Western Province Professional Rugby chairperson Ebrahim Rasool has criticised the leadership of the union under president Zelt Marais in a statement responding to key questions surrounding the union.
This latest development in a continuing saga followed a week of drama in which Marais and Rasool (chairman of WP’s professional arm) locked horns after Marais allegedly failed to circulate a letter related to the contentious sale and redevelopment of Newlands Stadium and a proposal to enter into a transaction with Staytus Cape.
The letter was intended to be issued by the WPRFU’s advisory committee to members of the board or the clubs. Marais is a member of this committee and is known to be opposed to the proposal. Rasool belatedly realised that an online meeting of the main council, a precursor to a vote on the proposed transaction, would not be able to proceed without the letter and he took action to circulate the letter himself.
Marais will face a vote of no confidence on 20 September as he has come under fire for disobeying and acting in direct conflict with the instructions of the joint WPRFU and SA Rugby advisory committee.
SA Rugby has since walked away from the joint committee and, while initially hesitant to do so, the governing body could find itself with little option but to invoke clause 28 of the constitution and place the union under administration.
In a statement addressed to the media, attempting to answer some of the key questions surrounding the future of WP Rugby, Rasool slammed the leadership of the union under Marais, adding that he feared the president had “centralised all power” in his position.
“In my life I have faced worse, even life-threatening, attempts by more powerful people. I am not in rugby for name, fame or wealth. I simply bring some experience and a love for the game and the franchise. I fear neither of the two threats.
“What I do fear is megalomania by someone who already has centralized all power in his person: President of WPRFU, Board Member of WPPR, Acting CEO of WPRFU, Head of the Finance Committee, and now leader of a War Room, nullifying the established structures of WP Rugby, and shielded from oversight.”
Rasool said that while both he and Marais shared a vision of a financially stable union and professional company, it has become clear that the latter’s plan is no longer working.
“Sadly, it is in the last two months, when WP Rugby was exposed to mortal danger, that it became clear to us that our management plan was no longer working,” Rasool said.
FULL STATEMENT:
In response to recent media inquiries addressed to me, I now feel it is the right thing that I place my response on record. This should also help avoid the risk of being spoken for by third parties, something that might result in inadvertent miscommunication.
Many of the questions came after a Western Province Rugby Football Union (WPRFU) General Council Meeting (9 September 2021), during which the Union’s president, Mr Zelt Marais, allegedly named me as ‘betraying’ Western Province Rugby, acting without a mandate, and ‘leaking’ a SARU-WP Advisory Committee letter to clubs. Consequently, I was allegedly threatened with a ‘recall’ as Chairperson of the Board and with being ‘banned from rugby for life’.
Mr Marais has continued, in recent days, to centralise power in WP Province Rugby by unilaterally creating a structure he refers to as a “war room”, bypassing formal pre-existing structures in WP Rugby. Needless to say, his actions are creating a lot of confusion and discomfort, as they give reason to those, including in the media, who have been accusing WP Rugby of running along factions, and this effectively means that what has been rumour up to now has become reality.
It is for the above reasons, amongst many others, that it is important that I respond to the questions being asked.
Am I against Mr Marais?
One year ago, I was invited by Mr Marais to join the Board of WPPR as Chairperson. I gladly accepted because I shared his vision of a transformed Franchise, a financially sustainable Union and Company; a vision that would also ensure that the Clubs that form the bedrock of rugby in WP are financially enabled to nurture our rugby talent and benefit from our financial successes.
When Board members started resigning, equity deals failed, players threatened to leave, and extraordinary persuasion was needed to keep sponsors on our side, I realized that the reality confronting me was different from what I had expected. It did not make things easy when I further realized that the President of WPRFU was central to everything that was happening. Despite all of that, I continued to believe that the Board could remain committed to guiding a seamless operational turnaround at WPPR by tackling the challenges with the support of Mr Marais, in his capacity as president of the Union and board member.
Sadly, it is in the last two months, when WP Rugby was exposed to mortal danger, that it became clear to us that our management plan was no longer working.
Have I betrayed WP Rugby or have I served it?
The Board and I have done our utmost to serve WP Rugby, but because we have the WPRFU as a sole 100% shareholder, we did not have control of some crucial aspects of the initiatives we started. Where we had some control, we worked diligently: we persuaded our sponsors to stay with us, even if the terms of staying were highly conditional. They nevertheless went ahead and invested about R50m in WPPR. In our negotiations with the players, we signed most of the squad and most of the top national players for the next 3 years by promising them financial sustainability and good governance. Without these assurances, most of our key players would have exited with the Springbok captain. Where we had approaches by potential equity partners or developers, we passed these on to the WPRFU (the shareholder) for its further processing; we placed on the agenda the idea of an investment conference for WP Rugby as soon as there are prospects for stable and good governance; and we worked collaboratively in anticipation of getting the Cape Town Stadium ready for crowds, season tickets and suite holders, as the important component of our income strategy.
For the areas where we did not have influence, we were often just fire-fighting: as we were about to find some agreement with MVM (Marco Masotti’s investment initiative), the negotiations ended with them going to the Sharks, taking with them two of our key players after the WPRFU President mischievously inserted a line in a press announcement wrongly quoting Mr Masotti as apologizing to him for negotiating in bad faith. A press interview by the President with Rugby365 resulted in us having to apologise unconditionally to former directors who were about to sue us for defamation, promising them that the president would no longer address the matters in question in the media. On the matter of property deals, we were helpless spectators for a long time to threats by Flyt/Dreamworld to sue for astronomical damages, while holding the Union’s title deeds over all its properties. Our hands, as the Board were tied, as property matters were in the realm of the shareholder. Our involvement was only in attempts to facilitate healthier negotiations between the parties that would lead to the withdrawal of costly legal threats and a return of the properties to WPRFU. Such an outcome would also, by extension, benefit WPPR and help restore reputational credit for the entire WP Rugby.
Did I have a mandate to negotiate with Flyt or Dr Roux?
I was first introduced to Dr Werner Roux by Mr Marais when he invited me first to a meeting with his experts and his lawyers at the Vineyard Hotel, following which we left for the Werksmans’ offices. Rouxcor and its lawyers were present, so were members of the Exco. I say this to show that negotiations with Dr Roux/Rouxcor/Staytus started before I was chair of the Board and that my involvement followed an invitation by the President, which I gladly accepted.
It was at that meeting that the President unilaterally decided that ALL our properties must be valuated at R350m and that Dr Roux must purchase 50% of it for R175m and keep R25m for working capital, despite Dr Roux bringing proof of funds for R250m. This was the President’s way to avert relying only on loan capital. Despite being surprised, we went along in support of it because we believed that we then had a working agreement. The president also assured us that his lawyers would get our title deeds back from Flyt/Dreamworld so that the development could actually proceed if the Term Sheet with Dr Roux were signed.
However, later in a joint briefing with the WP-SARU Advisory Committee – to which the WPRFU Exco and the WPPR Directors were invited – Mr Marais introduced his legal team and Mr Simeon Korber proceeded to share his strategy for getting our title deeds back from Flyt, explaining his misgivings on the deal with Mr Roux. The picture they painted was of intractable litigation for about 5 years with Flyt, with no guarantee of success. I remember raising that in the absence of having our title deeds, the Union was losing the prospect of income from their properties, facing possible damages ranging from R400m to R700m that we may have to pay to Flyt, and incurring legal costs that could be astronomical, given that Korbers had already been paid R2,8m for a period of 8 months without us even being in court.
I THEN INDICATED TO THE MEETING THAT, BECAUSE THE PRESIDENT HAD BURNT HIS BRIDGES WITH BOTH FLYT AND DR ROUX, I WAS GOING, IN THE INTEREST OF WP RUGBY, TO ATTEMPT TO FIND A SETTLEMENT WITH FLYT BY ACTIVATING DISCUSSIONS WITH DR ROUX. It is important that not a single person in the room opposed this declaration.
Why should we accept a R205m settlement with Flyt?
Firstly, they hold our title deeds. Without title deeds no development can happen, not even on the 3% block share transaction of the Sports Science Institute. WPRFU’s properties are encumbered and will neither bring development income nor act as collateral for loans and overdrafts while the matter remains unresolved.
Secondly, if we look at the potential payment we may owe Flyt over the next few years while we’re in court, then the sums may look like this:
· R113m – repayment of original loan to Flyt; plus
· R 50m – potential interest over 5 years as signed by the President at a rate of 22%; plus
· R 32m – guaranteed payment to Flyt after 42 months, as signed by President; equals R190m plus
· Either Legal Fees for litigation with Flyt (still to be determined); and/or
· Damages claimed by Flyt (still to be determined).
Thirdly, we negotiated Dr Roux back to a gross amount of R250m, made up as follows:
· R185m for the purchase of 50% of ALL our properties (50% retained by WP in a WP Devco); plus
· R 20m additional loan against future Devco earnings for settlement of R205m with Flyt; plus
· R 10m immediate loan from Devco – NOT WP – to ease our cash flow needs; plus
· R 25m working capital advance from Devco for future operational needs in WP Rugby; plus
· R 10m to establish the WP Devco.
Fourthly, I was invited to address the WPRFU Exco to present and explain both the terms and amounts of the negotiations above, whereafter the Exco majority approved it, and it was also presented to a meeting of the SARU-WP Advisory Committee, with the Exco and the Board present, where Dr Roux himself presented these terms. Thereafter, ALL SIX MEMBERS OF THE ADVISORY COMMITTEE APPROVED THIS, INCLUDING PRESIDENT MARAIS, AND AGREED THAT IT MUST BE PRESENTED TO ALL THE CLUBS UNDER THE NAME OF THE ADVISORY COMMITTEE AND THAT DR ROUX MUST PRESENT IT AT A GENERAL COUNCIL, WITH THE SUPPORT OF THE ADVISORY COMMITTEE.
Fifthly, while the cash injection does not solve our Covid-induced problem, the overall deal does ease our cash flow, and begins to make us a going concern, allowing the sponsors to continue transferring money to us, allowing the audit to be complete, and preventing us from entering into business rescue.
Did I “leak” the SARU-WP Advisory Committee Letter to the Clubs and Why?
The letter from the SARU-WP Advisory Committee was a mandated letter based on the decision to support the settlement deal that was agreed to by all in a vote, INCLUDING MR MARAIS! The President accepted the task to both convene the General Council in time for the settlement to be effective with Flyt and Dr Roux, AS WELL AS DISTRIBUTING THE LETTER TO THE CLUBS OF WPRFU, and to invite Dr Roux to present the proposal to the General Council, together with the Advisory Committee members.
On the day of the General Council, none of these tasks that Mr Marais accepted were done, and I took immediate responsibility 2 hours before the General Council to distribute the letter – ACTING ON THE RESOLUTION TAKEN BY THE ADVISORY COMMITTEE – and to invite the relevant people. This was therefore NOT a ‘leak’, as some would have us believe, but the implementation of a decision that the President was in agreement with and carrying a mandate that he too voted for. It is now on record that this episode led to the disbandment of the Advisory Committee, WHOSE EXISTENCE AND TERMS OF REFERENCE THE GENERAL COUNCIL VOTED FOR!
Do I fear being ‘recalled’ and ‘banned for life’?
In my life I have faced worse, even life-threatening, attempts by more powerful people. I am not in rugby for name, fame or wealth. I simply bring some experience and a love for the game and the Franchise. I fear neither of the two threats. What I do fear is megalomania by someone who already has centralized all power in his person: President of WPRFU, Board Member of WPPR, Acting CEO of WPRFU, Head of the Finance Committee, and now leader of a War Room, nullifying the established structures of WP Rugby, and shielded from oversight.
As chairperson of the board of Western Province Professional Rugby I feel it is my duty to address the ultimate shareholders, being the clubs, and provide them with a report on all the work done by the board to date, inform them of progress and solutions that the board had proposed to the myriad of challenges facing WP Rugby, unpack the gravity of the dire situation we all face, and present the plan put forward to overcome the challenges.
I would also like to assure you that the board that I lead, working together with the executive management of WPPR, remain committed to do our best for WPPR, hopefully supported by a Union with a rich tradition and a great future, despite a divided past.
Giving up is not an option.
Is there a way forward?
I would suggest that the next 10 days are absolutely crucial for the life of WP Rugby. If we can get a mandate from the Clubs of the WPRFU, then we can:
– Attempt to salvage the settlement with Flyt and get the Union’s properties back;
– This requires endorsing the Termsheet with Rouxcor/Staytus;
– This will transfer within 7 days R10m to pay our bills;
– It resolves litigation and damages;
– We can declare WP Rugby a going concern;
– We can persuade the Sponsors to continue sponsoring us;
– And, with our future secured from developing the properties, we can make WP Rugby great again!
Photo: Ashley Vlotman/Gallo Image
