WP and Remgro bosses face criminal charges

It has come to light that Aerios filed the criminal charges against the directors and CEO of the liquidated company Western Province Rugby (Pty) Ltd.

It is believed that the elite investigative unit, the Hawks, may become involved.

And in another twist former WP benefactor Remgro Sports Investments  has been implicated in the criminal case.

This comes at a time when Aerios and WP Rugby are in a legal stand-off in the Section 417 enquiry into the liquidation of WP Rugby in December last year.

The criminal case revolves around a requirement that the WP Rugby bosses had to provide the liquidated company's "statement of affairs" to the Master of the High Court – as required by the Companies Act of 1973.

When Justice Binns-Ward issued the final liquidation order against WP Rugby (Pty) Ltd in December last year, the directors and officers of the company (WP Rugby) were obliged to lodge the "statement of affairs" with the master of the high court within 14 days after the winding up of the company.

When Aerios asked the legal representatives of the liquidators to provide a copy of the "statement of affairs" of WP Rugby, the attorneys of the liquidators confirmed that no "statement of affairs" has been lodged with the Master – despite 10 months having elapsed since the final liquidation order was granted.

The attorneys of the WP Rugby's directors and officers had reportedly been "reminded" to comply with their statutory obligations.

Noncompliance can result in imprisonment or a fine –  or both.

Remgro is implicated because not only was the company a shareholder of WP Rugby, but had directors serving on the board of WP Rugby

Aerios CEO Costas Constantinou said he feels Remgro Chairman Johann Peter Rupert must have been aware all along what the plan was for Western Province Rugby long before the liquidation and what the Remgro plan would be after liquidation.

"Johann Rupert continues to allow Remgro and First Rand director Francois Knoetze and Remgro group financial director Neville Williams to continue in this manner," Constantinou said about the actions that resulted in the criminal charges being filed.

"Remgro is a JSE listed company with significant investors – like pension funds and collective investment schemes. Surely this practise needs to be investigated by the Remgro board shareholders," Constantinou added.

While the criminal charges and the Section 417 enquiry are two separate issues, it is part of the broader battle between Aerios and WP Rugby – a matter that seemingly has a price rag of ZAR270-million.

In the latest development in the Section 417 enquiry Western Province Rugby Union CEO Paul Zacks (who was CEO of the liquidated company WP Rugby) and Colin Moses (Chief Financial Officer of WP Rugby) applied to the High Court of South Africa (Western Cape Division) to seek interim relief – pending the institution of an application to review and set aside the issue of subpoenas that were served on WP Rugby officers and officials last month.

At the heart of the issue before the High Court is the books and financial records of the liquidated company – WP Rugby.

In documents before the High Court it is clear Zacks is determined to have the subpoenas set aside – in order to avoid said documents being handed to Aerios' legal team.

The stand-off – between WP Rugby (Zacks and Moses) and Aerios – is whether said documents (books and financial records) should be released to Aerios and also be available to the Section 417 enquiry.

According to the court documents the books and financial records are still in possession of WPRU (who bought out the liquidated company – WP Rugby).

It is claimed the liquidator should have taken full control of the liquidated company's books and papers.

Zacks is contesting this and in the court papers it is clear the liquidator did not take control of the books and records, even with all the publicity surrounding the case.

Those documents are still sitting on a joint server at WPRU headquarters.

This raised questions about why Zacks and Moses would be so determined to keep the documents inaccessible.

The application brought by Zacks submits that because the books and records are in possession of WPRU, a court order must be obtained to get said records.

However, Because an inquiry has been granted by the Master of the Court, a commissioner has been appointed – with all the necessary powers to conduct the inquiry and obtain the financial records.

The subpoenas were issued by the commissioner for the relevant books and records.

According to the court documents it appears that Zacks (and Moses) accept that the issue (validity) of the subpoenas will "in due course" be determined by the commissioner, Judge Bertelsman.

However, he is still contesting it in the High Court.

It is clear that the legal battle is going to drag on for some time and will continue to do harm to the reputation of WPRU.

By Jan de Koning

@king365ed

@rugby365com