Latest After SARRAL Liquidation

For many years Colin Shapiro, one of SA's most successful composers and other concerned music makers, fought a long court battle with the South African Recording Rights Association Limited (SARRAL) for what he says was the association's mismanagement of its members' funds. After the legal fight, Shapiro finally won the case and in November 2009 SARRAL was eventually liquidated as a result of a ruling made by the Johannesburg High Court.

Two years down the line, MIO sits down with Shapiro for a look back at the case and the impact it had on composers and societies that are now collecting mechanical royalties.

You, Hotep Galeta and other composers fought SARRAL for a very long time. Can you please explain why this was happening?

Colin Shapiro: In 2002, I attended SARRAL's Annual General Meeting and questioned several irregularities on the financial statements. No adequate answers were forthcoming and the members present voted me onto the SARRAL board of directors in order to investigate. I found abuse of royalties and company funds. I tried to rectify the situation internally via good corporate governance but met with resistance from the CEO who was personally benefiting.

I was eventually advised to apply for the liquidation of the company, or alternatively for a Government inspector to audit the books. SARRAL opposed this and an 8-year legal battle began.

In a nutshell: SARRAL's legitimate income had dropped, so the company had been using composers' royalty money to cover its running costs. This was in breach of the members' agreements, but SARRAL tried to defend this abuse by re-interpreting the founding documents. All told, over R41 million of musicians' and publishers' money was wiped out.

Sadly, Hotep passed away in 2010, but at least he witnessed victory over SARRAL. Many of my fellow composers were supportive throughout the process and I thank them for that.

The case took a while to be resolved and you eventually won. How did it feel?

Colin Shapiro: I felt vindicated but exhausted. It was a victory for justice and for all composers.

Can you briefly sum up the outcome of the case?

Colin Shapiro: The judge ruled that SARRAL had been mismanaged and that the company was factually insolvent, with no hope of recovery. He ordered that SARRAL be liquidated (closed down).

Now that SARRAL has been liquidated, what is the way forward?

Colin Shapiro: SARRAL used to deal with mechanical royalties, i.e. the reproduction of music recordings. The collection of these royalties is now administered by SAMRO and NORM.

Ok, but then what happened to members' royalties that SARRAL had collected before being liquidated?

Colin Shapiro: Sadly, there was virtually nothing left. SARRAL's advocate claimed in court that there was several million rand in reserve, but the liquidators found only R60 000. The money had all been used to run the company and to pay fees to interested parties.

What does SARRAL's liquidation mean for composers who were members of the organization?

Colin Shapiro: The company has been closed so all connections are over. All members are free to join SAMRO or NORM for the collection of their royalties. Composers have lost years of royalties, but things are about to improve, with SAMRO and NORM having recently signed an agreement with the SABC.

That's great news! What do composers need to do to receive the royalties that were owed to them by SARRAL, if there are any?

Colin Shapiro: The liquidators advertised for any composers who had claims to come forward with these. I also posted notices on the MIO and the CASA forums. The cut-off date has passed, but in any case, it is highly unlikely that anyone will ever get the royalties that SARRAL stole from them.

Are those who were SARRAL members automatically added to collecting societies that have taken over or they need to re-register their works with SAMRO and NORM?

Colin Shapiro: Ex-SARRAL members must apply to SAMRO or NORM for the collection of their royalties. Though both organisations have extensive databases of works, it is advisable that people re-register their works.

Ok. Where can composers go or call for more information regarding the societies that are now collecting mechanical royalties?

Colin Shapiro: http://www.samro.org.za/ - click on Mechanical Rights. SAMRO is more appropriate for freelance composers. http://www.norm.co.za/ - NORM only accepts publishers as members.

Any other important information you would like to share with our readers regarding the subject matter?

Colin Shapiro: For more info, visit this website: http://colinshapiro.co.za/truthaboutsarral/
My advice to all composers is to always notify their works with SAMRO or NORM, and keep a record if possible of all usage of their music. Don't just assume that broadcasters provide all the cue sheets - check up for yourself. Be wary of individuals who claim to represent composers' interests, particularly those who were part of SARRAL.

For general composer-related news and advice, visit the CASA (Composers Association of SA) website and forums: http://www.composers.co.za/ | http://www.composers.co.za/phpBB2/