Boxing South Africa Quarterly Report

Sports, Arts and Culture

13 September 2006
Share this page:

Meeting Summary

A summary of this committee meeting is not yet available.

Meeting report

SPORT AND RECREATION PORTFOLIO COMMITTEE

SPORT AND RECREATION PORTFOLIO COMMITTEE
13 September 2006
BOXING SOUTH AFRICA QUARTERLY REPORT

Chairperson: Mr BM Komphela (ANC)

Documents handed out:
Boxing South Africa: presentation (see Appendix)

SUMMARY
Boxing South Africa reported on the Leila Ali issue. All issues within the control of Boxing SA had been arranged and the World Boxing Council had sanctioned the fight, but the tournament was cancelled because of unrealistic demands by her manager. Attempts at saving the fight had also been fruitless.

The budget was presented. Major sponsorships had been lost and government was asked to provide financial aid. As the organisers of a professional sport, the body was expected to be self-funding. A new Chief Executive Officer had been identified and would be appointed shortly. The Chief Financial Officer would also have to be replaced. The state of administrative and financial affairs was improving.

Members expressed concern over the small budget. It was agreed that financial aid was needed, and a more realistic budget should be presented. A progress report would be expected at the next quarterly meeting.

MINUTES

Adv Dali Mpofu, Chairperson, Boxing South Africa (BSA), reported that he had had a fruitful meeting with the Minister. Some key issues had been cleared up. Boxing was now moving away from the survival mode it had occupied for some time towards a phase of growth and development. Tournaments were continuing. A forward looking approach was being taken regarding finances, but this was always a problem. On the management front, the positions regarding the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) had to be settled. Sponsorship was also a problem.

Collapse of Leila Ali fight
He said that the Leila Ali issue was an isolated incident. It was an unfortunate but normal occurrence in the sport, and had been blown out of proportion. Squabbles over money were commonplace, and this is what this particular matter came down to. BSA had tried to salvage the situation, but it was probably the best solution to cancel the tournament. The only issue for which BSA was answerable was the issue of the licence to the promoter. The dispute was between the Ali camp and the promoter.

The bout had been planned for August, and was to be a showcase event for women’s professional boxing. The issue over the promoter, Mr Manyati, had been raised with his colleagues. This promoter was not in good standing. The issue had been raised in April. He had been accepted as the promoter on condition that some R36 000 which he owed to BSA be paid, as he was not in good standing at the time. This money was paid in during May 2006, and the licence was duly issued. Officials of BSA had been briefed to watch the arrangements carefully. BSA had reported to government, and all had seemed to be in order. The Department of Sport and Recreation (SRSA) had agreed to help with the promotion, especially as it was Women’s Month.

Adv Mpofu told the meeting that the Ali camp had arrived earlier than expected, and that the entourage was bigger than planned. This resulted in financial complications. A disagreement over payments had ensued. Mr Manyati could not cover these expenses, and had been evasive. The relationship had broken down. BSA had then asked more reliable promoters to rescue the fight in order to preserve the image of the sport. However, they felt that Ali’s demands were unrealistic, and that it was best to move on.

The Chairperson said that the problem had been referred to Parliament because of the Boxing Act. As BSA was a statutory body, Parliament was the custodian of the sport. An individual had used government entities to assist his enterprise, and some accountability was therefore essential. The Committee could not follow the chorus, but must investigate the issue. The opportunity was taken to discuss this issue and to integrate the discussion with the quarterly meeting.

Mr J Masango (DA) agreed that the matter should be dropped. He asked what lessons had been learnt, and what measures would be taken to prevent this kind of incident from happening again. He also asked how an SRSA letterhead had come to be used by the promoter.

Mr T Louw (ANC) asked about the rescue plan, and if this meant the fight could still happen. He asked if BSA would be involved.

Ms W Makgate (ANC) said she understood the situation but her question was if BSA was evading the issue because it was a women’s tournament.

Adv Mpofu replied that BSA had considered it a good idea to arrange a tournament for women, and had therefore given extra support. They had put in measures in tournaments such as the Baby Champs League to encourage women’s boxing, as well as giving incentives to promoters to include female bouts. Promoter Rodney Berman had been approached as part of the rescue plan, but BSA needed to be convinced that this would not be a get rich quick scheme. Promoter Branco
Milenkovic had been asked to intervene earlier, but he reported that no promoter would accept the conditions imposed by Ms Ali’s team. The question of the letterhead was in the public arena, and SRSA was investigating. The use of SRSA’s letterhead in conjunction with the promoter’s details was probably not legal. The preparations had been hyped up because of the prestige of the event, and the collapse had been that much bigger because of this. BSA had been strict with the promoter’s pedigree as he had a shady history.

Mr Loyiso Mtya (Public Relations Officer, BSA) said that the first condition for approving the Ali fight had been the building of women’s boxing. The best fighters had been chosen for the supporting card, which would have been of a pro-am nature. Therefore BSA and the amateur body,
South African National Amateur Boxing Organisation (SANABO), had been jointly involved. Eight women boxers had been selected including fighters from Nigeria and Namibia. Mr Branco Milenkovic was one of the most experienced promoters, especially in the field of international television coverage. He had been asked to guard BSA’s interest in this regard. Mr Milenkovic felt that the requests of Ms Ali made no financial sense.

Mr Mtya said that a meeting had been held with Mr Berman, who had said that he would meet with Ms Ali’s manager to discuss arrangements to stage the fight at a later date. A week later, the manager said he had not heard from Mr Berman. BSA felt the best approach was to step back while the parties negotiated a deal. Once this was concluded, then BSA would have offered its support. Mr Berman had subsequently talked to the press but no deal had been discussed. Although a tentative date was identified, Mr Berman subsequently arranged a different fight for the same date.

Adv Mpofu said that a media release to announce the Ali fight had been done during the Football World Cup in Germany. He had refused to attend this event.

Dr Peter Ngatane (Board Member, BSA) commented that there had been a misunderstanding. BSA was not aware of the program, but the office had to be tasked to find out what had happened. There had been disagreement over changes to the contractual agreements. He could not contact Mr Komphela, but had left a message with one of the Minister’s assistants. It seemed that this message was not passed on. BSA was involved in discussions, and was asked to play an oversight role by the World Boxing Council (WBC). The WBC was taking the fight seriously, and had appointed a top referee to officiate. There were no administrative problems with either the WBC or BSA arrangements. The promoter had lodged the required financial deposits with BSA.

Mr Mtya said the tournament had failed because the person providing the financial backing had withdrawn from the deal. This person had covered all the expenses to that point.

Mr Komphela said that the Committee accepted the explanation. It seemed that BSA had done its best to make the tournament a success, but it was obvious there was no love lost between the two camps. He was disturbed by Mr Mtya’s emotional comments to journalists, and felt that this situation could have been communicated much better. The point should have been made that the situation was beyond BSA’s control. People should have been informed of this. This was like the failure of the SA Football Association to own up to its responsibilities, or at least explain how external factors had affected the situation.

The Chairperson asked if there were any legal battles arising from this dispute. He asked what was being done regarding the expenses already accrued by the Ali camp, as it was not just Manyati against them. On the question of the letterheads, the Minister had reported to Parliament that he was checking how this had happened, and would report back. It might have been possible to save the fight if information had been provided earlier. BSA could not allow itself to be blackmailed, as the promoter was alleged to have tried to use as an excuse had he had not been awarded the licence because of the outstanding R36 000. He felt that BSA was acting on an ethical and principled matter. He asked about the politics in boxing. More people were interested following the Ali incident. He commented that it seemed the boxing world was a dog-eats-dog environment.

Adv Mpofu said that this was the nature of the sport, as it attracted some interesting characters. He had just seen a film on Don King, who was an extremely interesting character. There were politics in boxing as money was involved. It remained the sport of the poor. Some balance was needed, as there was ample room for exploitation. It was therefore wise for BSA to be controlled by the government. This was also necessary because of the dangerous nature of the sport. There would always be shenanigans.

Ms Makgate asked about the strategies for damage control. BSA should always hold a level above the promoters. There needed to be strength in international relationships.

Mr Komphela said that mistakes, like the Ali issue, should never be allowed to happen again.  BSA was in control, but it seemed that the relationship between the two camps had failed. BSA should apologise to the nation not because of their errors but because of the failure of the camps to reach agreement.

Adv Mpofu took the Chairperson’s point. However, he said that most of this information had been communicated by BSA’s Public Relations Officer. He had heard an interview conducted on Metro FM, but perhaps more could have been made of this process. He agreed that the matter should be allowed to die, as life would go on. This might have been a big issue in South Africa, but would not have been as significant in other countries.

Boxing South Africa quarterly report

Adv Mpofu then made a presentation on the state of affairs at BSA. Financial issues were foremost. The suspended General Manager had been linked to mismanagement, which had caused serious problems. The finances were now in a good state, but the report had only been completed after the deadline set by the Auditor General (AG). Sponsorships from Vodacom and Distell, both worth more than R1 million, had been lost. BSA was liable to pay VAT dues of R900 thousand, making up a total liability of R3.2 million. The lottery had approved R900 thousand, but this money was ringfenced for training. Potential sponsors had been approached as well as government.

The budget made provision for sanction and licencing fees of R1.63 million, of which R900 thousand was still outstanding. SRSA’s grant of R1.8 million was being paid in instalments. R900 thousand was expected from the lottery. Broadcast sponsorships of R888 thousand was being paid in instalments. A further R2 million was needed to replace lost sponsorship, and government would be asked to provide this. The annual expenditure was R7.218 million.

He said that the statements had been completed on 8 September, but the audited version was only expected on 13 October. After printing, the report would only be available by 1 November. The negative situation had been created by the previous management, and comments in this regard were expected from the AG. BSA had completed its own investigation. Statements by witnesses had been provided, and the previous General Manager would be charged. A lot of effort had been taken to get BSA’s affairs to this stage.

Mr Jos Steyn (Adminstrator, BSA) said that new controls had been introduced.

Adv Mpofu said that accounts had been changed and computerisation introduced. In the past, up to three months had elapsed before problems had become evident. There would now be compliance with the requirements of the auditors, and a segregation of duties. Ledger entries and records would be done. He said there were still three red light issues. These were the appointment of the new CEO, the replacement of the CFO, who had felt the need to leave and was soon to have her first baby, and a new staff organogram.

He said that the CEO had been an unfortunate saga. There had been miscommunication between BSA and the Minister. These issues had now been put to bed, and it was hoped that the appointment would be confirmed by 1 October. Interviews had been completed, but there had been costly and time-consuming delays in verification of information. The appointment of the CFO did not need ministerial approval, and this would be achieved with greater ease. This was all part of the recovery plan. The next six months would be critical, and he hoped that the office would be working normally by the end of March 2007.

The old Board had preferred to have service providers in the regions. This was a weak structure, and the new Board wanted paid employees rather. The Minister agreed with this thinking. The post of Public Relations Officer would be upgraded to General Manager: Communication. Government needed to provide money to clean up the shortfalls. It was hoped that a new sponsor would be on board by the start of April, and BSA needed to present an orderly house by the start of the new financial year. He hoped to report positively at the next quarterly meeting.

Discussion
The Chairperson asked if the operating budget included the salary for the CEO. He also asked what the level of payment would be for both the CEO and CFO, compared to other parastatals.

Adv Mpofu replied that budget did include salaries. The CEO would be remunerated at the level of a Deputy Director General, and the CFO at the level of a Chief Director. This was in part the reason for the request for financial assistance, and for the salaries of the regional employees.

Mr Komphela remarked that this was not much money. The restructuring of the office would cost in excess of the total budget of R7 million alone. The figures were not convincing.

Adv Mpofu replied that the CEO’s salary would be about R600 thousand per annum. The restructuring costs would be a once-off, and he felt that government should pay for this. The running costs would increase as employees were appointed.

The Chairperson said that BSA should conform to any other government entity. They could not operate within this budget, and the minimum should be R10 million. Operating costs were not reflected in the budget.

Dr Ngatane said that the situation was endemic. Board members often had to pay their own way to attend meetings.

Mr Komphela said that travel costs should be covered. The reality of the situation was needed.

Mr Louw suggested that a special meeting be held to address this issue.

Mr Masango agreed that more realistic budgeting was needed.

Dr Ngatane said that BSA administered a professional sport, and was therefore expected to be self-reliant.

The Chairperson said that BSA should be state funded like any other State Owned Enterprise. Costs should be covered at the very least. BSA had been established as an Act of Parliament.

Mr R Reed (ANC) said that there were many international boxing control bodies, and it seemed that BSA could not afford to pay affiliation fees to all of these.

Dr Ngatane replied that the various bodies were categorised according to their status. BSA was affiliated to four bodies.

Adv Mpofu said that BSA recognised all international bodies.

Ms Makgate said that BSA should go back and get all the details together. All costs should be factored in and the organogram should also be provided. It was unacceptable that BSA was unable to afford to attend international meetings.

Mr Louw asked how the financial situation was hampering efforts to help boxing in Africa.

Dr Ngatane replied that BSA did assist the African Boxing Union. BSA was often asked to help set up organisations on the continent. Individual board members often assisted from their own pockets, but help to Africa was indeed restricted. The current Portfolio Committee was the first to offer support, as previous Committees had taken the attitude that boxing, as a professional sport, should be self-sufficient financially.

The Chairperson said that the budget should make provisions for expenses such as attending the quarterly meetings with the Committee. If no help was needed, then the Act could be repealed.

Dr Ngatane reminded the meeting that the previous General Manager, Mr Naidoo, had raised a concern of the impact on BSA’s budget caused by the quarterly meetings when these had first been suggested. BSA was also being forced to change offices because of costs.

The Chairperson undertook to fund the quarterly meetings.

Mr Masango reminded the meeting that accountability was needed.

Mr Komphela asked BSA to bring a financial plan to the next meeting.

Adv Mpofu said that BSA would address the issues of control and budget at the next meeting. He was gratified for the approach of the Committee. Boxing was ultimately administered by the state, and the state should therefore assist.

The Chairperson asked BSA to send a break-down of expenses by the following week. This would be discussed in the ANC study group. They would consider the relevance of the Act, and BSA’s responsibilities. This exercise in determining the status of BSA would probably happen after the upcoming recess. However, BSA would not deserve any money if it was in a shambles. SRSA was reneging its monitoring responsibilities. The Committee would interact with SRSA on this issue. He wondered if SRSA thought BSA would survive on a mere R1.8 million.

Adv Mpofu admitted that the current Board of BSA had inherited a chaotic situation, but the chaos had now been ended. He paid tribute to the management of BSA in achieving this turnaround, and the Friday night television programs were enough tribute in that the sport is surviving. Boxing was now moving towards a growth period. The sport was close to the hearts of the people, especially the poor, and yet did not enjoy the same funding for sports such as rugby and cricket.

The Chairperson replied that the Committee had now gone beyond understanding the issues. Every question would lead to more enquiries. The situation would be monitored closely. The Minister had blamed BSA for the delay in appointing the CEO. The Committee had made enquiries into the matter. The Minister had said up front that no report had been submitted although Adv Mpofu had the report in front of him.

Mr Komphela said that boxing would move out of the incubator during 2007. BSA must however sort out their financial situation before aid would be advanced. More grants would necessitate more accountability. Physical and convincing steps were being taken, and BSA was acting in good faith. Some interaction had obviously occurred regarding the behaviour of boxers.

The meeting was adjourned.

 

APPENDIX

BOXING SOUTH AFRICA: PRESENTATION TO PARLIAMENTARY PORTFOLIO COMMITTEE SPORT AND RECREATION


13 Sep 2006


FUNDING REOUIREMENTS

 

Vodacom sponsor withdrew

R 1000 000

Distell sponsor withdrew

R1 300 000

SARS VAT assessment

R 900 000

SUBTOTAL

R 3 200 000

LOTTO grant expected

R 900 000

 

 

 

·         Currently approaching potential sponsors

 

FUNDING ANNUAL EXPENDITURE

 

Sanction + Licence fees

R 1 630 000

SRSA Grant     

R 1 800 000

TOTAL OPERATING EXP

R 3 430 000

LOTTO grant

R 900 000

TOTAL TRAINING EXP

R 900 000

Broadcasters sponsors

R 888 000

Other Sponsors

R2000 000

TOTAL PROJECTS+ AWARDS

R 2 888 000

TOTAL EXPENDITURE

R 7 218 000

 

 

 

 

 

 


FINANCIAL STATEMENTS 2005+6

 

Financials completed 

8 September

Auditor General - audited

13 October

Annual report to printer

20 October

Annual report issued

1 November

 

 

 

 


FINANCIAL CONTROLS 2006+7

·         Chart of Accounts enhanced to cater for costing reports on training + projects

·         Computerization of banking and general ledger input.

·         Compliance requirements audited

·         Segregation of duties revised to comply with PFMA controls

·         General ledger entries and recons done


BSA STAFF APPOINTMENTS

·          Appointment of the CEO

·         Replacement for CFO

·         New staff organogram

 

BOXING SOUTH AFRICA

 

Audio

No related

Documents

No related documents

Present

  • We don't have attendance info for this committee meeting

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: