Government's Response to SPH Media Trust's Inflated Circulation Numbers

Mr Shawn Huang Wei Zhong asked the Minister for Communications and Information with regard to the alleged inconsistencies in circulation data at SPH Media Trust (SMT) (a) what is the status of the internal investigation and when will the detailed findings be made public; (b) what are the immediate corrective actions taken; and (c) how will this affect the Government’s long-term commitment to SMT.

Mr Zhulkarnain Abdul Rahim asked the Minister for Communications and Information with regard to the overstated reporting of newspaper circulation data by SPH Media Trust (SMT) (a) what is the breakdown of discrepancy in circulation numbers for each of SMT’s publication titles; (b) what is the extent to which the vernacular language publications are affected; (c) whether there will be a fuller audit to cover the period of review prior to September 2020; and (d) how will the results of the audit and other investigations affect the Ministry’s committed funding of SMT in the future.

Mr Dennis Tan Lip Fong asked the Minister for Communications and Information (a) whether the Ministry will require SPH Media Trust (SMT) to disclose (i) the reasons why the inconsistencies in the daily circulation numbers of SMT's publications took a long time to be discovered and made public and (ii) what is being done to strengthen governance over such matters; and (b) how will these inconsistencies impact the Government's commitment to fund SMT.

Mr Chua Kheng Wee Louis asked the Minister for Communications and Information whether the Ministry has reviewed (i) the duration which SPH Media Trust conducted the practice of over-printing, double counting of circulation numbers and then destroying these copies (ii) the impact of such practice on digital circulation (iii) the effect of this practice on its financial statements and if it was deemed material, including when it was a listed company and (iv) the undertaking of regulatory actions against current or former employees and board directors for any breaches.

Mr Leong Mun Wai asked the Minister for Communications and Information (a) when was the Government first made aware that Singapore Press Holdings Limited had inflated its circulation numbers; (b) whether the circulation numbers cited in the Ministerial Statement on 10 May 2021 were accurate; (c) when did SPH Media Trust (SMT) provide the Government with its internal report; and (d) whether the Government will present SMT’s internal report and SPH Media Holdings Board’s audit committee’s report to Parliament for scrutiny.

Mr Leon Perera asked the Minister for Communications and Information in light of the inconsistencies in the daily circulation numbers of SPH Media Trust (SMT)'s publications, whether the Ministry will require SMT to disclose (i) the length of time for which circulation figures are falsified and (ii) if and when action had been planned to be taken by SMT and for public disclosure to be made had the news of the falsification not been released by an alternative media outlet.

Mr Gerald Giam Yean Song asked the Minister for Communications and Information (a) what was the source of the figures cited on 10 May 2021 in Parliament that SPH's newspapers' circulation had grown by 5% and The Straits Times’ circulation had grown by 20% from 2017 to 2020; (b) how much bearing did this data have on the Government’s decision to fund SPH Media Trust (SMT); and (c) whether the Minister still considers this data reliable in light of recent admissions by SMT.

Ms Mariam Jaafar asked the Minister for Communications and Information regarding the recent overstatement of SPH Media Trust (SMT)’s circulation numbers for its publications, whether the Ministry has reviewed the impact of SMT’s position with advertisers.

Mr Leong Mun Wai asked the Minister for Communications and Information (a) whether the inflation of circulation numbers has had any material impact on Singapore Press Holdings Limited’s or SPH Media Trust's financial metrics, such as gross revenue and gross profit; and (b) how will this affect the valuation of the company.

Ms He Ting Ru asked the Minister for Communications and Information what is the Ministry’s assessment of the impact of the falsification of past circulation figures by Singapore Press Holdings, including the timing and manner in which the news was made public, particularly on public confidence and the credibility of SPH Media Trust’s current products.

Mr Pritam Singh asked the Minister for Communications and Information (a) how does the Government determine the quantum of taxpayer subsidies allocated to SPH Media Trust each fiscal year; and (b) whether these subsidies are contingent on (i) qualitative and (ii) quantitative metrics and outcomes, respectively.

Ms Jessica Tan Soon Neo asked the Minister for Communications and Information what is the outcome of the Ministry’s review of its funding for SPH Media Trust (SMT), in light of the findings in SMT’s internal review of circulation numbers of its publications.

Mr Don Wee asked the Minister for Communications and Information whether the Government will adjust the grant given to SPH Media Trust (SMT) as the Government’s commitment to fund SMT is predicated on inflated circulation data.

Mr Edward Chia Bing Hui asked the Minister for Communications and Information (a) how will the Ministry review its formula to fund SPH Media Trust in light of the inconsistencies in circulation data; (b) to what extent will this review be shared publicly including the names of individuals who are found to have engaged in deceptive behaviours and the relevant follow-up actions taken.

Ms He Ting Ru asked the Minister for Communications and Information (a) whether individuals involved in initiating and perpetuating the inflated circulation figures in SPH Media Trust have been referred to the Police for further investigation; and (b) if so, how many have been referred to the Police for further investigation.

I will also address the related matters raised in the questions by Mr Darryl David,1 Mr Gerald Giam,2 Ms Hazel Poa and Dr Wan Rizal,3 which are scheduled for a subsequent Sitting. I invite Members to seek clarifications, if need be, at this Sitting.

Members have asked about the internal review of circulation numbers by SPH Media Trust (SMT). The following is what we have been told by SMT, all of which is on public record.

After the transfer of the media business from Singapore Press Holdings Limited (SPHL) to SMT in December 2021, SMT started a review to assess the data that it had taken over. This included circulation data.

SPHL’s previous annual reports set out circulation data. These were stated to be in accordance with rules established by the Audit Bureau of Media Consumption Singapore (ABC).

Over time, quantifying print circulation became less relevant and ABC ceased operations in Singapore in 2019.

As many other publishers have done, SMT decided to reassess the methodology for reporting circulation data so as to establish a new measurement framework and baseline. The circulation data they reviewed covered the period September 2020 to March 2022.

In its review, SMT found that circulation numbers in some months during the period under review were overstated by up to 90,000 average daily copies.

Sir, these events took place before SMT was formed, when the media business was under SPHL, a private listed company. However, this discrepancy has impacted SMT, including the newsrooms and journalists. SMT’s Board and management have decided to investigate the matter fully. They will have to rectify what needs to be rectified and be transparent about how they proceed.

From the Government’s perspective, we have three core interests in this matter: first, the usage of public funds; second, whether SMT’s findings on circulation affect the Government’s assessment of the need to provide funding support to SMT; and third, if we continue to assess that funding support is needed, whether the amount of funding should be revised.

Mr Speaker, I will discuss these three core interests in turn.

Parliament was informed in May 2021 that the Government supported the restructuring of SPHL’s media business into SMT. Subsequently, in February 2022, Parliament was informed of the funding that the Government was prepared to commit to support SMT’s capability development for five financial years, from FY2022.

Up to now, we have not disbursed any funds. Moreover, the Government did not have a funding relationship with SMT before FY2022. Therefore, the findings of SMT’s internal review of circulation data from September 2020 to March 2022 have no bearing on public funds.

Second, do the findings of SMT’s internal review affect the Government’s assessment of the need to provide funding support? This is what MCI’s own review sought to answer – and what Ms Jessica Tan, Mr Darryl David, Mr Don Wee, Mr Gerald Giam and others have asked about.

MCI’s review started after SMT shared its internal report with the Government on 9 January 2023. We re-examined our analysis of the media landscape in early 2021, when the decision was taken to support the restructuring of SPHL’s media business into SMT. We also reviewed our reasons for committing public funds to support SMT’s capability development.

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

I emphasise: this does not make it right for anyone to overstate circulation numbers. But it reaffirms the need for restructuring.

On the reasons to commit Government funds to support SMT, Members will recall that the Government had set these out on two occasions in Parliament. The first was through a Ministerial Statement in May 2021 by Minister Iswaran who was then Minister for Communications and Information. The second was in February 2022 when I responded to several Parliamentary Questions.

It is useful to remind ourselves of the key reasons laid out on both occasions.

The first reason is that our local news media is at a watershed. Structural changes, technological advances and the Internet have severely disrupted the media industry which traditionally relied on print advertising revenue.

But moving to digital poses its own set of challenges. Our local news media face intense competition for eyeballs online. Moreover, the cost of running professional newsrooms often outstrips the revenue from an online model. Although digital advertising revenue has increased, a large share of it goes to Big Tech companies like Google and Meta.

The second reason is that preserving local news media serves a larger, longer-term public interest. They give voice to the Singapore identity and Singaporean perspectives. They report world news for Singaporeans by Singaporeans. This is important given that the Internet has made it exceedingly easy for foreign news and content producers to reach and influence our domestic audiences.

In addition, there are the local vernacular news outlets, which are critical in preserving the voices of our multiracial communities. We must support them even though vernacular products are difficult to sustain financially, given their inherently smaller readership or viewership.

The third reason is that in a crowded information space where anyone and everyone can be a publisher, citizens must have sources which they can trust to be accurate and objective. We saw how important this was during the COVID-19 pandemic. Our mainstream media including SMT played crucial roles conveying accurate information in a timely fashion.

Based on an MCI survey, more than 70% of respondents accessed SMT’s digital content at least a few times a week in 2021, a jump of almost 30% since 2018. The Reuters Institute Digital News Report indicated that 77% of respondents expressed trust in The Straits Times in 2021, up from 70% in 2018.

The public has continued to choose and trust SMT’s products. We need to keep these products as viable propositions so our people can continue to benefit from the public good of quality journalism.

But staying in this game – and hopefully, getting ahead – requires deep investment in tech, infrastructure and capabilities. For example, The New York Times and German publishing giant Axel Springer have all run up hundreds of millions in investments to go digital. With the steep global decline of print media, the Government support to accelerate SMT’s transformation will give it a fighting chance in a highly competitive digital space.

Mr Speaker, these reasons for supporting SMT remain valid today. And this brings us to the third question: whether the findings of SMT’s review of the circulation numbers should affect the amount of funding committed.

Mr Speaker, in February 2022, I informed Parliament that the Government had assessed that it would provide up to $180 million of public funds annually to support SMT’s transformation for five years, starting from FY2022.

The funds would be used for technology development – for example, product development for the digital space, newsroom tools like content management resources and data analytics as well as IT infrastructure.

They would also be used for talent development – training journalists for the new operating environment, including equipping them with digital skills and multimedia capabilities.

The funds would be used also for the preservation of vernacular media – sustaining the vernacular newsrooms and developing new content formats like videos and podcasts to reach younger audiences.

I had also informed Parliament that in its initial years, we expect SMT to spend approximately 40% of the funding on tech investments and digital talent. The remainder will be spent on newsroom capability building and training, in particular, of the vernacular newsrooms.

As Members can see, in assessing the funding required for SMT’s transformation, circulation numbers were not a key consideration. The level of funding previously assessed for the purposes of investing in technology and capability development remain valid.

Let me now talk about ensuring accountability.

When Government funding is given, SMT will be held to account. Our focus is on readership and reach, which measure how many people consume the content; and not circulation, which is how many print and digital copies are sold or distributed.

Readership and reach are measured through surveys done by third parties. SPHL had previously commissioned surveys conducted by third-party research agencies such as GfK. MCI had also independently verified readership and reach using data sources outside of SPHL and SMT, including data collected by the Reuters Institute of Oxford University and our own News Consumption Surveys. We also have in place conditions and safeguards to ensure that public funding is used in an accountable and responsible manner.

I informed Parliament last year about the Key Performance Indicators (KPIs) we would be applying, including (a) total reach and engagement of SMT’s products, with a focus on their digital platforms; and (b) specific reach indicators for vernacular groups and youths.

The achievement of the KPIs will determine the amount of funding SMT receives. SMT’s KPI performance and financial statements must be audited by independent external auditors before submission to the Government. The Government can also conduct its own audits of SMT.

I further shared that SMT would be required to provide progress updates to MCI on a half-yearly basis. Specifically, funding will only be disbursed if SMT provides satisfactory regular updates on where and how funding has been utilised, and future business plans. The Government will also review the funding quantum during the mid-term and adjust KPIs and funding where necessary.

Mr Speaker, I have explained the Government’s key concerns with respect to SMT’s findings from its review of circulation data. Specifically, no public monies have been lost; there is no change to the decision to provide funding support to SMT; and there is no change to the amount of funding for SMT.

Let me now turn to other questions Members have raised.

Mr Leong Mun Wai asked if the Government had independently audited the financial statements and other data provided by SPHL as part of its due diligence process before making the decision to grant it public funding. The answer is yes. Our focus was on reach and readership, as I explained earlier.

Mr Gerald Giam and Mr Leong asked about the circulation figures cited by Minister Iswaran in May 2021. As the figures cited were for 2017 to 2020, a time outside the period of SMT’s review, we cannot conclude that they were inaccurate.

There were other questions about the details of SMT’s review, including (a) the duration and financial implications of the overstated circulation numbers; (b) the manner, timing and extent to which SMT discloses details of its review; and (c) police investigations.

The Members’ concerns are valid and these questions should be addressed to SMT. This includes the corporate culture Ms Hazel Poa asked about as well as SMT’s position with advertisers, as noted by Ms Mariam Jaafar.

SMT has its own corporate governance and executive team. Their CEO is accountable to their Board, which is in turn accountable to the members of the CLG. The Government cannot speak on behalf of SMT and it is premature for us to say more at this juncture. This is especially as the Board has tasked its Audit and Risk Committee to conduct further investigations into the circulation discrepancy.

The Government welcomes the Board’s resolve to examine the findings of its internal review and to put SMT on the right footing. MCI expects SMT to share the findings of its Audit and Risk Committee’s investigation with us.

SMT’s Board and management must also be mindful of their public duties, their responsibility to maintain the public’s trust in their newsrooms and journalists, and the need to discharge these responsibilities in a diligent and timely manner.

Thank you, Mr Speaker. I thank the Minister for reiterating the rationale as well as the position of the Ministry with regard to the funding on the question I asked. I understand that no funding has been released to SMT yet, but when will the first tranche for FY2022 be released in light of the current situation?

Mr Speaker, the funding agreement is close to being concluded. And once we are satisfied that the KPIs have been properly set as well as the safeguards that I had explained earlier have been properly included in the agreement, we will release the funding.

I thank the Minister for her reply. I note the Minister said in response to my question that the Government cannot confirm if the figures reported before the period of review in September 2020 are accurate, but can she confirm that the figure cited by Minister Iswaran were accurate? And secondly, was the inflation of circulation figures a long-standing practise that did not raise eyebrows until the new management came in?

Mr Speaker, we do not know. These questions that the Member posed may be better addressed after the Audit and Risk Committee completes its investigation and shares its findings with us. Until then, I would not speculate.

Thank you, Mr Speaker. I thank the Minister for the clarifications. I had asked about the vernacular languages and I am quite concerned about the hard work that our local journalists have put in. So, I am quite comforted by the fact that we are sticking by the decision because the principle and reason have not changed despite the issues.

What I would like to ask is this: in the event that the further audit or investigation findings reveal any exposure to whether be it criminal sanctions or civil liabilities to other third parties, what are the steps that the Ministry would take to ring-fence our future funding to SMT in order to make sure or ensure that the funding will be committed to the purposes that it has been given?

Mr Speaker, I thank the Member for his question. Until the Audit and Risk Committee completes its investigation and shares its findings with us, I will not pre-judge the outcome.

If there is any evidence of laws having been broken, it will be the obligation of SMT to refer the matter to the Police.

Even in those circumstances, we will have to look at what specifics have been revealed in order to assess the funding that the Government has committed to provide. There are safeguards in place and we will exercise them as necessary. But as it stands right now, our commitment to fund the capability development of SMT does not change. Our level of funding is also assessed to remain valid.

Thank you, Mr Speaker. My supplementary question is on my Parliamentary Question (PQ) in which I asked the effect of this practice on its financial statements and subsequently, the undertaking of regulatory actions against current and former employees, as well as the Board. The reason I ask is because circulation revenues will be impacted; that is the most direct one. And I think this is also something which happened during the time when SPH was a listed company and would be subject to the various market rules under the SGX, and this is obviously information which is relied on by advertisers as well as various capital market participants alike.

Mr Speaker, on the Member's question on financial impact, the answer is we do not know. And that is the reason why the SMT Board has decided to ask its Audit and Risk Committee to investigate the matter more fully. And until they have completed their work and shared their findings, I think everything else that we say is speculative.

Thank you, Speaker. In Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] I would like to ask the Minister even if newspaper circulation is not the primary concern here, what measures does the Ministry have to prevent such undesirable behaviours from happening again in future?

Mr Speaker, may I have your permission to reply in English, for the benefit of our colleagues?

The circulation numbers may not have been our key consideration in providing funding, but the overstatement of these numbers is not right. SMT's Board as well as its management are aware of it and they are the ones that want to put things right by convening a further review by their Audit and Risk Committee. Keep in mind that these discrepancies were uncovered as a result of an internal review that was initiated by the SMT management in the first place.

So, I think it is clear that the intent of the SMT Board as well as its management to put things on the right footing; and we should support them in this process.

One of the roles of a news media is to expose wrongdoing. In this case, we have SMT discovering its own wrongdoing but not breaking the news themselves. Did the Minister seek an explanation from SMT why they did not break the news themselves but instead waited for an online news media platform to break it; and then responded?

Mr Speaker, on a day-to-day basis, many things happen in an organisation and it is up to the management to decide if and how each particular event or incident ought to be communicated, both within the organisation and outside the organisation. Keep in mind that this review was initiated by SMT and they were still in process. In fact, they have decided that they need to investigate more fully and that is why they have asked their own Audit and Risk Committee to take on this work on an extended basis. Should the manner in which they had communicated been approached differently? I think that is a matter that SMT, the management and the Board, will have to consider.

Thank you, Mr Speaker. I note from the Minister's reply that the investigation is still pending. However, I just wanted to ask the Minister – the matter of trust in SMT that the Minister mentioned earlier is really important, so the question is whether has any trust been broken? What is the Ministry's assessment of whether the trust has been broken, the extent to which trust has been broken and whether or not there is going to be any steps taken in the interim to restore any public trust in the organisation?

After all, people might be thinking, if the organisation goes to such lengths to falsify circulation figures such as even pulping newspapers, would we still be able to trust the content as delivered by these organisations?

Mr Speaker, I would be careful about the terms that we use to describe SMT, its management or its actions. Until the Audit and Risk Committee completes its investigation and shares it findings, I will not pre-judge the outcome. I also made clear our expectations of SMT earlier in my reply to the Parliamentary Questions (PQs). The board will have to share the Audit and Risk Committee's findings with MCI after it has completed its investigation and rectify what needs to be rectified. What needs to be rectified, that is still not known yet.

The Board is accountable to the members of the Company Limited by Guarantee, but they also have a responsibility to let the public know how they intend to proceed. I think this responsibility is not lost on them. If there was any doubt that they did not take this matter seriously, I do not see why they would have convened another review by their own Audit and Risk Committee.

Mr Speaker, on Mr Leong's first set of questions, I would humbly and respectfully refer him to the Hansard for my full reply. I believe I had addressed why the Government's own review has led us to the conclusion that the reasons for funding SMT's capability development remain valid and also why the levels of funding that we have decided upon remain valid.

Just a quick recap, we are focused on technology development, talent development and the strengthening of the vernacular newsrooms. Should these be affected by the findings of the Audit and Risk Committee, at this stage, it is too early to say. I will not pre-judge.

On his second point, if the decisions that were taken earlier remain valid, why do you say that the due diligence was not done as it should?

Thank you, Mr Speaker. On the due diligence, what I said is that the due diligence should also cover circulation data. If the Ministry had not discovered that in its first due diligence, then we can say there is a certain amount of inadequate due diligence being done at first. This is my first point to the second question.

On my first question, I am not talking about the justification of whether the Government should spend the $900 million or not. I am saying that the Government may have the reasons to spend $900 million dollars, which you have explained. But what I am asking is, when the Government takes over the baby from SPH, should the Government not have asked for more money if the Government had known that the circulation data was falsified?

I thank the Member for his question. Perhaps, I would ask the Member – if the circulation data was in fact lower than what has been reported, would the compensation numbers received by SMT when the transfer took over, would that not be lower than they got? That actually goes against what you are trying to ask for.

In any case, I think the nub of what Mr Leong has suggested is this: somehow, there was an inadequacy in our due diligence. I go back to this point: in hindsight, you can always find elements that could have been done differently. But let us come back to our review and the conclusion of that review. The conclusion of that review is that the reasons for funding SMT remain valid and the level of funding that we have set aside will not change. If you go by the outcomes of the review, I think the process speaks for itself whatever it is that we have put in place prior to making the decision to fund SMT and then thereafter, deciding on the amount.

Mr Speaker, I believe my question about what is the total number of newspaper copies that were printed and counted and destroyed by SPH Media and its predecessor company; the total weight of the paper and what are the environmental impact of these actions – these were not answered just now by the Minister.

Mr Speaker, on the specifics of how many copies were involved and so on, I believe this is better addressed after the Audit and Risk Committee has completed its investigation. At this stage, we do not know. On environmental impact, MCI recognises its importance but we are not in a position to respond to it authoritatively.

Mr Speaker, I am afraid I cannot agree with Mr Leong on that. If something is worth less and I have to take over something that is worth less, surely I cannot be expected to be provided more compensation.

The one who defies financial logic is yourself, I am afraid, Mr Leong. But I leave it at this.

In any case, let us come back to the nub of the questions and the public interest in this. At the end of the day, we have to ask ourselves: is the amount that we have decided to fund SMT's capability development the right amount? Regardless of what has been provided to SMT by its predecessor, SPHL, those considerations that I outlined in my reply remain valid.