The United Cricket Board (UCB), with a turnover of R247-million in 2004/05, is facing a loss of R48-million in the current financial year.
Quite how the organisation got itself into this mess was to be the subject of a financial indaba in Johannesburg this Friday. The indaba has been postponed, but will take place in the near future.
”If we don’t create a new, sustainable platform, we have 18 months before we go out of business — maximum,” UCB treasurer Haroon Lorgat warned the last general council meeting.
The UCB is in such straits that it recently agreed to hop into bed with notorious former Indian Cricket Board supremo, Jagmohan Dalmiya, by taking part in a series of ill-considered and meaningless matches between Asian and African elevens.
Dalmiya has already announced that the matches will have official one-day international status and will be staged in Centurion on August 17 and Durban on August 20 and 21.
With a R70-million carrot from the television rights dangled in front of it, the UCB looks set to ignore the fact that several players will be overseas. Playing on winter pitches — especially on the Highveld — could destroy players for the rest of the season.
Lorgat admitted that the matches had little cricketing value, but would be welcome in helping deal with the UCB’s deficit. He added that the series should be confirmed ”in the next week or two”.
The proposed indaba ”is about restructuring and becoming cost-effective. We need to get rid of certain things in our system and remodel ourselves to make much more effective use of our resources,” he said.
But what lies behind the UCB’s financial crunch? There has been corruption — the board’s former finance director, Diteko Modise, is on trial for allegedly embezzling R7,25-million. The UCB’s salary bill last year may have been more than R8,5-million, but it is hard to believe Modise’s luxury vehicles and a R2,5-million house bought for cash on the Dainfern Estate failed to raise eyebrows.
The controls on the UCB’s purse strings were as loose as Paul Adams’s bowling, and many financial irregularities occurred.
Modise was group chairperson of Meloko Investment Holdings and one of its subsidiaries, of which UCB chief executive Gerald Majola, also a director and shareholder, was awarded a R3-million contract to upgrade the in-house computer network. The UCB’s policy is that all contracts of more than R100 000 must go out to public tender.
The UCB ordered three in-house audits, the last of which found that there was still a lack of financial structure. The CEO was cleared of wrongdoing on grounds that the UCB had no corporate rules to break.
Payouts for departing staff have also been substantial. Hylton Ackerman, Graham Ford, Craig Smith, Ian Smith, Lance Klusener, Eric Simons and Tim Southey all left with settlements estimated at R1,7-million each.
A Commission for Conciliation Mediation and Arbitration (CCMA) hearing found Ackerman was unfairly dismissed on racial grounds. Smith, Modise’s prede-cessor as financial director, was seconded to the 2003 World Cup Committee but, on his return to the UCB, was told Modise was staying on, on a fixed-term contract, as his replacement.
Smith was meant to be offered the post of commercial manager, but testified at Ackerman’s CCMA hearing and was told to leave, with a generous payout.
Other oddities are the donation, via a UCB cheque, of R6 000 by a senior administrator to his son’s school, and the reprinting of the 2005 incoming tours brochure at an extra cost of R155 000. A copy sat around at the UCB offices for proofreading for 10 days before deadline, but 20 000 copies were printed before Majola finally responded and changed one photograph and one line of text about the new franchise system.
The photograph was of the legendary Basil D’Oliveira standing next to Ali Bacher, Majola’s predecessor as CEO. The new picture did not have Bacher in it.
The UCB’s major financial problem, however, is the strength of the rand against the dollar, in which it receives most of its income, for example, from television rights. While it previously reaped nearly R100 for every $10, since late 2004 that figure has shrunk to about R59 — a 41% loss.
One senior UCB administrator said the board was simply not equipped to take complex economic risks in hedging against the exchange-rate fluctuations.
The UCB does not like to be reminded of its financial woes. A recent report on it was pulled from a leading sports magazine because of UCB pressure.