Boxing South Africa Quarterly Report
Sport, Arts and Culture
13 September 2006
Meeting Summary
A summary of this committee meeting is not yet available.
Meeting report
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.