(Bloomberg) -- Naspers Ltd. is being probed by a U.S. law firm over whether Africa’s biggest company by market value was involved in unlawful business practices related to a contract with South Africa’s politically connected Gupta family.
Pomerantz LLP is investigating claims on behalf of investors after Naspers’s TV unit MultiChoice started its own probe into the contract with ANN7, a 24-hour news channel formerly owned by the Guptas. Reports in South African media have alleged that MultiChoice had a corrupt relationship with ANN7, which the family sold earlier this year.
“The investigation concerns whether Naspers and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices,” Pomerantz said in a statement Tuesday.
Naspers investors should contact the firm if they are concerned, Pomerantz said, without saying who had commissioned the company to start an investigation. A phone call to the firm’s New York office wasn’t answered out of business hours.
The probe asks further questions about the involvement of Cape Town-based Naspers in the scandal surrounding the Guptas, who are accused of using their friendship with South African President Jacob Zuma to win lucrative state contracts. U.S. consultancy McKinsey & Co. and auditor KPMG LLP are among international companies to have found that work done for the family had breached corporate governance standards. The Guptas and Zuma deny any wrongdoing.
The News24 website, which is also owned by Naspers, reported last month that MultiChoice increased its annual payment to ANN7 to 141 million rand ($10 million) from 50 million rand, citing leaked emails. MultiChoice, Africa’s biggest pay-TV provider, started its own investigation as its reputation had been damaged by the allegations, it said Dec. 1.
Naspers shares fell 4.1 percent to 3,480 rand as of 2:03 p.m. in Johannesburg, the lowest in more than a month. The stock declined 4.2 percent on Friday, when MultiChoice announced its investigation. The company owns a wide range of media and internet assets around the world, including a 33 percent stake in Chinese giant Tencent Holdings Ltd.
A spokeswoman for Naspers couldn’t immediately comment when contacted by phone.
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