The lineout Steve Tshwete will field in his match with Louis Luyt could include the Receiver of Revenue, reports Stuart Hess
SPORTS Minister Steve Tshwete’s special task force will use alleged tax evasion, a charge with criminal implications, as the main thrust of its investigation into rugby supremo Louis Luyt.
The Mail & Guardian established this week that the team, set up to probe allegations against the South African Rugby Football Union (Sarfu) and its president Luyt, is targeting the tax issue. A tax investigation would give the team enormous powers to probe into the complicated financial affairs of Luyt’s rugby empire.
The M&G also has documents which claim that Sarfu had a transcript of the Andr Markgraaff “kaffir” tape sometime between November 20 and December 6 last year. Sarfu has denied it knew of the tape’s explosive contents until it was broadcast earlier this week,
Tshwete’s team was to present the allegations to Luyt and his Sarfu executive on Friday, following a week in which the two sides publicly swapped insults.
The allegations were handed to Tshwete last December by former Transvaal Rugby Football Union (TRFU) vice-president Brian van Rooyen.
The tax probe may focus on the TRFU, of which Luyt is also the president. The TRFU functions as an association not for gain under old legislation and is exempted from paying income tax, although it has shown a healthy profit in the last two years.
According to Finansies & Tegniek, which has probed deeply into the Luyt dynasty, the TRFU hides all its wealth in a private company, Ellis Park (Pty) Ltd, which was revalued in a preliminary profit report this week at R104-million. The TRFU owns all the shares and debentures in the company, but about three years ago became embarrassed by its wealth.
TRFU members handed over their right to vote and their right to the dividends and debentures in Ellis Park to trustees of the Transvaal Rugby Sport Trust in 1994, following a recommendation from Luyt.
Gauging Ellis Park’s income is difficult as it can distribute its profit in the form of debenture interest to avoid tax.
The M&G understands Tshwete’s team wants to use every legal means at its disposal to unpack Luyt’s rugby kingdom. The Receiver of Revenue has powers to demand all receipts and details of transactions stretching back for years.
And if the task force is not satisfied with its investigations at the end of its mandate, Tshwete will institute a judicial commission of inquiry into Sarfu – the same fate which befell the South African Football Association (Safa), which cost Safa chief Stix Morewa his job.
The task team will also investigate lucrative sponsorship deals Luyt brokered in Sarfu’s name. These include the R2- billion Sanzar deal signed by Luyt and media magnate Rupert Murdoch, and the as yet undisclosed sum paid by sports clothing company Nike for the rights to clothe the national rugby team. Van Rooyen’s report attempts to expose who got paid what in terms of the sponsorship deals.
The 1995 Sanzar deal – which gives exclusive broadcast rights in the Southern Hemisphere to Murdoch – almost prompted Sarfu’s senior vice-president Mluleki George to quit as the deal was so secret that not even George has seen its contents. “Every sponsorship deal has a secrecy clause,” Luyt said this week.
Tshwete this week criticised Luyt’s handling of South African rugby, saying he ran it as if it were his “property”.
“I’m not going to plead with arrogant people like Luyt to obey the ministry and co-operate with the task force,” Tshwete said. Reacting to reports that Luyt would resist a task team’s investigation into rugby irregularities and possibly take legal action against him, the minister said: “Let him take legal action, it will merely complicate the issues, but if he wants a fight he’ll get a fight.”
Luyt has denied any knowledge of the tape on which former national rugby coach Markgraaff made racist remarks about George. According to Sarfu chief executive Rian Oberholzer (Luyt’s son-in-law), the union only became aware of the contents of the tape earlier this week when it was aired on SABC television. “Dr Luyt did not know about the content of the tape; he only knew it existed,” said Oberholzer. Sarfu denies receiving any transcript of the tape late last year.
But former Griqualand West captain, Andr Bester – the man who taped the conversation with Markgraaff on October 22 last year – said in an affidavit that a copy of the transcript was sent to the Griqualand West Rugby Union late last year. A letter which the M&G has in its possession clearly indicates that Sarfu sought legal advice concerning the issue long before the tape’s contents were aired this week.
Meanwhile, Oberholzer said the crisis in South African rugby was the work of “sinister” parties aiming to discredit “certain individuals” within Sarfu. “The timing of the release of this tape is well- orchestrated, to coincide with the establishment of the government’s task team.”
Earlier, Markgraaff also said he was the first “victim” of the “sinister” group. “There is an attack aimed at certain individuals within rugby. I’ve been targeted so I must go.”