ATC230223: Report of the Portfolio Committee on Tourism on the proposed Tottenham Hotspur Football Club sponsorship by South African Tourism and governance issues at the entity dated 21 February 2023
Tourism
REPORT OF THE PORTFOLIO COMMITTEE ON TOURISM ON THE PROPOSED TOTTENHAM HOTSPUR FOOTBALL CLUB SPONSORSHIP BY SOUTH AFRICAN TOURISM AND GOVERNANCE ISSUES AT THE ENTITY DATED 21 FEBRUARY 2023
The Portfolio Committee on Tourism, having considered the proposed sponsorship deal between South African Tourism and Tottenham Hotspurs Football Club, and having observed governance issues within South African Tourism on 7 February 2023 and 21 February 2023, reports as follows:
- INTRODUCTION
- 1 The Committee learned through media reports that South African Tourism intends sponsoring Tottenham Hotspur Football Club based in the United Kingdom. The amount brandished in the media was R910,997,814.75 (almost R1 billion).
1.2 In light of the revelations from the media, and the Committee having not approved budget of such a sponsorship in the 2022/23 Annual Performance Plan, the Committee convened a special meeting with South African Tourism on 7 February 2023. The meeting was meant to verify the reported information on the Entity’s plan to invest the said amount to Tottenham Hotspur over a period of three years.
1.3 Having observed some organisational instability at South African Tourism, the Committee also convened a meeting with the Entity on 21 February 2023 to discuss 2022/23 Quarter 1 and Quarter 2 performance reports. The discussions were dominated by organisational instability at South African Tourism, with emphasis on Board members, resignations, and appointment of new Board members.
1.4 The two aforementioned meetings confirmed the Committee’s concerns over governance issues at Board level and possible future wasteful and fruitless expenditure. It is in light of these concerns that the Committee seeks urgent interventions by the National Assembly to halt the Tottenham Sponsorship deal and eradicate governance challenges at South African Tourism.
2 MATTERS OF CONCERN OBSERVED BY THE COMMITTEE
2.1 The reported information on the proposed sponsorship of R910,997,814.75 was collaborated by South African Tourism in the meeting of 7 February 2023.
2.2 In justifying the sponsorship, the Entity argued it is a strategic marketing investment and cited similar investments done by other Destination Management Organisations, such as Rwanda, to increase international arrivals to their respective countries.
2.3 The Committee held a different view and is of the opinion that the proposed deal will not benefit tourism and the funds can be better utilised in other aspects of tourism marketing initiatives. In addition, the Committee is concerned about the R31.3 million facilitation fee to be paid to an agency, in which the resigned Acting Chief Financial Officer has a conflict of interest. The said amount is due by 31 March 2023 to the facilitating agency as an upfront payment.
2.4 South African Tourism was advised to stop this deal henceforth. It was, however, reported later in the media that South African Tourism is forging ahead with the Tottenham Hotspur three-year sponsorship deal despite a recommendation by the Committee to cancel it.
2.5 In the meeting of 21 February 2023, the Committee wanted to establish the veracity of the reported information on whether the Tottenham Hotspur sponsorship deal is going ahead. South African Tourism confirmed that they were going ahead with the project, thus disregarding the proactive oversight work of the Committee.
2.6 The Committee also observed that South African Tourism has experienced a deluge of institutional instability incidences at a Board and at executive management level since the beginning of the 2022/23 financial year.
2.7 Since June 2022, the Entity was governed by an Interim Board which was replaced by the Board concurred by Cabinet on 19 October 2022 and gazetted by the Minister on 8 November 2022 in Gazette no. 47474. The Committee had thought the leadership instability had been averted when the Board was gazetted.
2.8 However, there has been glaring instability at a Board level since the inception of the Board gazetted in November 2022. This has been evidenced by the change in Chairpersons, with the institution having been led by the three Board Chairpersons between October 2022 and February 2023.
2.9 When the Board was constituted it was led by Dr Nondumiso Maphazi, with Dr Aubrey Mhlongo as a Deputy Chairperson. The Committee then learned that Dr Nondumiso Maphazi was removed and Dr Aubrey Mhlongo was made a chairperson. At the meeting of 7 February 2023, the Committee learned that Dr Aubrey Mhlongo had also been removed and Dr Thozamile Botha is now the new Chairperson.
2.10 The Committee also learned with concern that three Board members who were gazetted in November 2022 had resigned in February 2023, with immediate effect. The names of the members who resigned are Mr Enver Duminy, Mr Ravi Nadasen, and Ms. Rosemary Anderson.
2.11 The Committee also became aware that another Board Member, Ms Pretty Ntombela, has been asked to step down by the Minister, citing issues with her vetting process.
2.12 The Committee learned that the Minister rushed the appointment of the four new members, namely, Dr Thozamile Botha, Ms Gopoul Reddy, Mr Boy Manqoba, and Ms Maudline Mabi from which the new Chairperson, Dr Thozamile Botha was appointed. This is a cause for concern as Dr Thozamile Botha was not in the original cohort of Board members gazetted in November 2022, but now leads the Board.
2.13 At an executive leadership level, there has also been instability, with the Chief Financial Officer having resigned, an Interim Chief Financial Officer appointed and now that Interim Chief Financial Officer has also resigned, an Acting Chief Financial Officer has been appointed. The Interim Chief Financial Officer resigned after being issued with a letter by the Board to provide reasons why he should not be suspended. The letter was issued after it emerged that the Interim Chief Financial Officer allegedly had a conflict of interest with the agency that is facilitating the Tottenham Hotspur sponsorship deal, and could potentially benefit from the payment of the R31.3 million facilitation fee. A facilitation fee was denied by the Entity, as the Interim CEO categorically stated that “no agencies” or third parties were involved as middlemen in the deal.
3 RECOMMENDATIONS
Having considered the pertinent issues to the Tottenham Hotspur Sponsorship deal and instability at South African Tourism, the Committee recommends as follows:
3.1 The Minister of Finance and the President of the country should place the proposed deal between South African Tourism and the Tottenham Hotspur Football Club on hold as the Committee considers it is as not in the best interest of the tourism industry and the country.
3.2 The available R910,997,814.75 that has been earmarked for the Tottenham Hotspur Football Club be reprioritised to tourism infrastructure projects which are currently dilapidated or other pressing needs of the tourism sector.
3.3 The reasons for resignation of Mr Enver Duminy, Mr Ravi Nadasen, and Ms. Rosemary Anderson be investigated.
3.4 An investigation be conducted into the process of appointing the new South African Tourism Board members Dr Thozamile Botha, Ms Gopoul Reddy, Mr Boy Manqoba and Ms Maudline Mabi from the time of resignation of Mr Enver Duminy, Mr Ravi Nadasen and Ms. Rosemary Anderson.
3.5 The new Board Chairperson, Dr Thozamile Botha, was not duly appointed as a South African Tourism Board Chairperson as he was appointed by the Minister without having been gazetted and should be removed with immediate effect and a new Board Chairperson be appointed after a due process has been followed.
Report to be considered