Dear Stakeholders,

 

I am writing to provide an update with regard to Hummingbird Group and Pollen TV’s current cash flow challenges and the on-going smear campaign which is playing out in the media. 

 

In the interest of transparency, I have shared my formal response to Screen Africa’s questions below, some of which made it into an article they issued today, but most of which were not covered in the type of detail needed to tell the whole story. 

 

Unfortunately, despite my best efforts to manage the challenges, parties involved in the smear campaign continue to use the press as a vehicle for drip feeding selected information on a deeply complicated situation, with many moving parts. 

 

I would like to categorically state that we are not being investigated by the DTI, SARS, MICT SETA or other parties. We are an audited company and have had clean audits to date. 

 

However, there are delayed payments and persistent cash flow challenges. I am working day and night to try alleviate the challenges. Unfortunately untrue and defamatory allegations in the media keep creating setbacks to positive steps to resolve the matter. 

 

It is with a heavy heart that I write you this note today; as someone who has – and continues to – invest significant time, effort and money in the South African film and television industry; and who has a firm belief in its potential on the continent. 

 

I regret that I have had to bring this unsavoury matter to your attention as I am fully aware of the impact that even untrue and unsubstantiated allegations have on the relationship of trust we have with you.

 

My efforts are centred on trying to resolve all challenges. Should you wish for any clarification please don’t hesitate to give me a call.

 

Yours faithfully, 

 

Bridget Scarr

Managing Director

 

 

FULL STATEMENT BELOW:

 

HUMMINGBIRD GROUP

MEDIA RESPONSE: SCREEN AFRICA

3 November 2015

 

Thank you for your query. Please find below the answers to some of the questions you have posed. Please also note however that we cannot respond on MICT SETA questions in isolation of MICT SETA, due to contracts in place with the organisations, and we have penned a response pending their approval. We will provide feedback from both organisations on your MICT SETA query.

As a proviso, it is important to note here that the Hummingbird Group and Pollen TV is currently under attack by disgruntled former employees, who are conducting a baseless and malicious smear campaign against the organisation, and me, as its Managing Director.  Some of our clients, service providers and the media are also being sent untrue, defamatory information and emails, in what we believe is an effort to cause malicious damage to the company; jeopardising it and our ability to finalise payments.

Our attorneys and the appropriate authorities are presently dealing with these issues. I have the best interests of the organisation and the industry at heart – to this end we are pursuing a legal route and the investigation into this matter is ongoing, and will take its course. There are many moving parts to this matter and some serious legal complexities – which make it difficult to fight in the media, which the perpetrators of the smear campaign seem to be doing to further their own ends, instrumentalising the press. We prefer to remain professional and are committed to moving forward and resolving all outstanding matters. Please contact us if you have any further queries or need clarification.

 

 

1. What is your background in the industry?

 

Bridget built Pollen TV from a small start-up, to a company that at certain points employed up to 200 people, running multiple productions, considered one of the top creative services agencies in South Africa.

Essentially, Bridget is respected, innovative and dedicated media entrepreneur. Prior to founding Pollen, Bridget garnered production and management experience working at advertising agencies, production & post production companies like Ogilvy, Brand Activation and Bite Animation to name a few.

 

 

2. What agreement was in place with regards to Pollen facilitating the Afriantics programme and why was this programme never completed?

 

The Afriantics program is the first of its kind in Africa and the production is complex and extensive. Many agreements were in place. It is difficult to guess which one you are referring to.

Pollen TV rendered services to the official production entity, Brave Creative Media, which is headed up by Matsobane Lebelo. The production is currently in its final stage and is expected to be finished by the end of the year.

 

 

3. Why is there MICT SETA bursary funding owed by Pollen to AFDA students?

 

Pollen TV has several contracts with MICT SETA and has worked with SETA excellently over the past 5 years without any incident.

Pollen is still expecting payments from SETA as part of the current contracts. Currently, there are two active contracts in place with SETA and neither one has been completed to date. For outstanding payments to AFDA there is a payment plan in place, which was agreed upon by both parties.

We believe that the MICT SETA programmes are highly beneficial for the greater industry.

 

 

4. Is it true that Pollen has not paid tax on behalf of its employees? What is the reason for this?

 

Due to the cash-flow issues that the business is experiencing there is an agreed to payment plan in place with SARS. There are no complaints from or issues with SARS. All tax due for all Pollen employees has been paid.

For two of the productions (which, among others, Pollen has been servicing, as production service provider) there were some paperwork delays and, these productions did not start the tax registration process when expected. The registration is still in process with SARS.

As a result, the SPVs (Special Purpose Vehicles for the production) have not been able to pay taxes as there is no active registration, and thus no tax notice yet.

Ultimately, this has also lead to some people involved in the productions not receiving their IRP5s as of yet. As soon as the registration is fully processed, the tax notice issued, the tax can be paid by the SPVs and the IRP5’s can be issued. This process is underway and should be resolved.

 

 

5. What steps are you taking to rectify salaries outstanding to employees and those who have loaned Pollen money?

 

Since the first signs of the cash-flow constraints became apparent we have almost exclusively focussed on alleviating these and to keep the impact on the business and thus everyone involved (employees, suppliers, partners, etc.) contained and minimized.

In this process we have approached every financial institution and organisation in South Africa and internationally to ask for assistance. In the past 8 months we have spoken to more than 400 people at banks, investment firms, lending firms, and funds. The challenge is that the South African media industry has very little industry support beyond the DTI, for example.

The financing we had secured from overseas companies was ultimately denied by the South African Reserve Bank, which had issue with the high foreign loan interest. A large equity deal did not come off when the investor recused themselves from the transaction after several government policy changes became public earlier this year.

Since then we leveraged support from friends, family, and other amazing media entrepreneurs who understand the media business and the difficulty of obtaining consistent and timeous finance in South Africa. All funds have gone into payroll and supplier payments; and the management of cash flow.

 

 

6. Taking into consideration the financial and cash flow constraints faced by Pollen, why still incur the costs of attending MIPCOM?

 

MIPCOM is a critical sales market for selling content. Since we are in the content business, we need to attend sales events which secure distribution deals. This is a fundamental part of the TV and film industry. Going to MIPCOM is essential to close new sales which ultimately result in revenue for the business.

The trip was sponsored by one of our investment partners that believes in us and what we do. There was no additional financial burden on the company because of the MIPCOM visit.

We are pursuing new sales as a method to inject money into the company to limit the impact of cash flow challenge.

Pollen TV is alive and, with the measures we are taking, we expect the cash-flow issues to be resolved soon.

 

 

7. If you could go back in time, would you do anything differently?

Yes.

 

Unfortunately, there were people at the highest level in the company who promised far more than they could deliver, which became obvious earlier this year. The high costs of doing business in the film and TV industry mean that over promising can equate to under delivery – and is the reason we are in the current cash flow crisis. Knowing what I now know I would have never allowed these employees to join the team and put a highly successful and credible company eight year old at risk, including all its employees.

That being said, we are confident that our past and present work speaks for itself and that the matter will be resolved.

 

 

8. How has the reaction/ outcry from ex-employees made you feel? Do you take any responsibility for their grievances?

 

What has happened is more than unfortunate. But it is not uncommon. Many South African businesses, especially SMME’s in South Africa, struggle with cash flow – mainly as a result of delayed payments.  

I feel deeply for anyone who is adversely affected by this – we have all been affected. I am so grateful to all team members who are still going strong with us, our suppliers who are so graciously carrying us, and all creditors who are remaining patient and supportive. We want to reiterate to them that all due diligence and effort is being put in to right the ship.

I am dedicating all my power and energy to rectifying the situation. Matsobane Lebelo also seems to be committed to make sure that the impact on the team is as small as possible and I am thankful for that.

All other directors of the business have left. They are currently pursuing their own path and I wish them well.

 

 

ENDS.

 

For more information, please contact:

Bridget Scarr

Managing Director

bridget@pollen.tv

bridget@hummingbirdgroup.net

 

______________________________________________________________________________

NOTE TO THE EDITOR: ABOUT HUMMINGBIRD GROUP

 

Hummingbird Media Investments, trading as the Hummingbird Group, focuses on investments in film, television, and entertainment. Hummingbird currently consists of 5 companies. Pollen and Hey!Fever provide a range of creative content and production services. Apiary focuses on the opportunities from digital content. Hive and Brave develop unique IP (intellectual property) strong brand driven content which can live across platforms.  The Hummingbird Group provides management and support at every step of the content creation pipeline, from creative development through to financing and financial engineering to physical production. With an eye on training & enterprise development, the group fosters innovation and social change in specialist creative media companies.