Pne pf our posters warned of this but no one bothered to listen!
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Gauteng probed over transfer of race courses
April 24 2012 at 05:00am
INLSA
13/12/2011. Public Protector, Thuli Madonsela during the media briefing in Court classique hotel yesterday. Picture: Thobile Mathonsi
Wiseman Khuzwayo
Public protector Thuli Madonsela is investigating a complaint of malpractice and improper conduct by the Gauteng provincial government after it entered into an agreement with the National Horseracing Authority by transferring racecourse assets from local council ownership into the hands of JSE-listed Phumelela Gaming and Leisure.
Madonsela is also probing the granting of exclusive licensing rights to the company without any transparent public or parliamentary process.
The complaint was lodged by the Africa Race Group (ARG) and Phindi Kema, a thoroughbred horse breeder.
Also at issue is the involvement of the SA Sports Confederation and Olympic Committee (Sascoc) in Phumelela. This is through its membership in the Thoroughbred Horseracing Trust, which is a 35 percent shareholder in the company.
ARG said Gideon Sam, the president of Sascoc, was a trustee. But this was denied by Vinesh Maharaj, the chief financial officer of the sports umbrella body. He said Sascoc’s trustee was Johan Roodt, who was independent.
Grinde Investments, an investment arm of Sascoc, owns a further 5 percent of Phumelela.
Sascoc’s stake in the trust was previously held by its predecessor, the National Sports Council.
According to Phumelela, horse racing in Gauteng was corporatised and restructured in 1998 following negotiations with the Gauteng Department of Finance and Economic Development under then MEC Jabu Moleketi.
The three racing clubs that ran racing in the province until then, transferred their assets to a new company, Phumelela, which took over management of the sport.
The racing clubs then formed the Racing Association (RA).
Horse racing in the Northern Cape, Free State and the Eastern Cape subsequently joined the corporatisation process under Phumelela.
The company says: “The future was bleak, but Phumelela worked swiftly and efficiently to create a platform for the long-term sustainability of horse racing in South Africa, a process that was assisted by the racing clubs in KwaZulu-Natal and the Western Cape, rationalising their operations under the banner of Gold Circle.”
Trainers including Ian Jayes, the former chairman of the Racehorse Trainers’ Association, said the claim by Phumelela was nonsense. It had instead run down the industry.
They said the company had sold three racetracks in Gauteng and the Free State, reducing opportunities for owners and trainers to make money.
The ARG has expressed an interest in acquiring Gold Circle Western Cape.
The Competition Commission last month opposed a set of proposed transactions involving Kenilworth Racing.
The first involves the acquisition by Kenilworth of Gold Circle Western Cape.
The second is the takeover of Kenilworth by the Thoroughbred Horseracing Trust. As part of the deals, Phumelela would manage Kenilworth and Gold Circle Western Cape through a management agreement between Phumelela and Kenilworth, effectively giving Phumelela control of Gold Circle Western Cape.
The commission found that these transactions were interdependent as they could not be carried out individually.
The commission said Phumelela and Gold Circle were the only two operators in the country which exclusively held totalisator licences in each province.
It found the deals effectively substantially increased Phumelela’s share of the market for the administration of horse racing and the associated betting activities in South Africa. In addition, a set of arrangements and agreements between Phumelela and Gold Circle diminished competition between the two groups.
It is understood that the trust wants to appeal to the Competition Tribunal.
ARG sees Sascoc as its competitor with an undue advantage. The group said it was of the view that Sascoc’s interests in Phumelela were likely to substantially prevent and lessen competition in the industry despite the fact that Sascoc should be an impartial body whose main interest was the promotion of sport in South Africa.
Maharaj denied the trust belonged to the sports umbrella body. He said the trust’s members were Sascoc, Phumelela and the RA.
He said: “Nobody owns shares in the trust. It funds good causes in the industry and does not run the industry.”
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