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

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

In a statement on Friday, the media company, which has come 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 some 10 to 12 per cent of daily circulation figures in some months had been overstated during the period audited - between September 2020 and March 2022.

Giving more details about the discrepancies for the first time since news on the matter broke, the company said that of particular concern was an overstatement of 49,000 average 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 average daily copies 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 19,000 average daily copies, which included a barter arrangement with another publisher, which SPH Media did not name.

SPH Media said the Audit and Risk committee will, apart from focusing investigations on the above issues, commission legal advisers to assist in the probe and report its findings directly to the SPH Media board.

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

In an e-mail to advertisers on January 10, SPH Media Group’s chief executive officer Teo Lay Lim had 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, which is 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.

She had also said that 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 how inflation would have affected the company or stakeholders such as advertisers and shareholders.

In Friday’s statement, SPH Media said that circulation data reported in previous annual reports - when the the company was known as Singapore Press Holdings and 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 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 such 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, which includes 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.”