New Report Details Singapore Newspapers’ Circulation Fraud

But report names no names of responsible companies or individuals

By: Andy Wong Ming Jun

Singapore’s government-controlled Singapore Press Holdings, which publishes the city-state’s most influential news publications including the Straits Times broadsheet, established a charity fund named “Newspaper In Education” to buy up unsold printed newspaper copies to artificially inflate its circulation figures, according to a report released this week by the firm’s internal Audit and Risk Committee.

The committee’s report, which is frustratingly short of names of offending individuals and participating firms, also notes SPH used the charity to sign up for paid subscriptions to online versions of the papers, which were labeled “booster copies” internally by SPH circulation staff, and approved by a senior management figure whose name was redacted in the publicly-released report. The entire operation centered around the unsold newspapers was codenamed “Avatar.”

SMT filed a police report on June 21, five days after the audit report was released internally and a day after its open publication. Considering the multiple instances of alleged fraud, manipulation of key accounting numbers and potential misappropriation of monies covering the final time period of SPH as a publicly-listed trading company, it remains to be seen if the Singapore Stock Exchange or the Singapore Police’s Commercial Affairs Department will step in to investigate and press criminal charges on any relevant individuals involved.

Established in 1845, the 178-year-old Straits Times is one of the oldest English-language newspapers in Asia. While it has delivered relatively solid coverage of Southeast Asia, it has remained firmly under the government’s thumb in its domestic coverage, rarely straying from the government’s position on any issue. As with most print publications, it has struggled for years in the face of readers’ expanding access to other media in the effort to maintain its circulation, which is keyed to advertising rates and thus to revenue. Artificially inflated circulation means the newspapers have defrauded advertisers by charging them inflated rates.

In December 2021, SPH was restructured to become SPH Media Trust in response to shareholder pressures and transferred its media business into a government-funded nonprofit organization with a cash injection of S$900 million (US$667.5 million) over five years.

The report released earlier this week confirmed news which broke in January that daily circulation numbers of various mainstream Singaporean broadsheet titles also including The Business Times and various other non-English language newspapers had been artificially inflated by 85,000 to 95,000 copies within a 19-month period and represented some 10 to 12 percent of SMT’s reported daily average circulation.

Some of the findings are said to fall firmly within fraudulent territory, and the overall impression of the report paints senior management within SMT and its predecessor SPH in an unfavorable light of willful ignorance at best and outright collusion at worst.

A significant portion of the newspapers’ circulation numbers is made up of subscriptions from government ministries, statutory boards, and related organizations. When local schools under the Ministry of Education reduced their subscription numbers of SPH-printed newspapers, the unnamed senior management figure gave instructions for the SPH circulation team to continue printing pre-reduced numbers of newspapers originally ordered by the schools and bankroll the subsequent revenue gap with the “Avatar” operation.

The company also allegedly arranged for the unwanted extra newspaper copies to be sent directly to SPH’s print warehouse to be incinerated or recycled.

Further key findings show a barter deal with an unnamed entity known as “X” resulted in SPH paying administrative fees that were not commensurate with prior contracts of a similar nature, but also with SPH never distributing any material theoretically obtained through barter exchange with X using its own newspapers.

A royalty deal with another entity labeled as “Y” for its exclusive printing and distribution of 5,000 daily copies of the Straits Times between 2013 to the end of March 2022 prematurely ended in February 2021. Despite that, the “Y” entity continued to be charged a nominal sum of money by SPH to allow the 5,000 daily copies to continue appearing in SPH’s circulation numbers. The report leaves undetermined where this sum of money went between February 2021 to March 2022.

Disturbingly, certain subscribers who initially signed up for print and digital subscriptions were allegedly made to continue paying full price even after canceling their print subscriptions according to the report. SPH continued to double-count their circulation numbers and the money collected for the cancelled-orders printed newspapers went unaccounted for.

Digital copies of SPH-printed newspapers were also described as being overcounted beyond actual subscription numbers in the case of digitally provided airline copies or even double-counted in the case of digital copies sold to external agencies. The official excuse given at least in the latter double-counting scenario was “constraints in the digital sales system.”

In all cases, there were no indications that SPH’s management team had any inkling of the inflated circulation count or any attempts to mitigate and rectify these mistakes, a common observation throughout the report – that SPH’s collective senior management team did not know about the fraudulently inflated circulation, and hence did not do anything to stop it.

Much of the blame surrounding SMT’s publicly-traded predecessor company SPH has been laid on the circulation team as well as the redacted senior management figure who greenlighted the usage of an internal charity fund as a slush fund under Operation “Avatar.”

While the latest report has declined to disclose the senior manager’s name, Chua Wee Phong, who headed the circulation department from May 2005, left SPH in February 2021, as indicated on his LinkedIn profile. His departure occurred in the midst of the inflated circulation investigation period between September 2020 to March 2022.

Whether Chua is the redacted individual in question is speculative. However, the latest audit report does state that at least one senior management figure was aware and actively involved with the fraudulent circulation inflation practice within SPH. Chua wasn’t replaced as head of Circulation following his departure in February 2021, as shown by the omission of the Head of Circulation role in SPH’s 2021 annual report. 

Most of the senior management team from SPH have long since been replaced by new entrants. Some employees of unknown seniority were described to have left the company and others were disciplined following the initial inflated circulation scandal’s expose in January, and the general tone of the latest report indicates that damage control efforts are focused on drawing a line under the affair as an inherited legacy issue.