WPRFU 'brinkmanship' at the core of takeover

REACTION: The decision by the South African Rugby Union to place the Western Province Rugby Football Union under administration has been widely welcomed.

The warning signs have been there for a couple of months and the bomb finally dropped on Tuesday when SARU advised WPRFU President Zelt Marais that it was invoking its constitutional power to take administrative control of the union.

The administrative takeover, with experienced former SARU CEO Rian Oberholzer now assuming oversight of the union’s affairs, was first raised almost two months ago when the national body pulled the plug on the WPRFU/SARU Advisory Committee.

As @rugby365com reported in early September, SA Rugby Chief Executive Officer Jurie Roux penned a letter that informed the WPRFU President, Marais, that SARU has withdrawn from and ended the existence of the WPRFU/SARU Advisory Committee.

As a result of Tuesday’s intervention by SARU, all elected and appointed officials at WPRFU and WPPR have been suspended.

This includes President Zelt Marais and the two remaining members of his ExCo – Deputy President Moneeb Levy and Nadeema Khan – as well as the already suspended ExCo Five: Reuben Riffel, Anele Zita, Quintin Van Rooyen, the already suspended Mario Williams and vice-president Ronald Bantom.

They were suspended by Marais last Thursday, October 7.

Also out of office as a result of the SARU takeover is WPPR Chairman Ebrahim Rasool and the few remaining members of the company board.

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Rasool, in reaction to the SARU intervention, said he welcomes the decision by the national body.

“This decision is regrettable, because there was sufficient opportunity to resolve the financial issues at the core of WP Rugby, but instead the situation was worsened through brinkmanship,” Rasool said.

“It is now clear that there was no alternative left for SARU but to act decisively, and I am relieved that they did.

“The majority of the Board Directors of WPPR were painfully aware that our fiduciary responsibility was leading us to exercise the option of Business Rescue, which we would have had to decide on Friday 15 October 2021.

“But even there the brinkmanship of suspending five ExCo members meant that the board’s quorum was dealt a fatal blow, such that four independent directors chose to resign rather than having their integrities compromised.

“SARU’s intervention comes as a vindication for those directors as well as the ExCo members who chose to speak up and not condone the wrong they saw.”

The ExCo Five also reacted to the intervention, calling it ‘bitter-sweet news’ and a vindication of their decision to launch court action against Marais last month.

They said their court action was to save the WPRFU from “delinquent and reckless management”.

“This intervention by SARU was avoidable and the High Court application by the five ExCo members unavoidable – as there was a rapid deterioration in the corporate governance and financial position of the WPRFU,” the ExCo Five said in a statement.

STATEMENT BY EBRAHIM RASOOL ON SARU’S INTERVENTION IN WPRFU: 12/10/2021

I welcome the decision by SARU to place the WPRFU under Administration as allowed in Section 29 in the SARU Constitution.

This decision is regrettable because there was sufficient opportunity to resolve the financial issues at the core of WP Rugby, but instead the situation was worsened through brinkmanship.

It is now clear that there was no alternative left for SARU but to act decisively, and I am relieved that they did.

The majority of the Board Directors of WPPR were painfully aware that our fiduciary responsibility was leading us to exercise the option of Business Rescue, which we would have had to decide on Friday 15 October 2021.

But even there the brinkmanship of suspending 5 ExCo members meant that the Board’s quorum was dealt a fatal blow, such that 4 Independent Directors chose to resign rather than having their integrities compromised.

SARU’s intervention comes as a vindication for those directors as well as the ExCo Members who chose to speak up and not condone the wrong they saw.

Indeed WPRFU has failed the test of good governance and financial and prudence and we will co-operate with SARU completely to revive a proud Union and a rugby-lovers region and restore respectability and integrity.

While I gladly have no formal position in WPPR, I would want Mr Rian Oberholzer to have the benefit of our collective insights into what went wrong in WP Rugby: to appraise him of the pitfalls and dangers in potential deals where due diligence was sparse and conflicts of interest possible; and to brainstorm how to modernize WP Rugby with the right kind of equity partners that are aligned to our rugby traditions.

I want to appeal to WPRFU to give this intervention a chance to stabilize our finances.

I would urge the sponsors to work with SARU and renew your sponsorships and transfer your tranches. I want to say to the team that despite the results, we are on the right track through playing a high tempo style of rugby and sticking to the talent nurtured in our region.

With the prospect of our loyal fans returning, we hope the rugby public in the Western Cape will return with a perfect storm: financial stability, boardroom integrity; strong grassroots traditions intact; and a competitive team.

MEDIA STATEMENT BY THE SUSPENDED WPRFU EXCO FIVE OCTOBER 12TH, 2021

The breaking news of this morning that the South African Rugby Union (SARU) has taken the decision to put the Western Province Rugby Football Union (WPRFU) under ‘administration’ comes as bitter-sweet news but more as a vindication of the five Executive Members, i.e. Reuben Riffel, Anele Zita, Quintin Van Rooyen, Ronald Bantom and Mario Williams, High Court application on the 23rd of September 2021 to safe the WPRFU from the delinquent and reckless management of the WPRFU.

This intervention by SARU was avoidable and the High Court application by the Five EXCO members unavoidable as there was a rapid deterioration in the corporate governance and financial position of the WPRFU. This High Court application by the Five EXCO members led to the vindictive, arbitrary and capricious suspension of the Five EXCO members by the President of WPRFU. This vindictive suspension led to the resignation of 4 of the Directors on the Board of the professional arm of WPRFU.

Taking all these events into account, there was no option for SARU than to intervene.

The Five EXCO members could not sit idle and silent and witness the scant disregard to corporate governance and now feel that their High Court application is vindicated by SARU’s “administration” intervention.

@king365ed
@rugby365com

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