The web of mismanagement that led to the liquidation of the EP Kings, the commercial arm of the Eastern Province Rugby Union (EPRU), will be revealed when high-profile rugby figures testify at a confidential hearing next month.
Liquidators are serving summonses on Jurie Roux, the chief executive of the South African Rugby Union (Saru), and EP Kings’s franchise head Cheeky Watson.
The high court in Port Elizabeth has granted an application for a liquidation hearing to be held at the city’s magistrate’s court.
Saru board member Monde Tabata, the administrator for the EP Kings, and the former head of the EPRU, Charl Crous, will also appear at the hearing.
“The interrogation process empowers liquidators to scrutinise the club and its partners regarding the business affairs of EP Rugby over the last couple of years,” one of the liquidators said this week.
Port Elizabeth attorney Craig Jessop, who is representing a group of 18 players at the hearing, said he hopes to recover “the outstanding salaries and [monies] promised to them for damages”.
In July and August last year, EP Kings failed to pay players’ salaries and debts totalling R18-million. At the beginning of this year, the EPRU players’ union, My Players, successfully applied for the provisional liquidation of the EP Kings. The liquidation was finalised last month when Watson failed to secure a R200-million sponsor as part of a business rescue plan.
Now liquidators will look into the franchise’s financial decline over the past three years – which has left it with slightly less than R70 000 in assets – under Watson’s stewardship. They will also examine what role Roux and others played in managing the franchise’s finances. The hearing will be confidential because of the sensitive financial information likely to be disclosed.
Watson’s woes have been compounded by the union’s lower league clubs passing another motion of no confidence in him. It’s the fourth time they have done so but the controversial rugby boss has remained at the helm.
Watson said: “[It seems] to have been resolved but it’s all in the hands of the administrator.”
While liquidators finalise questions they plan to pose at the hearing, it’s understood that Roux and Crous are among the top rugby bosses who will reveal how money was managed after the EP Kings’ relegation from Super Rugby in 2014, and explain why the union could not pay its players.
“We’re playing our cards close to our chest … The people who are subpoenaed all played a crucial role in the management of finances and the alleged mismanagement, so they have questions to answer,” said another source involved in the liquidation.
EP King’s fate will be decided at the hearing, which has significant implications for Saru. The national rugby union is committed to competing against New Zealand and Australia for a second season of Super 18 Rugby, which means Saru is obliged to field another South African team. That is meant to be the Southern Kings, the EPRU’s Super Rugby franchise. If Saru is unable to sort out the EP Kings’s finances or find a sponsor, it will have to underwrite the Eastern Cape side, at a huge cost.
The EP Kings are currently competing in the Currie Cup without an official sponsor and under the administration of Saru, which has kept it afloat since December. But, with a R20-million bail-out deal – which was approved by the former ANC metropolitan council – under threat, the team may have to drop out. Shortly after taking office, Nelson Mandela Bay metro mayor Athol Trollip initiated a review of the deal. The EP Kings’ participation in the Currie Cup hinged on it.
Nelson Mandela Bay spokesperson Kupido Baron said: “A decision was made to [release a R6-million deposit] because it came from a previous council meeting. But the mayor said, ‘let the other payment be deferred’, until he is satisfied with the review.”
Known as the home of black rugby, the Eastern Cape has three teams: Eastern Province in Port Elizabeth, Border Bulldogs in East London and the Country District team, which operates in the province’s rural areas.