DJs in a spin over NYDA R20m spree

2013-06-16 10:00

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KPMG to conduct a forensic audit into the deal

The National Youth Development Agency (NYDA) has allegedly spent millions of rands of taxpayers’ money buying music equipment at inflated prices for up-and-coming DJs.

And the company they bought it from was Madlosi Entertainment – owned by Kaya FM station manager Greg Maloka and Kalawa Jazzme boss Oscar “Oskido” Mdlongwa.

Now NYDA chairperson Yershen Pillay has asked accounting firm KPMG to conduct a forensic audit into the deal, which saw his agency spend almost R20 million on music equipment for 90 amateurDJs and 90 wannabe music producers, as well as on branding and marketing their businesses. This translates to about R96 000 each.

The figures have sent shock waves through the music industry, with prominent DJs calling for law-enforcement agencies to probe the deal.

A top DJ, who spoke on condition of anonymity lest his music not receive any radio airplay, said they knew about the deal but could not speak up.

“We knew about it, but we just couldn’t complain publicly because Oskido works for Metro FM and Maloka is Kaya FM’s boss. We were afraid the two stations would stop playing our music,” he said.

The prices the NYDA paid for the equipment, he claimed, were hugely inflated.

“There is absolutely no need to spend so much, especially on people who are not even professionals yet. I produced hit songs for more than 10 years and my studio was not even worth R40 000.”

A prominent Joburg-based DJ and music producer, who also asked not to be named, said he bought a quality DJ set for about R15 000 and spent about R50 000 on equipment for his studio.

“Two Pioneer CDJ2s cost me R4 500 and a Pioneer mixer about R6 500.

“So what kind of equipment costs R96 000?”

But NYDA CEO Steven Ngobeni defended the deal, saying it was above board and that the prices were not inflated. He said the project was initiated by Madlosi to hone the technical skills of DJs and music producers.

“We gave the beneficiaries three different vouchers. We gave music producers R96 000 to buy and install studio equipment, R96 000 to buy a DJ set, and R30 000 to have their businesses marketed and branded. These amounts include their four months’ salaries,” he said.

Ngobeni said some of the beneficiaries had already started repaying their loans and legal action would be taken against those who failed to do so.

But Pillay said he commissioned an audit to check if the agency’s supply chain policies had been violated.

“We have asked KPMG ... to extend their scope to this project. The report will give us an opinion on whether there was any wrongdoing,” he said.

Pillay said that procedurally the transaction should have been approved by the board as the Madlosi directors could not be classified as youth as they were above the age of 35.

“Such a transaction should have been approved by the board as the agency only funds youth organisations between the age of 15 and 35. But there was no board prior to April 1,” he said.

Maloka defended the prices of the equipment, saying it was not all for start-ups. He said that the overall costs included funds for the youth.

Added to this was the supply of the professional equipment, on-site training by professional technical and production experts, assembling and installation of the equipment, as well as setting up and running of a call centre.

Maloka said in a bid to market the businesses of the beneficiaries, each of the 180 youth who were part of the programme, had received a corporate profile with banners, business cards, digital camera and a website.

Regarding the issue of age, Maloka said Madlosi was not a beneficiary of the programme, but a service provider.

“The 180 young people on the programme are beneficiaries. Our general understanding is that all programmes of the NYDA are subject to annual audits.”

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