EP Cricket under police investigation
Case of fraud and corruption opened over SA20 tournament deal
A Gqeberha law firm has released an explosive report into an alleged irregular memorandum of agreement between EP Cricket, Sun TV Network and Mega Sportz NPC for the inaugural SA20 cricket tournament earlier this year.
The allegations of a dysfunctional EP Cricket board and conflicts of interest are piling up, threatening the state of the sport in the province.
In the meantime, the police are investigating allegations of fraud and corruption.
Police spokesperson Colonel Priscilla Naidu confirmed a case was reported in January.
“The Mount Road commercial crimes task team is investigating a case of fraud.
“No-one has been arrested or charged and the investigation is ongoing,” Naidu said.
EP Cricket’s board is expected to convene for an urgent board meeting today.
The meeting is expected to include a lead independent director who served on two other boards (Mega Sportz and Cricket Eastern Cape, who manage the Warriors professional team), raising questions of a conflict of interest.
The board of EP Cricket comprises 13 independent and non-independent directors.
Eugene Jacobs, appointed from Northern Cape Cricket, has been the chief executive since August, while Leon Coetzee is the president.
Today ’ s special meeting comes after Pagdens Attorneys released a report into an alleged irregular memorandum of agreement last month, cited as the “SA20 recordal agreement”.
The report delves into the alleged questionable agreement between Sun TV, EP Cricket and Mega Sportz for the SA20 tournament played from January 10 to February 12.
Sunrisers Eastern Cape, owned by India-based SUN Group Private Limited, was the first team to win the SA20, contested by six SA teams.
In addition to Sun TV Network, SUN Group Private Limited owns Indian Premier League (IPL) franchise Sunrisers Hyderabad.
According to the Pagdens report, seen by The Herald, Mega Sportz, which the EP Cricket board formed as its financial arm, entered into a recordal agreement with Sun TV Network on December 29.
In terms of the agreement:
● Sun TV will lease the St George’s Park Stadium from EP Cricket for the duration of the SA20 cricket tournament;
● EP Cricket appoints Mega Sportz to provide management services and implement related commercial activities;
● The parties agree that the Venue Hosting Agreement be regarded as the “parent agreement” and the recordal agreement is subject to this; and
● EP Cricket in turn makes payments, as indicated, without any deduction to Mega Sportz within 48 hours in response to an invoice from Mega Sportz.
The written memorandum of agreement (MOA) between EP Cricket and Mega Sportz, as its associate company, was signed 15 months earlier on September 20 2021.
This was after four EP Cricket board members — Zakaria Limbada, Donovan May, Loyiso Nkantsu and Winston Simpson — assumed directorship of Mega Sportz on September 13 2019.
May, who took up vice-presidency at CSA in June 2021, signed the MOA on September 20 2021 on behalf of EP Cricket, accompanied by Limbada’s signature for Mega Sportz.
CSA established a Twenty20 franchise cricket tournament in 2022, subsequently calling it SA20, through a newly formed entity, Africa Cricket Development (Pty) Limited.
CSA has a majority 50% stake in Africa Cricket Development.
Pagdens, among its findings, resolved that the recordal agreement was entered into without the consent of Africa Cricket Development.
It said the recordal agreement stood in direct contrast to the Venue Hosting Agreement and the common law requirements for a valid assignment.
“At face value, the agreement presents as a valid and binding agreement,” the report says.
Much like the September 2021 MOA between EP Cricket and Mega Sportz, the agreement was signed by a director of EP Cricket for a property belonging to it, according to the report.
“Notably, the client’s current CEO, Eugene Jacobs, signed the recordal agreement.
“It ’ s doubtful the CEO would be mandated by the board to sign an agreement in direct contravention of an existing [MOA].
“However, the parties have acted in accordance with it during the SA20.”
The report concluded the recordal agreement was unlawful and should be set aside.
It said Africa Cricket Development, though unaffected, could retrospectively consent to the assignment of duties and rights.
“This would solve the issue of it technically being unlawful. ”
BLC Attorneys, for EP Cricket, rebutted the report, with lawyer Guy Dakin saying it dealt with certain issues “in the manner they were briefed”.
In a memorandum given to The Herald, BLC stated the running and controlling of activities at the venue did not occur without the knowledge of Africa Cricket Development.
A board member who did not want to be named said the board and clubs had been misled.
“Stakeholders don’t know
‘ Stakeholders don’t know their strength. It ’ s evident EP Cricket is being governed by individuals outside the board. This is gravely concerning. Governance structures are being circumvented’
their strength. It’s evident EP Cricket is being governed by individuals outside the board.
“This is gravely concerning. Governance structures are being circumvented.
“Cricket in the region is not in the hands of a constituted board. A select few are calling all the shots without any input from the entire board.”
Mark Williams, who took up two chief executive positions in August 2016 at Cricket Eastern Cape, which manages the Warriors professional franchise, and EP Cricket, said the decision to enter into an agreement with Mega Sportz was to drive financial sustainability.
He said member clubs, about 80 at the time, voted in favour of the decision during a reconvened AGM on August 31 2019 after a quorum was not reached on August 24 2019.
Asked how he could hold two CEO positions until December 2020, he said it had always been that way.
“My permanent secondment to set up the Mega Sportz structures was approved in December 2020,” Williams said.
EP Cricket finance manager JP Malgas referred the reporter to his attorneys.
He said he was mandated to get a legal opinion on alleged irregularities on February 13.
Malgas and directors Rafiek Potgieter and Dai-Tai Marais are subject to an internal disciplinary process which EP Cricket started after the three allegedly obtained the Pagdens report in an unauthorised manner.
Malgas’s attorney, Kelsey Smailes, said he was instructed by the board to source a legal opinion with respect to the SA20 recordal agreement. Marais failed to comment. Potgieter said he wanted the investigation to take its course.
“Should any individual be found to be misleading the progress, we rely on the relevant authorities to make it right.
“Cricket should be the winner at the end of the day.”