How Staytus can save WPRFU's bacon

Only the reckless would look this proverbial ‘gift horse’ in the mouth.

Yet it appears a ‘get out of jail free’ card to the Western Province Rugby Football Union is still not finding universal favour in the Newlands corridors.

The most significant development is that a ‘settlement’ has already been reached that would prevent an aeonic, baroque and prohibitive legal battle over the union’s properties.

@rugby365com can reveal that Staytus Cape (Pty) Ltd – under the guidance of WP Professional Rugby Chairman Ebrahim Rasool – engaged with and reached an agreement with Flyt and Dream World to settle ALL the WPRFU loans, mortgages, claims and the pending litigation in one transaction.

This agreement also has the imprimatur of the six-man WPRFU/SARU advisory committee – Pat Kuhn, Samuel Ngumeni, Abubakar Saban, Zelt Marais, Rasool and Colin Moses.

All that remains is for the WPRFU President, Marais, to sign off on the deal and have it passed by the general council.

That was the purpose of a meeting this past Thursday – attended by members of the advisory committee – where the Staytus Cape deal was presented.

The intention was for the council to vote for or against the Status deal.

However, what transpired was a glimpse into the ‘dark side’ of the WPRFU’s inner workings.

With representatives of 80-odd clubs present, the WPRFU executive committee, as well as representatives of associated bodies and leagues present, the virtual meeting constantly descended into chaos.

It also transpired that certain documentation – particularly the proposal by the advisory committee that WPRFU accepts the Staytus Cape seal – was withheld from the council members attending Thursday’s meeting.

The absence of this significant document – the minutes of an advisory committee meeting held last Saturday, August 21 – caused considerable discord in Thursday’s meeting.

Marais, who was tasked with distributing the document, became very defensive and claimed he wanted an ‘amendment’ to the document before passing it on to council members.

The WPRFU President, Marais, was also involved in a dispute about who authored certain documents, with much time wasted rather than spent on constructive and informative presentations.

As a result the council meeting, which dragged on into the early hours of Friday morning, was adjourned till Monday – when the Staytus Cape proposal will again be debated and, possibly, voted on.

The deadline for Marais (and the general council) to sign off on the Staytus Cape and Flyt/Dream World deal is Tuesday, August 31.

The advisory committee document makes it clear the threat of the Flyt Property Investment (Pty) Ltd litigation is a “serious issue” and the WPRFU needs to understand that the litigation will be “ugly, drawn-out and costly”.

“There also is the possibility that the WPRFU will lose all its properties which are currently mortgaged in favour of the litigants,” the document stated.

Dream World Investments, an associated company within the Flyt Group, filed formal papers on WPRFU in the Western Cape High Court in March to recover a loan amount of ZAR113,130,482.01 (being the Loan Amount, plus interest), ZAR1,265,000.00, being the raising fee in terms of the Loan Agreement, plus interest, and the sum of ZAR30,156,585.41 as and for damages “in a sum equivalent to the Development Charge of 30 percent of the Loan Amount”.

The advisory committee made it clear that placing WPRFU ‘under administration’ remains an option.

“The Staytus Cape (Pty) Ltd deal is critical to the long term future sustainability of WP Rugby and SARU will need to consider the urgent implementation of Section 28 of the SARU Constitution if the WPRFU general council do not vote in favour of the Staytus Cape (Pty) Ltd deal,” the advisory committee said.

Some of the more pertinacious clubs – said to be Marais hardliners – claim they are being forced at the proverbial ‘gun point’ to accept a deal that they do not know enough about.

All the Staytus entities, as well as Flyt and Dream World, have already signed the settlement agreement.

Other aspects of the Staytus deal include the “optimal development” of the WPRFU properties; focus on the refurbishment and redevelopment of the Newlands stadium, without having to demolish the stadium and make WPRFU financially sustainable and profitable in the process.

It also includes walking back on the decision to sell WPRFU’s share of the rental income from the Sports Science Institute property.

“On the Newlands redevelopment alone, we project a ZAR2-billion profit and a net ZAR30-million per annum rental income from the retail and commercial uses,” a Staytus proposal said.

In this past Thursday’s meeting, the Marais camp was being accused of ‘reckless business practices’ during a particularly fractious period of the evening.

Some clubs actually asked for the Staytus representatives to be kicked out of the meeting.

The Marais camps, backed by a view from attorneys Korbers Incorporated, are keen to hold out for a “better” settlement and wants about ZAR90-million knocked off the bill.

Currently, Staytus would pay Flyt/Dream World the amount of ZAR205-million, while Korbers feel WPRFU should only pay the loan amount and interest – without any ‘damages’.

* Meanwhile, in an unrelated matter earlier on Thursday, the legal stand-off between Marais and former WPRFU executive board member Junaid Moerat was again postponed.

In June Moerat and his lawyers were successful in getting an interdict against the Marais-led WPRFU, after filing an urgent application in the High Court of South Africa: Western Cape Division.

Moerat, a former candidate for the CEO position of the union’s professional arm (WP Professional Rugby Pty Ltd), was suspended in February this year.

Moerat’s lawyers had challenged the legitimacy of the disciplinary process and after a breakdown in communication between the two parties turned to the high court to prevent the hearing from going ahead.

Judge Andre le Grange ruled in favour of Moerat – who was represented by Shaheid Schreuder and advocate Ross Randal.

Randal Titus represented Marais and the WPRFU.

The Judge, Le Grange, in his ruling said: “… the responded is interdicted from taking any further steps/prosecuting the disciplinary proceedings instituted against the applicant by the respondents on 17 February 2021.”

The hearing of the case – whether the process is legitimate or not – was placed on the ‘semi-urgent’ roll for this past Thursday, August 26.

However, a delay in the filing of documents resulted in the judge postponing the case.

@king365ed
@rugby365com

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