SA Rugby takes back control of Kings
Failure by The Greatest Rugby Company in the Whole Wide World (GRC) to meet its financial commitments has resulted in SA Rugby taking back its controlling 74% share in the Isuzu Southern Kings.
This was confirmed by SA Rugby president Mark Alexander after speculation that the cash-strapped Kings might have problems paying their players in the months ahead.
The Kings are scheduled to be in action against the Cheetahs in a Guinness PRO14 match in Port Elizabeth on August 22.
SA director of rugby Rassie Erasmus is liaising with Kings director of rugby and interim coach Robbi Kempson on immediate team needs.
SA Rugby said Kings players, management, office staff, sponsors and provincial and metropolitan authorities had been advised of the latest developments.
In addition, all staff and players of the franchise have been retained.
“I cannot stress enough how reluctant we are to resume control of the Isuzu Southern Kings,” Alexander said.
“It is our last resort and we are keen to explore ways to return the shareholding to another’s hands, in conjunction with the EPRU [Eastern Province Rugby Union], the minority shareholder, which has given the required approval to the decision.
“The next step is to appoint a new board to oversee the franchise’s affairs and ensure the team is match-ready for when we are able to resume playing.”
SA Rugby has appointed a finance team to work with franchise administrators on ensuring salary payments are made and business needs are addressed.
Alexander said the decision was taken following the failure of the GRC to meet its financial commitments relating to the acquisition of the shareholding.
The original GRC shareholders were chair Loyiso Dotwana, deputy chair Rory Stear, Kenny Govender, Gary Markson and Vuyo Zitumane.
It was revealed by The Herald last week that Govender and Markson had resigned from the business consortium.
It has emerged that the GRC, led by Dotwana, brought in no investment capital of its 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 is cleared.
Insiders say the GRC defaulted on its very first repayment and did so again in February, after SA Rugby extended its deadline.
Yesterday’s decision ensures the Isuzu Southern Kings will
participate in Guinness PRO14 and/or any other competitions that may be established within the constraints of the Covid-19 pandemic lockdown.
“This was a decision we took with extreme reluctance and after allowing the GRC considerable leeway in which to meet the contractual commitments they made on the acquisition of the shareholding,” Alexander said.
“We appreciated the vision and intentions of the GRC but, unfortunately, we are operating in an unforgiving business environment.”
A decision on whether an administrator also needed to be appointed would be taken in the coming days.
Kings timeline:
● November 2010: SA Rugby announces intention to field the Southern Kings in Super Rugby in 2013.
● February 2013: The Kings compete in the Super Rugby competition as one of five South African teams.
● August 2013: The Kings lose their place in Super Rugby in a two-legged playoff against the Lions.
● November 2015: SA Rugby takes control of the franchise when EPRU, to which the operation of the franchise had been granted, ran into financial trouble.
● February 2016: The Kings return to Super Rugby when the competition expands to 18 teams.
● April 2017: Sanzaar announces that Super Rugby will shrink from 18 teams to 15 teams in 2018.
● September 2017: The Kings (and Cheetahs) are included as SA’s representatives in the Guinness PRO14 competition.
● January 2019: GRC acquires 74% shareholding in the franchise; EPRU retains a 26% shareholding.
● June 2020: SA Rugby resumes control of the Isuzu Southern Kings following the failure of the GRC to meet contractual commitments.