WPRFU: Clubs gunning for SARU administrator

By Jan de Koning

Monday 7 Feb 2022

The South African Rugby Union-appointed administrator, Rian Oberholzer, will be asked to answer some tough, challenging questions from Western Province Rugby Football Union clubs when the two groups eventually get together.

In October last year, SARU invoked Clause 29.5 of the constitution, following years of decline that resulted in the union being bankrupted.

The experienced former SA Rugby CEO, Oberholzer, was appointed as the administrator and assumed oversight of the union's affairs.

It was never going to be an easy mare's nest to unbraid, given the protracted and ongoing boardroom drama.

The first time bankruptcy was declared was when the WPRFU obtained an order for the liquidation of Western Province Rugby (Pty) Ltd, the union's professional arm - in which it was a 75 percent shareholder. That was under the presidency of Thelo Wakefield.

Wakefield's successor, Zelt Marais, was suspended when Oberholzer took charge of the union's affairs more than three months ago.

Marais' conduct has been in the spotlight throughout his tenure and Oberholzer, in a letter to the clubs, revealed that at the time of his appointment Western Province Rugby was in such a dire operational and financial position it was trading whilst 'factually insolvent'.

In his letter, Oberholzer confirmed that an 'update meeting' with the clubs will be convened during the last week of February or early March 2022.

It is at this meeting that the SARU administrator can expect to be roasted by some members of the union's 90-odd clubs.

Oberholzer's letter is in response to communications from some clubs, who are demanding 'action' and 'answers' from the administrator.

One of the more significant demands is that Marais formally is declared a 'delinquent' for his actions and that he be 'barred' from any involvement in the game in the future.

Oberholzer, in his response, touched on a number of the requests from the clubs - which are also likely to be raised again when they interrogate Oberholzer at the 'update meeting'.

Very high on the priority list is the move from Newlands to the Cape Town Stadium by the union's professional teams - Western Province and the Stormers.

The administrator made it clear the Heads of Agreement and the commercial arrangement set out therein "do not adequately deal with revenue optimization nor cost reduction for Western Province Rugby".

"In light of this, I have asked the City of Cape Town and Cape Town Stadium for an opportunity to review the commercial terms set out in the HoA and look for a way to secure the long term best interest of all parties," Oberholzer said in his letter.

The ongoing and polemical property battle is another conundrum Oberholzer is wrestling with - admitting that there is 'more than one party' that are laying claim to the rights to these properties.

The union's properties are currently bonded to the Flyt/Dreamworld group to the tune of ZAR150-million to ZAR200-million (depending on which group's lawyers are speaking).

Staytus Cape (Pty) Ltd also believes they have a binding contract with the union to settle ALL the WPRFU loans, mortgages, claims and the pending litigation in one transaction. They will then develop the Newlands properties.

"I am in the process of providing the guidelines for a viable way forward regarding the sale of the fixed property," Oberholzer told the clubs, adding: "This includes obtaining an independent objective value of the properties and looking for a way fair forward that optimizes the value and benefit to Western Province Rugby."

It is also clear from the letter that the union is unable to continue maintaining the Newlands pitch, hence the need to get a better deal for the use of the Cape Town Stadium.

"The costs of maintaining the Newlands pitch is in excess of ZAR150,000.00 per month.

"Given the predicament that Western Province Rugby finds itself in, the cost of ongoing maintenance of an unused pitch cannot be accommodated.

"The deterioration of the pitch should not impact on the value of the proposed property transaction as it may well not be a sport code development in future."

He added that attracting a suitable equity partner for the professional arm, Western Province Professional Rugby (Pty) Ltd, is also linked to a move to Cape Town Stadium on terms that would be acceptable to an investor.

Oberholzer also had to untangle a number of very sensitive HR issues.

"They all have been dealt with, bar one," he said, without mentioning which case is outstanding.

"In terms of outstanding legal cases, most of these matters have been settled or resolved.

"Western Province Rugby is seeking costs awards in certain civil matters."

He added that he is also looking into the union's structures, reviewing the 'organogram'.

"I am guided by the mandate to act in the best interest of Western Province Rugby - this includes 'righting the ship' and making recommendations to secure the way forward with a property partner and an equity partner in a sustainable manner.

"My mandate is not retrospective.

"The mandate is not aimed at redressing the past - it is aimed at solutions for the future."

Oberholzer admitted there may be "consequences" as a result of past actions, but these will need to be addressed as part of a separate mandate.

"I look forward to constructive engagement, objective discussions and positive outcomes for all."

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