Sat 24 Apr 2021 | 07:14

New financial bomb drops on WPRFU 'amateurs'

New financial bomb drops on WPRFU 'amateurs'
Sat 24 Apr 2021 | 07:14
New financial bomb drops on WPRFU 'amateurs'
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SPOTLIGHT: Stormers coach John Dobson has been given a financial free rein in a new ‘Vision 2023/24’ campaign, but questions about the union’s finances resurfaced this week.

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Just a day after Western Province Professional Rugby (Pty) Chairman Ebrahim Rasool said Dobson will “get the players he wants” and Rasool will make the budget work, it emerged that the Western Province Rugby Football Union was unable to table Audited Financial Statements for 2019.

In fact, it reveals that WPRFU has effectively not been audited for two years – 2019 and 2020.

This emerged in a letter – sent to clubs and stakeholders – to inform them that a Special General Meeting has been postponed ‘indefinitely’.

“Find herewith confirmation that due to unforeseen delay in the receipt of the draft audited financial statements for 2019 the meeting is postponed,” a two-paragraph statement from Danny Jones, GM: Amateur Rugby said – adding that a general council meeting has also been postponed.

The fact that financials from 2019 has not been audited/approved suggests there are some serious issues dating back three years.

(Continue below …)

WPRFU-SGM-postponed

It also comes after a host of minutes of meetings from 2020 was sent out to clubs – containing some revealing information about the dire state of the union’s finances.

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It is revealing that two such contrasting pictures were painted of the company (WPPR) and the union (WPRFU).

It appears that the problem with approval of the 2019 financials relates to the manner in which WPRFU’s properties – currently bonded to Dreamworld and entangle in legal proceedings – were valued at more than ZAR411-million.

The 2018 valuation of the properties appear to create a distorted picture of the union’s finances – given that they were only bonded for ZAR110.7-million in the deal with Dreamworld and Flyt.

The minutes of the meetings last – revealing as they are – do not paint a rosy picture of the union’s finances.

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In fact, it even puts the company, WPPR, in a poor light.

In a meeting in August last year, the company (WPPR) projected a ‘cash shortfall’ of around ZAR20-million and a “business rescue” plan was even proposed.

WPPR-cash-shortfall

The union (WPRFU) then issued a guarantee to the company to cover its financial obligations.

It further appears the stand-off in negotiations between the WPRFU and the union’s main sponsor, DHL, are ongoing.

What is particularly interesting – certainly noteworthy – is that the sponsor had chosen to engage directly with players and staff, as a result of its frustrations with the behaviour of ExCo members.

DHL-sponsorship-saga

Despite repeated denials by the board and executive, the financial instability has filtered through to the playing squad and was the cause of “considerable unease” in the Stormers camp.

John-Dobson-report

And it was also revealed that the union is, yet again, looking at ‘contingency funding’ options, a “project” driven by President Zelt Marais.

Marais was also tasked to propose property deals that could offset the risk brought on by the dispute with Flyt and Dreamworld.

Contingency-funding

In a letter to the clubs and constituents, Marais made mention of an ‘A-grade Commercial Bank’ to replace Dream World as the union’s benefactor and was willing to put up a loan to pay of the Dreamworld loan – which in turn was used to pay off the Investec and Remgro loans.

All these developments followed a year in which WPRFU walked away from agreements with Remgro, Investec and MVM – in the case of Investec after the Heads of Agreement had already been signed.

Flyt-Dreamworld-saga

The minutes reveal exactly how the Remgro and Investec deals broke down, the accusations of ‘unprofessional conduct’ by members of the executive.

It is clear that the boardroom dramas of the past 18 months, or so, are far from improving.

@king365ed
@rugby365com

Also worth reading

Dobson’s ‘blank chequebook’
The snake pit that is WPRFU v Flyt
No cash flow crisis at WPRFU & WPPR
WPRFU and Dreamworld court stand-off just got real
WPRFU executive in ‘toxic’ internal war
REVEALED: WPRFU’s new benefactor
Flyt bomb drops on Newlands saga
McKeever was only a ‘facilitator’
WPRFU & Stade: Another McKeever misfire

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