EXPOSE: New legal bomb about to drop on Stormers' equity deal
With much fanfare last Friday, December 15, Western Province Professional Rugby (Pty) Ltd announced the competition commission had approved their equity deal with the Red Disa consortium.
The clubs that constitute the Western Province Rugby Football Union General Council, on August 30, voted by a significant majority in favour of the proposal that Red Disa obtain 74 percent ownership of WPPR in a new equity deal.
The WPRFU retains the remaining 26 percent.
However, @rugby365com can reveal that a court interdict is about to be launched in a dramatic turn of events to overturn the Competition Commission decision.
Philip Burns, a former ‘Non-Executive Director’ of WPPR, confirmed he is part of the legal action and revealed they have already engaged with the competition commission to ‘appeal’ the decision.
Instructions in this regard have already gone out to their lawyers and the above actions are ‘pending and underway’.
The multi-faceted legal actions will accompany various disclosures to key institutions and listed companies ‘in terms of the protected disclosure act’.
It is not the first time Burns had threatened to go the legal route, in his dispute with the South African Rugby Union – after they placed WPRFU under administration in October 2021.
In January 2022 Burns threatened to file a “formal criminal complaint” against the South African Rugby Union with the Serious Commercial Crimes Directorate – also known as the Directorate for Priority Crime Investigation or HAWKS.
In the current action over the equity deal, the core issues rest in ‘corporate governance’, and the ‘rule of law’.
The parties opposing the equity deal have also obtained an ‘independent’ valuation of WPPR, claiming it is ‘undervalued’ in the equity deal.
According to the valuation – which @rugby365com has a copy of – the appraisal for WPPR ranges well upwards of ZAR500-million (at its most conservative level), to well over ZAR1-billion, ‘if structured, funded and strategically managed’.
Stormers coach John Dobson described last Friday’s announcement ‘Christmas come early’.
“It is a huge moment for rugby in our province and for the Stormers and Western Province professional teams,” Dobson said.
“It finally feels real now that the competition commission has ruled on the deal.
“These are historic moments in our rugby history in this province.
“Red Disa’s ownership is vital for the financial future of our rugby and I look forward to working with the new ownership, with our primary ambition our desire to create the most innovative and exciting club rugby brand in the world, as we strive to marry on-field excellence and performance with the best business practices off the field,” he added.
@king365ed
@rugby365com
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