SARU in the clear after failed equity bid?

NEWS: The South African Rugby Union has outlined the review process that was conducted following the failed equity deal with the Ackerley Sports Group.

Last year, SARU members resolved to reject a proposal to accept a private equity investment in the sport’s commercial rights.

The proposal failed to reach the 75 percent majority required for such a transaction to be approved.

Seven of the 13 member unions with voting rights opposed the proposal.

READ: SARU’s candid response amid Parliament scrutiny

It was also revealed that SARU had to cough up ZAR13 million in fees associated with the mooted private equity transaction.

There were stakeholder concerns and also questioning related to the establishment of a company, Win by One (Pty) Ltd in SA, and the sub-division of the fee that would have been payable to the international brokers who worked on the deal.

The Executive Council of SA Rugby mandated an auditing firm in January to conduct a review of two ancillary matters related to the proposed equity deal: the transaction commission process and the registration of a shelf company with a single registered director.

In a statement on Friday, SARU revealed the following process that was followed:

• Upon receipt of the auditor’s report, the President [Mark Alexander] appointed a sub-committee to undertake a review of the report’s findings.
• The sub-committee, comprising the independent chairpersons of the Audit and Risk Committee, the Social and Ethics Committee, the Finance Committee, and the deputy president, reviewed the report’s findings.
• The subcommittee, supported by the President, instructed its external legal consultant to review the report and provide guidance on the necessary actions to address its findings and recommendations.
• The external legal consultant had certain queries with the auditor’s report and requested its own forensic team to consider the auditor’s report.
• The external legal consultant’s forensic team conducted an independent assessment and thorough evaluation of the auditor’s report. It made its own findings as well as recommendations on various remedial actions to strengthen governance and mitigate risks for the organisation.
• Save for implementing the recommendations relating to governance and compliance the external legal consultant’s forensic team recommended that no other action was required to be taken.

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