SPH Media Group (SMG) filed a police report on Wednesday (Jun 21), following an investigation into overstated circulation figures.

This was in line with recommendations from legal advisers and the media group’s audit and risk committee.

The committee – chaired by former EY Singapore and Asean managing partner Max Loh – also recommended the media group evaluate its risk culture and continually improve its internal controls and processes.

In a briefing to SMG reporters on Wednesday, Loh said the police report was not made against specific persons or entities.

“It’s just a report that is premised on our findings to say that what we have seen potentially constitutes offences,” he said, adding that the investigation did show “inappropriate behaviour”.

“We’ve laid out what the issues or the findings are, and we really have to leave it to the relevant authorities – in this case the police – to figure out how they are going to proceed, and if at all they want to proceed,” he said.

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The committee was tasked in January to audit the media group’s circulation numbers, after an internal review found circulation numbers for some publications were overstated by 85,000 to 95,000 daily average copies.

Law firm Allen & Gledhill (A&G) and audit firm Deloitte were appointed to assist in the investigations.

SMG’s publications include The Straits Times, Lianhe Zaobao and The Business Times.

A summary of the committee’s findings – with individual names and potential offences redacted – was made public on Wednesday.

Among other things, the investigation found an overstatement of circulation numbers by approximately 82,600 average daily copies – around 10 per cent of total circulation – for the month of August 2021.

Most of this came from bulk copies paid for from the Newspapers in Education (NIE) fund. Some 49,000 average daily copies were paid for by the fund at a heavily discounted rate, but were not distributed.

The report noted that copies cannot be counted under the Audit Bureau of Circulation rules if they are returned, unsold or undelivered. This meant that submissions to the Infocomm Media Development Authority and in Singapore Press Holdings’ (SPH) annual reports for FY2020 and FY2021 were inflated.

The committee said at least some of these NIE bulk copies appear to have been used to shore up the circulation numbers in the annual reports of then listed SPH, and to meet key performance targets for the circulation division.

The number of NIE bulk copies would usually be highest in the month of August – SPH’s financial year end – as circulation numbers from that month would be used in the annual report.

According to the report, more digital NIE bulk copies were added in recent years – as these cost less than print copies – to cushion the fall in print circulation numbers, and to maintain circulation numbers.

The aggregate amount charged from the NIE fund for bulk copies during the review period of September 2020 to March 2022 was S$748,000.

The existence of the fund and the use of the fund to purchase bulk copies were “within the knowledge” of senior management of the listed company.

The report also flagged a “questionable” barter deal – involving 10,000 ST and 5,000 BT digital subscriptions – that added to circulation figures, but in which there seemed to be no “genuine intention to execute the arrangement”.

While the deal affected revenue and expenses, there was no impact to the profit and loss for the group. The accounting impact was not deemed material to the group’s full-year financial statements.

A Singapore Exchange group spokesperson told BT it would not be commenting on the matter as a police report has been filed. “We will continue to monitor developments,” the spokesperson added.

The report also noted “no evidence” of the involvement of the journalism and editorial departments in the overstatement of circulation numbers.

The Ministry of Communications and Information said it was studying the findings and working with SPH Media to understand the details. “We will share our views in due course.”

In February, the government said it would continue to provide up to S$180 million annually to support the transformation of the not-for-profit media entity for five years starting from FY2022. The latter’s review of circulation numbers reinforced the government’s assessment that the media landscape has become highly unfavourable for news organisations. 

In response to queries from BT, former SPH chief executive Ng Yat Chung said: “I note with regret and disappointment that certain individuals in the SPH Media circulation department appeared to have misconducted themselves in relation to circulation numbers during the period of review by the (audit and risk committee).”

“The report also noted that neither the board nor senior management during the relevant period was aware of the alleged misconduct,” he added. “I wish SPH Media Trust every success going forward.”