Current Rugby Matters: briefing by Eastern Province Rugby Union and South African Rugby Union

SPORT AND RECREATION PORTFOLIO COMMITTEE
25 October 2006
CURRENT RUGBY MATTERS: BRIEFING BY EASTERN PROVINCE RUGBY UNION AND SOUTH AFRICAN RUGBY UNION

Chairperson: Mr B Komphela (ANC)

Documents handed out:
Task Team Presentation to Rugby Stakeholders on Eastern Province Rugby Union Poor Administration
Part1 & Part2
Presentation to the Eastern Province Rugby Union and other Stakeholders

SUMMARY
The Eastern Province Rugby Union presented their explanation of the events leading to the current state of affairs. A group of clubs was trying to influence matters in the province, but conditions were not chaotic. No proper discussion had been held. Clubs had approved a league structure but some had subsequently withdrawn claiming that this was done on racist principles. A forensic audit had revealed possible financial mismanagement, and this matter had been handed over to the police. A court hearing was expected shortly.

The South African Rugby Union could not agree that it was the cause of the chaos in the Eastern Province. The history of the problems in the area was detailed. Their feeling was that the provincial executive should step aside while the situation was corrected.

A number of questions of clarity were asked and it was clear that the matter needed extensive further investigation. The Committee directed that the South African Rugby Union should dissolve the Eastern Province Rugby Union executive and appoint an interim administration with a view to elect a new executive when the situation had been normalised. It also instructed the Nelson Mandela Bay Metro not to write off a debt owed to it by the Union.

MINUTES
The Chairperson stated that the meeting had been called to discuss the problems being experienced in Eastern Cape rugby. Parliament had agreed to spend R22 000 to send a delegation of the South African Rugby Union (SARU) to the Eastern Cape. However, the problems had escalated in the last few weeks. The Committee could not ignore these issues.

The Eastern Cape Rugby Union (EPRU) had shown an incorrect tendency. People tended to go to the Department of Sport and Recreation (SRSA) with different views. In terms of the Constitution Parliament needed no favours when summoning people to attend meetings. In fact, people failing to answer a summons to the Committee could be charged with contempt of Parliament. People should note the authority of the Committee. A discussion with the fourteen provincial presidents had been held recently. Some of them had thought they needed to meet with the Minister and did not need to appear before the Committee. The Minister had no authority over Parliament, but was accountable to the body.

The Chairperson said he would see if persons went to SRSA or other bodies with other views. A meeting had been held in Port Elizabeth. Subsequently five delegates had gone to SRSA with views contrary to those expressed at the meeting.

He said that letters had been sent to SARU and EPRU the previous week, and he was pleased to see that both delegations were present. There were a number of issues to be interrogated from both the national and provincial bodies. The President of EPRU had written the Chairperson a letter. He respected his decision but would not let this influence Parliament. This was a very important meeting.

The Chairperson reminded the meeting that Parliament had fought for the Eastern Cape Super 14 franchise in Parliament. The Committee had not shifted its view on this issue. There empirical reasons for this support, and the Minister would not change his mind.

The Chairperson said that this meeting needed to check if there was cohesion and understanding of the problems. The Committee would be visiting Port Elizabeth in November. If SARU was unable to exercise leadership and control, then the Committee would have to help. If matters were then taken to court, then so be it. He stressed that no private entity could be allowed to cause chaos. He also told the delegations that only executive members of their organisations would be allowed to address the Committee.

Mr J Prinsloo (CEO, SARU) introduced his delegation. He apologised on behalf of the President of SARU who was attending an important Board meeting in Johannesburg. SARU was a national sport body. It did not belong to the executive but was responsible and accountable to all South Africans.

The Chairperson said he would have the information communicated to the Minister, together with the minutes. He wanted to find out what were the issues that were causing rugby to be brought into disrepute in that area. He would give SARU an opportunity to respond, but he first invited EPRU to state its case.

Mr Pat de Silva (President, EPRU) said he did not know where to start. There were two totally different battles raging in the Eastern Province (EP). The first issue was that of the Spears franchise. The other was the upcoming election for the EPRU executive. There was always strong canvassing at this time together with mudslinging and the formation of camps. This was acceptable in any democracy, and was in accordance with the Constitution. This happened every second year. However, some mischievous people had jumped onto the bandwagon and were sensationalising the issue.

He said that the problems were not insurmountable. The history of the Eastern Cape (EC) was full of divisions and breakaways, and many tombstones in graveyards were monuments to these events. Issues should be solved in the boardroom. However there was some negativity, and power hungry people were sabotaging the EPRU. A certain group had placed nine or ten grievances on the table. They had been given prominence at national, provincial and local level, and none of them had turned to the legitimate body, which was EPRU,  to solve the problems.

Mr de Silva stated that there was a wrong perception. The EPRU had 102 affiliated clubs. A message had been circulated that fifteen clubs had attended the last meeting, where all three tiers of government and the mother body, SARU, had also been present. The facts presented had not been tested, and there had been no consultation with the EPRU. He asked if genuine clubs had been represented or whether there were some defunct clubs amongst the fifteen. Honourable people had attended and given credence to the meeting.

On the Spears issue, Mr de Silva said there was a very wrong perception that EPRU was the Spears. This was not so. EPRU was one of three shareholders. They had seen feeble attempts to stop the Spears. The EPRU had decided that the Spears were of utmost importance to the EC as a whole and that they thus needed the opportunity. However, this was not the be all and end all of EC rugby. There would be benefits for all three unions in the EC.

He said that it was on record that SARU had been active in the townships of Port Elizabeth. They had attended funerals and had there encouraged clubs to take over the EPRU. The reason was coupled to the debate over the Spears, as EPRU was the only of the three EC provincial unions that was firm on the Spears issue. Black clubs were told they needed to take over the province, and in fact this had been published in the media. This was a major cause of instability, and SARU was responsible.

Mr de Silva said he believed there were three different expressions. The EC was a depressed area. There was an allegation that there was absolute chaos and anarchy in the area. EPRU would welcome a visit from the Committee to show that EPRU was a stable organisation. Anarchy and chaos had been engineered to give support to SARU’s case that the Spears were not viable. This matter was soon to be heard on appeal. He believed that after a meeting with the clubs the previous Saturday SARU had asked the EPRU executive to resign. The clubs had rejected this call, and felt that SARU was responsible for this move.

The second expression was that there was no respect for the EPRU constitution. Therefore the mother body, without consulting the clubs, had invited SARU to visit the area and talk directly to affiliated clubs. There had been no answer from the mother body on this matter.

The Chairperson said that he would invite other delegates from the EPRU to address the meeting.

Mr Freddie Makoki (Vice-President, EPRU) thanked the Committee for the opportunity to address them. This chance had not been afforded them locally. They had never been asked by the mother body to verify the claims made. Club rugby had started in February. All township clubs had been called on in response to the Minister’s call to revive club rugby. Tournaments had been played before the season began in April. The EPRU had asked clubs what they thought the format should be. The Grand Challenge had taken place between April and July. After this, a secondary competition had been proposed. Teams were divided into three areas, namely Northern, Suburbs and Town. Clubs felt that this would bring people back to the game, as there were few people attending club matches. When this regional competition was about to start, the Spring Roses, a black club, had said they would not play in a racially oriented competition.

The Chairperson remarked that this was the beginning of the problem.

Mr Mokoki continued that 24 clubs had been grouped into areas. Only Spring Roses had said they did not want to play, and the African Bombers club had later joined them. There had been a directive from the Minister’s office to revive club and school rugby. There would have been a meeting the previous Friday. He had heard that the meeting had been called by the concerned group of clubs. They had wanted to take the black clubs away from EPRU and form their own union. He said that he thought about fourteen clubs were involved. He had learned that some of the people involved were not from clubs, and that only three clubs had been represented at the meeting. There had also been a meeting the previous Wednesday,.which had been attended by the mother body and some of the government structures.

The Chairperson said he had a list of sixteen clubs whose delegates had signed the attendance register, which he would provide to the EPRU.

Mr de Silva did not complain about the situation. As President, he was the political head of the organisation and was there to lead the body. He had to take responsibility. It was up to him to explain what the problems were, but he had said nothing. He could not just complain that there were problems.  The members were not children. Everybody was saying that there were problems, and Mr de Silva should take the members into his confidence to explain the situation.

Mr M Dikgacwi (ANC) wanted to find out how creditable the leadership of the Rugby Union was. He asked if they enjoyed the support of the religious sector, the community or broader society. Archbishop Tutu had attended the Currie Cup final in Bloemfontein recently, and Mr Dikgacwi took this as a sign of support. It seemed that rugby was separated from the broader EC community. He noted that there were 102 clubs in what was a vast province, including areas such as the old Transkei. He asked if Mr de Silva represented the whole EC province or just a section. He noted that the fifteen clubs had been supported by everybody, and asked what had been done to engage with them. Mr Makoki had spoken about a program within the African community. This was taking the sport back to the days of SA Rugby Association, the Federation and SA Rugby Football Union. This program was therefore based on racial boundaries. He asked if this was part of the new South Africa. He could not see this as a component of a non-racist country, and was a sign that the body wanted to take the country back to the old order.

Mr R Reed (ANC) said that rugby was once again being played on racial lines, and this flew in the face of the transformation program.

The Chairperson had not heard clearly if rugby was racially divided. He understood it was not, and that the fixtures were not drawn up on a racial basis. If they were, then this could not be so. He understood that the teams were not racially based.

Mr Makoki said he would need some time to clear up the misconceptions. The meeting was talking about the Eastern Province only. Border was a separate union within the EC, and also had about one hundred member clubs.

The Chairperson raised the issue of provincial demarcations. He said that these little pockets of apartheid must end. This issue was creating problems.

Mr Reed said that fact was that EPRU was blaming its mother body as being the cause of all problems. He asked if they had ever met with SARU to discuss this issue, or if this was the first occasion. The Minister had said that club rugby must be revived. Rugby was well received in the EC. In Port Elizabeth alone a number of unions had existed under the previous dispensation. It was strange that club rugby could no longer draw spectators. It was no use organising competitions in the township. The EPRU had to address the problem of the decline in spectator numbers.

Ms M Ntuli (ANC) said that EPRU should check if these problems only prevailed in the run-up towards elections. She asked if such problems also occurred at other times. They had been invited to a meeting on 16 October. She said that EPRU should check its constitution regarding the terms of office of its executive members. She asked if members could serve life terms, or if there was some constitutional limit. She asked if the Spring Roses club could justify boycotting the competition if they felt it was arranged on a racist basis.

Mr L Lukai (Chairperson, EC Provincial Legislature Portfolio Committee) told the EPRU leadership that they should have been ready for this meeting. A written submission should have been made which would have tabled the different problems.

Mr de Silva told the Chairperson that there was a submission, but due to the delays earlier in the morning this had not been distributed. He would provide members with copies.

He said that he should brief the Committee on the present situation. He was not intent on hiding the problems. The biggest of these at present resulted from the two or three audits into EPRU affairs. It had emerged that there was certain prima facie evidence of mismanagement. Three advocates had been appointed to interact with these findings. On their recommendation the case had been handed over to the SA Police Services (SAPS) and prosecuting authority for further investigation and the laying of charges if appropriate. The SAPS process had been delayed. This was creating a bad stigma regarding the competencies of the EPRU leadership. There was an impression that EPRU was doing nothing.

Mr de Silva had taken over office some two months previously. This pending investigation was a major problem for the EPRU. The Union needed funding, sponsorships and lottery grants. All of these were being withheld while the court case was still pending. During a meeting with SARU he had appealed to them on three or four occasions to resolve the acrimony between the two bodies. Their relationship needed to be rebuilt. He also asked SARU to provide support by putting pressure on the investigators to proceed with the case, as this was a huge block on EPRU. Mr Prinsloo could report on this. A court date had been promised.

The second issue was the reviving of clubs. There were many reasons for the demise of the old clubs. He had experience himself with the Swans club, which was no longer in existence. This decline was not due to bad leadership, but to many other factors. These included forced removals, financial problems and the growth of soccer. No rugby was played at schools. It was not the fault of leadership, but EPRU was failing in that the sport could no longer attract players. He thought EPRU was credible. They had held meetings with different shareholders such as the clubs and Spring Roses in particular.

The third challenge seen by Mr de Silva was the vast area of the province, which ranged from Adelaide to Grahamstown to Misgund to Middelburg. Sub-union structures existed in these areas. Some clubs had two teams and some only one. There were 102 registered clubs that had fulfilled their fixtures.

On Wednesday 16 October the EPRU had asked to meet with the task team. A time had been set but the meeting was postponed on the day before it was to happen. There had been a meeting with SARU where solutions to the problems were discussed.

Mr de Silva said the question of the falling spectator numbers was a study on its own. This was common to all sports. It was well known that divisions existed, and these became more prominent as executive elections approached. Members of the executive served a two-year term, and could be elected for a second term.

Mr de Silva then stated that all clubs had met at the end of 2005. They had decided on the competitions for 2006. Different problems were foreseen by the clubs and the fixtures committee. SARU fixtures started in June or July. EP had no contracted players and no professional team. Their players were all amateurs who had their own employment and only received match fees and expenses, and were all selected from the clubs. Currie Cup, rural, Under 19, Under 21 and women’s fixtures started in June or July. If players were selected to represent EP, then their clubs would be granted postponements. This made if very difficult to run their normal league structure during this period. The clubs had therefore decided that after the first round of fixtures, the clubs would play within their geographic areas. This would save on transport and other costs, and games would also be played in the areas where spectators were resident.

Mr de Silva said that all the matches in the Uitenhage area had been played and the competition there had been a huge success. The Northern area games had also been very successful, with spectators returning in their droves. However, Spring Roses did not take part even though it was explained to them that this was not an EPRU decision but had come from the clubs. The African Bombers club had asked to play on Sundays, but had later decided to withdraw from the competition. He stressed that the province took care of these clubs. Their players and officials were still selected as part of the various provincial teams and there had not been a fight between Spring Roses and the EPRU.

Mr Lukai asked if the findings of the three advocates had implicated any persons. He asked what actions, including internal actions, had been taken. He asked what leadership had been exhibited by the EPRU.

Mr de Silva replied that when the reports were finalised they had been sent to the EPRU (Pty) Ltd. The only persons implicated were the CEO and Chairman of Finances, who were employees of this company. These reports were forwarded to the SAPS. The EPRU still supported this decision, and no members of their executive had been implicated.

Mr Prinsloo said that SARU had problems in the EC, therefore the scheduled meeting had been cancelled. He could not agree that SARU was the cause of the chaos in the EP.

The Chairman told Mr Prinsloo not to be polite about the issue as EPRU was saying that SARU was the literal cause of the problems.

Mr Prinsloo reaffirmed that SARU was not part of the problem. Various meetings had been held in the EC. This was a very important issue for South African rugby and to the country in a broader context. The problem was within EP, and he wondered if even the executive’s eyes were still on the ball. He had been at the meeting on 16 October, and the clubs attending had all signed the register publicly. The group of clubs had said that they had problems and wanted to solve the issues.

He then asked if SARU could interfere in the situation. In terms of its own constitution, the national body could intervene under a number of conditions. The EC was a major concern for SARU. Therefore the SARU Management Committee had asked the EPRU executive to resign. The issues had to be resolved before a new election could be held. An election under the present conditions would not solve the problems.

Mr Prinsloo noted that there had been an 8% growth in the game in the province at both junior and senior levels. In 2004 a letter had been sent to SARU to ask them to get involved in developments in the province. A task team had been commissioned to investigate, and had submitted a report. Members of this task team were appointed locally,  including Mr de Silva. Other letters had also followed and a caretaker administration had been appointed which was subsequently withdrawn. Price Waterhouse Cooper had been appointed to undertake a forensic audit. He felt that SARU had gone the extra mile to resolve the problems.

Mr Prinsloo said that EP’s vision was to be one of the top rugby provinces in the world. This would not happen if the problems were not resolved, and SARU had therefore entered into the fray. They had found that the concerns were genuine. An amount of R6.7 million had been given to the province and R 4.85 million to the Spears during the year. While the court case regarding the Spears was still ongoing, the franchise should not disappear. However, SARU felt that they were not ready to play at a high level yet.

Mr Louw noted that SARU seemed reluctant to act. Their own constitution permitted them to take action. From what had been said, there had been no suggestion that SARU would indeed act on the matter. Their version was totally different to that of EPRU. They knew the seriousness of the problems both in terms of politics and administration. As elected leaders, the SARU executive had been chosen to lead. They were now only leading but not giving leadership, which sometimes required unpopular decisions to be made. Meetings, workshops and programmes had all been conducted but tangible action was now needed.

Mr C Frolick (ANC), said that he had been summoned to a meeting with the then Chairperson of the Standing Committee on the EC Legislature. The then President of SARU, Mr Brian van Rooyen, had attended and he thought Mr Prinsloo had also been present. SARU had said that they could not allow the situation to deteriorate. A calculated risk had been taken to allow EPRU to sort itself out. Various reports had followed. The King 1 and 2 Commissions had reported on the governance and responsibilities of sports bodies. EPRU was responsible for good corporate governance.

He asked what had changed since then. If there had been no improvement, he asked if the situation could be allowed to continue. Local and provincial government members had been at the meeting. No invitation was needed if these people were acting in the line of duty. The big picture did not look good.

Mr Frolick said that the same local government had been instrumental in getting two rugby Tests to be played in Port Elizabeth. Attendance had not been good. He asked if the strategies had been successful. He was left astounded by the reference to local government. EPRU was indebted to the Nelson Mandela Bay Municipality to the tune of millions of Rand. Local government had been told not to write off this debt unless an acceptable turnaround strategy was put in place. Appropriate action would be taken if needs be. The EPRU must serve the community.

Mr Lukai asked if SARU had commissioned the forensic audit. He asked why they had not acted on this matter. He also asked what powers SARU had in the event of defiance by an affiliate. The wrong precedent was being created. He asked if the constitution was so flexible as to allow this situation. His question to EPRU about internal action against employees had not been answered. The right signals had to be sent to other provinces.

Mr A Mlangeni (ANC) thought that the matter should go to court, as there seemed that there was nothing else to be done.

Mr Prinsloo said that both SARU and EPRU had experienced changes in leadership. He agreed that his executive had dragged its feet. The matter should have been addressed long ago. He had seen the prosecutor dealing with the forensic report, and he believed that there was indeed prima facie evidence of mismanagement. The press had asked the same questions. He believed that prosecution would happen before the executive election. The new President of SARU wanted to get to the bottom of the matter. They had tried their utmost to assist and had therefore requested the EPRU to step down. They would now take the issue further. It was time for agreement. The EP leadership must tell SARU what was to be done, and a committee should be formed to deal with the situation.

Mr de Silva believed that, as the CEO was an employee of the company, it had handed the report over to SAPS. They had thought that an immediate investigation and prosecution would follow. EPRU was represented on the commercial company but did not control it.

The Chairperson concluded that EPRU leadership could not deal with the matter as it was company business. He asked if the company was separated from the EPRU.

Mr Mvelelei Ncula (Deputy CEO, SARU) said that the situation with SARU was that their commercial arm was the SA Rugby Board. SARU was the sole shareholder in the commercial arm, and thus had total control. The provinces had made similar arrangements. Both the provincial and commercial arms would have CEO’s. In the EP, the same person held both offices.

The Chairman invited the members to ask questions of clarity from SARU.

Gen B Holomisa (UDM) said that the major problem appeared to be that a new structure could not be elected while the problems still existed. He suggested that SARU appoint an administrator to work with the existing structure and with the other factions. He saw that even the league was based on racial lines. The meeting was being misled. He made a strong recommendation that SARU intervene. SRSA could also monitor the situation.

Mr Louw had a question for SARU. He suggested that the EPRU structure be dissolved. SARU should appoint an interim management. SARU had to show integrity, guts and that it cared for rugby in the country. A no prisoner approach must be followed.

Mr Dikgacwi commented on the issue of the change of leadership. The property of any company or organisation remained in place even if there was a change of personnel. This was a flimsy excuse that he would not buy. He asked if the constitution of the EPRU was above that of SARU. He challenged the credibility of the EPRU leadership. They had not attended the meeting on 18 October. The National Coordinating Committee (NACOC) and everybody else had been there. EPRU did not want to be part of the solution. Spring Roses and African Bombers had withdrawn from their own functions. The use of racial boundaries could not be allowed.

Mr Reed aligned himself with Gen Holomisa and Mr Louw. The whole issue resulting from the meeting in 2003 had been left to the incumbent executive. Three years later the problems had not been attended to. There was no way that the current leadership could be allowed to continue. He blamed SARU for not implementing its own decision. There were a range of issues, which included financial mismanagement and the introduction of a racially divided league. This was not the situation of the past. A steering committee rather than an administrator should be appointed until a new executive could be elected.

Mr Frolick believed that SARU should appoint an administrator. He mentioned a number of candidates including Mr Cheeky Watson. Previously Mr Gary Boshoff had been appointed as a caretaker administrator but had received no support from the EPRU executive. He proposed that the current executive should be dissolved. The election scheduled for 18 November should also be cancelled. The SARU administrator should be in charge for a two-year period. He could not see how the situation could improve otherwise.

He held SARU responsible for development, for the administration of day-to-day affairs and for the administration of finances. The EPRU was in a situation where the municipality could apply for their liquidation to pay their bills. Things could not continue in this vein. He was a man from this area but could no longer support his friends. A R1.1 billion stadium was being built for the 2010 World Cup, but hardly any spectators were attending matches at the current venue. Rugby and other bodies would have to contribute towards the maintenance of the stadium after 2010, and EPRU would be unable to fulfill their obligations given their current situation.

The Chairman said that members had raised their views. There was no sharp difference to the views expressed by Gen Holomisa and Mr Louw. Mr de Silva had said there was no state of depression, chaos or anarchy in the province. The Committee took the matter in a serious light. Mr Prinsloo created another dimension by explaining the developments since 2003. SARU was battling to bring stability to the province. The EPRU was a completely arrogant organisation that showed a lack of organisational discipline. The procedural way to deal with disputes had resulted in chaos. This was contrary to the EPRU view.

He had spoken with Councillor Nancy. A huge amount of EPRU debt to the municipality had already been written off, but EPRU was still in debt by R 4 million. SARU had made a big mistake by transferring R 6.7 million to EPRU, as R 500 thousand was still owed from the Test match played in Port Elizabeth. SARU was not getting value for its money.

The Chairperson instructed the Committee Secretary to tell the Nelson Mandela Bay Municipality not to write off any more EPRU debts. The union had to settle these. He then issued a directive to SARU to dissolve the EPRU executive. A meeting with SARU would be arranged one month later at which it would have to brief the Committee on developments. The Committee supported SARU in its mission.

The meeting was adjourned.