SA Rugby poised to grab control of Kings
● Dramatic ‘takeover’ follows months of tensions between union and embattled franchise
Eastern Cape rugby is in turmoil after it emerged that SA Rugby is poised to stage a dramatic administrative takeover of the cash-strapped Isuzu Southern Kings today.
The long-term future of the underperforming Kings is unclear, and SA Rugby are expected to spell out their plans for the troubled team after they have spoken to the franchise’s staff.
Kings media officer Chumani Bambani directed queries about the Guinness PRO14 team to SA Rugby headquarters, which suggests the franchise has lost its autonomy.
SA Rugby Union media officer Andy Colquhoun said: “SA Rugby is engaging with the Southern Kings and its minority shareholder, the Eastern Province Rugby Union, to address the challenges faced by the board.”
EP Rugby Union president Andre Rademan said he could not comment on a mooted SA Rugby takeover.
“I have absolutely nothing to say at this point,” Rademan said.
This could be SA Rugby’s second administrative takeover of the franchise in less than five years, after they assumed control in 2016 under similar circumstances.
If Saru take control it will end the short reign of the Greatest Rugby Company in the Whole Wide World (GRC) which took over the franchise last year.
The embattled franchise, which failed to pay administrative salaries on time in April, has endured tough times in the boardroom and on the field.
After being saved by a R6m bailout by the metro, there were fears the Kings might face similar cash flow problems in the months ahead.
With Kings set to be part of PRO14’s restart plans, SA Rugby were concerned about players going unpaid during or after the restart.
The Kings are next set to be in action against the Cheetahs in Port Elizabeth on August 22.
The team have a woeful record in the PRO14.
They have won only one of the opening 13 matches and are bottom of the log.
It has been reported that the SA rugby players’ union, MyPlayers, wrote to SA Rugby asking them to step in to avoid more late payments.
Less than two weeks ago, SA Rugby CEO Jurie told media that the only way the rugby governing could intervene would be if the private equity shareholders — the GRC — broke clauses in its agreement such as failing to avoid going bankrupt or not paying salary bills, SARS or suppliers.
It has emerged that the GRC, led by chair Loyiso Dotwana, brought in no investment capital of their own, but signed an agreement to inherit the R45m debt the Kings owed to SA Rugby.
Conditions of the deal were that the GRC services the debt by paying R5m annually, every September, until the debt was cleared.
Insiders say the GRC defaulted on their very first repayment and did so again in February, after SA Rugby extended their deadline.
Earlier this month it was revealed that prominent Eastern Cape businessmen Gary Markson and Kenny Govender had resigned from their positions as members of the Kings business consortium.
Last week, the rift between the Kings and their minority shareholders the EP Rugby Union widened further when a second scheduled shareholders’ meeting collapsed at the last minute on Thursday.
Tensions between the two parties had been at boiling point after a series of disagreements over the manner in which the franchise is run.
EP claim they are kept in the dark when key decisions are made.
The EPRU had wanted to view the Kings’ financial statements for the past six months and also interrogate the franchise over their poor performance in the PRO14.
EPRU officials have also taken umbrage at claims they tried to block an extra funding payment of R6m to the Kings to solve a cash-flow crisis that resulted in the late payment of salaries to players.
Dotwana did not respond to queries from the Herald as to why his franchise had withdrawn from the meeting.
The Kings have drawn a veil of secrecy over their dealings with the media in recent weeks.
They also failed to respond to queries regarding the resignations of Markson and Govender.