CAPE TOWN - SA Rugby president Mark Alexander says it was “very much the last resort” to put the Western Province Rugby Football Union under administration after months of negotiations went nowhere.
A joint oversight committee between the WPRFU and SA Rugby had to be disbanded after a few weeks, and the governing body for the sport in the country felt that they could “no longer stand by” and watch how the Cape rugby institution continued to be dogged by failed business deals and power struggles in the boardroom.
At Monday’s SA Rugby Executive Council meeting, they invoked their constitutional power to appoint former chief executive Rian Oberholzer as the administrator for the WPRFU (union), who will also be in charge of supervising the operational affairs of WP (Pty) Ltd (board), which manages the professional playing teams of the Stormers and Western Province.
“Clause 29 of the constitution of the South African Rugby Union charges that all unions have to ‘conduct their business affairs in such a way that, at all times, they are in a sound financial position, comply with the laws of the Republic and adhere to the requirements of good governance’,” Alexander said on Tuesday.
“It is Exco’s view that WPRFU has failed that test, and we could no longer distribute SA Rugby income in that knowledge. On that basis, we have taken this decision with a heavy heart.
“We had engaged with the WPRFU over a number of months on the challenges the organisation faced and tried to assist them in finding solutions.
“This is very much the last resort, but it had become apparent that the union’s leadership was incapable of putting in place the actions to regularise its position.
“Several of the Union’s stakeholders have contacted our offices to express their dismay, and we are aware of the public alarm.”
Over the last year, at the heart of the matter is the conflict between the union and the board, with union president Zelt Marais and board chairperson Ebrahim Rasool at loggerheads with each other over governance matters, various possible equity deals and boardroom politics.
Marais has been searching for an equity partner for the last few years, but deals with various companies and entities such as Remgro, Investec, MVM, Flyt and Staytus have not worked out.
The Staytus deal, recommended by the SA Rugby-WP joint committee, would see Flyt return the union’s title deeds and end all damages claims, as well as a payment of up to R200 million.
The in-fighting has led to almost the entire WPRFU executive being either suspended or resigning in recent months, with just Marais, deputy president Moneeb Levy and Nadeema Khan remaining until yesterday’s action by SA Rugby.
Marais said in a statement on Tuesday that SA Rugby’s intervention was “not ideal”, but “now is not the time to debate the merits” of it.
He pledged that the WPRFU will provide their full support to Oberholzer and SA Rugby.
“As WP Rugby we will cooperate with the appointed administrator to the extent that he would require us to furnish him with the information and support needed to meet the mandate given to him by SARU in the shortest possible time,” Marais said.
“Our clubs remain the custodians of rugby at WP Rugby. Ultimately, it will be the clubs that would decide on a future course of action at WP Rugby once SARU has completed the processes it is embarking on.
“I am especially appealing to our sponsors, suppliers, supporters, officials, staff, players, coaches, and clubs not to despair. We have all been through difficult times, especially over the past two years, but with your support, the continued resilience that you have shown during these difficult times will contribute significantly to the turnaround that is inevitable at WP Rugby.
“We are known for never throwing in the towel, and I want to encourage each one of you to remain positive, strong in the belief that our glory days will return.”
Rasool issued a statement welcoming the action taken by SA Rugby.
“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.
“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.
“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.
“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 modernise WP Rugby with the right kind of equity partners that are aligned to our rugby traditions.”
SA Rugby said that Oberholzer would not be speaking to the media about his role as the administrator, with Alexander adding that the decision would not have “any direct influence” on the Stormers, who are currently on their United Rugby Championship tour in Europe and will play against the Dragons on Friday (8.35pm SA time kickoff) in Newport, Wales.
Cape Times