said that of particular concern was an overstatement of an average of 49,000 daily copies – or 5 per cent of total daily circulation then – of news titles, which include The Straits Times.

This figure had been recorded as circulation numbers, although the copies were never distributed. The majority were digital copies.

Another 5,000 daily copies on average continued to be recorded in circulation numbers after contracts had lapsed, while 17,000 copies on average were recorded as a result of a failure to check that reported numbers were accurate against actual usage tracked in the system.

There was also a possible discrepancy of an average of 19,000 daily copies, which included a barter arrangement with another publisher, which SPH Media did not name.

The committee is chaired by former managing partner of EY Asean & Singapore Max Loh, and comprises Allen & Gledhill co-head of mergers and acquisitions Lim Mei and HSBC Singapore’s vice-chairman of global banking for South-east Asia Philip Lee.

News of the overstated circulation numbers broke after several senior employees of SPH Media left the company in December 2022, following the internal audit.

In its statement on Friday, the company said a total of seven employees had been taken to task over the matter at the end of December. As a result, four of them have left the company. The other three were served warning letters.

Since the over-reported numbers were uncovered, some advertisers have said publicly that they had contacted the company over the matter.

In an e-mail to advertisers on Jan 10, SPH Media Group’s chief executive Teo Lay Lim said that circulation data is not used as a basis for the company’s advertising packages. Instead, media rates and advertising packages are based on reach and readership, an estimate of how many readers a publication has.

This data on reach and readership is collected periodically via a survey panel that is statistically representative of the Singapore population, Ms Teo had said.

Circulation data is a count of how many copies of a publication are distributed, such as through regular subscriptions or off-the-shelf purchase.

The company did not clarify what circulation numbers are used for and the impact the overstated figures could have had. The discovery had also sparked questions about how long the practices that led to inconsistent data had gone on for, and why they had not been discovered or announced earlier.

In Friday’s statement, SPH Media said that circulation data reported in previous annual reports – when its predecessor company Singapore Press Holdings was still listed on the Singapore Exchange – was stated to be in accordance with the rules set by the Audit Bureau of Media Consumption Singapore. This entity ceased operations in Singapore in 2019, as digital and media advertising grew and quantifying print circulation became less relevant.

“To obtain data on reach and readership, SPHL commissioned surveys conducted by independent third-party research agencies such as GfK,” said SPH Media.

It added that in the light of the changing media environment, the company is reassessing the methodology for the reporting of circulation data to establish a new framework and baseline to measure its performance, something publishers elsewhere have done as circumstances have changed.

SPH Media said: “SMT is committed to upholding integrity in every part of our business.”

The company outlined three measures it will take to ensure data accuracy and accountability. 

One, it will strengthen the separation of duties among staff, with enhanced checks and balances. For example, it will ensure that staff who are reporting circulation numbers do not have the access rights to create or change entries in the customer database. 

Two, it will ensure more frequent internal audit reviews so that reporting is done based on established methodology and verified to be accurate.

Three, it will enhance data quality and improve the accuracy of customer details. This will include data cleansing and independent validation of data.

“In addition to reassessing the methodology for the reporting of circulation numbers, SMT is pressing on with other transformation efforts,” the company added.

“SMT is focused on updating its policies and practices to ensure accountability. SMT remains steadfast in its mission to deliver quality journalism.”  

In an e-mail to SPH Media employees on the matter on Friday, Ms Teo noted that this had been a particularly trying time for the company, and thanked them for continuing to play their part.

She added: “My leadership team and I continue to be fully committed to building a better and stronger SPH Media for the future, so that this can be a place where you thrive, grow, and do your best work.”

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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