Zelt faces new legal threat

By Jan de Koning

Thursday 2 Sep 2021

NEWLANDS UPDATE: Embattled Western Province Rugby Football Union President Zelt Marais is facing a new legal challenge.

@rugby365com can reveal that Werksmans, acting on behalf of Staytus Cape (Pty) Ltd, has written to Marais to alert him of potential legal action by their client.

This development comes on the eve of the deadline for the Marais-led WPRFU general council to accept an offer from Staytus to settle its debt with Flyt and Dream World and free up all the union's bonded properties.

Those properties are currently tied up in a legal dispute with the Flyt/Dream World group.

Staytus Cape (Pty) Ltd – under the guidance of WP Professional Rugby Chairman Ebrahim Rasool – engaged with and reached an agreement with Flyt and Dream World to settle ALL the WPRFU loans, mortgages, claims and the pending litigation in one transaction.

The deadline for Marais (and the WPRFU general council) to sign off on that deal was this past Tuesday, August 31.

However, despite two fractious meetings last Thursday and this past Monday, the WPRFU general council failed to reach a conclusion.

As @rugby365com revealed, Staytus managed to negotiate an extension with Flyt – with Friday, September 3, the new deadline.

However, Marais made it clear this extension is insufficient and the deadline won't be met.

It has now emerged that Staytus, based on statements made by Marais at two meetings, decided to address the WPRFU President directly.

"We address you in your personal capacity as well as in your capacity as the President of the WPRFU, at the instance of our client, Staytus Cape (Pty) Ltd," the Werksmans attorney's letter reads.

Notice has already been given of a WPRFU council meeting, scheduled for next Thursday, September 9.

The only point on the agenda - apart from the welcome and obituaries - is the Staytus attorney's letter.

Given that the Staytus offer won't be approved this week - despite terms sheets having already been signed - the settlement agreement with Flyt/Dream World will expire on Friday.

That means Flyt/Dream World will likely proceed with their legal action against Marais and the WPRFU.

Staytus is now also threatening to claim 'damages' from Marais for having engaged with an alternative benefactor while Staytus has - what they believe - is a signed exclusivity agreement with the WPRFU.

This all comes in a week that the WPRFU clubs filed a second 'vote of no confidence' in Marais.

As @rugby365com revealed, Monday afternoon (August 30) 21 clubs had filed letters in support of a 'vote of no confidence' against Marais.

At the heart of the latest legal stand-off is two term sheets.

The one term sheet was signed by Marais, but not signed by Staytus representative.

The other term sheet is signed by vice-president Ronald Bantom and signed by Staytus Director Werner Roux.

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It emerged at last Thursday's fractious general council meeting that Marais may not have been mandated to sign the term sheet and Roux made a statement in the meeting that the document was drawn up by Marais' attorneys.

It is now claimed that the first term sheet was not even discussed by or mandated by the WPRFU executive committee.

In contrast, the second term sheet, signed by Bantom and Roux, was - according to the Werksmans letter - discussed at an 'urgent meeting' of the Executive Committee of the WPRFU.

"The ExCo resolved, inter alia, that it accepts the Staytus term sheet," the letter said, adding: "The resolution was adopted by a simple majority of the members, at which the prescribed quorum of members were present."

Bantom signed the Staytus term sheet on August 20 - a term sheet that had already been signed by Roux on August 5, well ahead of the appearance of the Marais term sheet.

There are some differences between the term sheets.

One of the main issues is the 90-day period of exclusivity - during which time Marais and the WPRFU may not "solicit, initiate or encourage any expression of interest, enquiry, proposal or offer regarding any merger, amalgamation, business combination, takeover bid, sale or other disposition of the equity in and/or business and/or assets [specifically the Properties] of any of the parties."

The Marais term sheet makes reference to a ZAR10-million payment for the rights to exclusivity, while the Bantom-signed term sheet has no such clause.

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Subsequent to Bantom signing the Staytus term sheet, Marais - on two occasions alerted to WPRFU/Marais courting an alternative benefactor.

The first was during the general council meeting last Thursday, August 26, when he presented a 'revised offer from a third party' as an alternative option to the Staytus deal.

Also, during a meeting of the SA Rugby/WPRFU advisory committee - on which Marais, Pat Kuhn, Samuel Ngumeni, Abubakar Saban, Ebrahim Rasool and Colin Moses serve - Marais informed the meeting that he was aware of other funders and possible partners whom he believed would be able and willing to better the Staytus offer.

This meeting was held on August 30.

Marais maintains that the provisions of the Bantom-signed term sheet are not binding upon the WPRFU, as the adoption thereof is still to be confirmed and/or ratified by the WPRFU.

Werksmans made it clear Staytus will not hesitate to institute legal action in Marais doesn't abide by the terms of the signed document.

"We demand you desist from contravening the binding provisions of paragraph 13 of the term sheet and also desist from informing representatives of the WPRFU that the resolution is not binding and must still be ratified by the council," the Werksmans letter said.

"Failing [to do so] will leave our client no alternative than to approach the court on an urgent basis for appropriate relief."

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