Advertising Standards Authority of South Africa placed into Business Rescue.

Posted 15 November 2016

It is sad to read that thanks to, among other, legal action by Herbex, Antagolin, USN, Homemark and others, challenging the ASA’s jurisdiction, has had a major impact on the operating funds of the ASA. Even the Health Products Association of South Africa (HPA) has not renewed its membership. This has resulted in the ASA having to be placed into Business Rescue. As documented on CamCheck, these companies are responsible for selling products with little or no evidence of efficacy to consumers. The ASA’s role has been to prevent South African consumers from being duped by companies making false claims, and therefore defrauding consumers.  All of the companies are represented by the lawyer, Saul Shoot of Fluxmans.

It must be noted that the court cases have not challenged the ASA’s rulings on the merits of the advertising. It’s been more of an issue of “turf wars” than accepting and adhering to rulings made by the ASA in the public interest.

Readers may be aware that Albe Geldenhuys, owner of USN, and USN, have instituted a High Court action against the consumer activist, Dr Harris Steinman demanding R2 Million. Antagolin, similarly is demanding R300,000. Herbex and Antagolin have taken the ASA to the High Court, preventing the ASA from assessing or acting on claims that Herbex and Antagolin wish to make in their adverts. The former followed Judge Kate O’Regan’s FAC ruling that found that there was proper evidence to support Herbex’s claims for 3 products.

Advertising Standards Authority of South Africa placed into Business Rescue.

JOHANNESBURG, 15 November 2016 – At a meeting held on 18 October 2016, the Board of the Advertising Standards Authority (ASA) resolved that the organisation voluntarily commence Business Rescue proceedings and be placed under supervision in accordance with the provisions of Section 129(1) of the Companies Act. The ASA board took this decision to allow time for the process of restructuring the organisation, while reviewing and rebuilding its funding model.

The ASA is a self-regulatory independent body, established by the marketing, communications and media industries and is mandated by those members to regulate against unfair and misleading advertising which could compromise consumers and impact unfairly on competitors. The ASA has been safeguarding consumers’ interests and protecting freedom of commercial speech since 1968. It continues to enforce, adopt and uphold its Code of Advertising Practice in an impartial and objective manner.

“The ASA performs a fundamental public service by self-regulating advertising in South Africa. The implementation of a Business Rescue plan ensures that the public will continue enjoying protection from untrustworthy advertising material while we work on implementing a new funding model,” says Nkwenkwe Nkomo, Chair of the ASA.

Continues Nkomo: “The organisation is supported by government and the marketing, advertising and media industries as a relevant organisation. The ASA has applied for recognition as an Ombudsman under the National Consumer Protection Act. The Business Rescue process is therefore an ideal opportunity to overhaul the operations of the ASA toward its imminent Ombud status. Once accredited, the ASA will be recognised in both law and jurisdiction. This will allow it make findings/rulings on all deceptive and misleading advertising claims thereby protecting consumers and raising standards of good conduct within the industry.

Concludes Nkomo: “All stakeholders would like to see the continued existence of the ASA as a self-regulatory body for the industry.  The decision taken by the Board provides the time and space to make the necessary changes required to safeguard its sustainability and to ensure that we deliver a fit-for-purpose ASA to the industry at large in 2017.”

The Business Rescue practitioner will be engaging with all relevant affected parties and will also inform the process of restructuring the organisation. The ASA looks forward to continuing to discharge its mandate under the purview of its Code of Practice, and will defend the rights of all stakeholders in accordance with this mandate.

Ends / 386 words

Contacts

Mike Gendel

ASA Board Director

(011) 880 2616

[email protected]

 

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