Lions deny cash crisis
1 Jul 2011
Lions president Kevin de Klerk has denied the Guma Group’s claim that the union is bankrupt.
Robert Gumede and Ivor Ichikowitz of the Guma Group made the following allegations in a document sent to the GLRU on 17 June by the private investors who this week pulled out of their deal with the union, Beeld newspaper reported on Friday.
1. The Guma Group on its own accord managed to get sponsorships of about R100 million for the Lions. The sponsorships, which were negotiated based on the Lions’ vision to transform, may now be in jeopardy.
2. The Lions considered an offer of R220 million for the sale of Ellis Park by the Marc Group while the government spent R540 million on improvements to the stadium ahead of the Fifa World Cup.
3. The GLRU was unable to pay salaries in October and December last year, as well as in January this year. The Guma Group had to provide a guarantee to Absa to ensure that salaries could be paid.
4. The Guma Group had to step in to ensure that the repayment of a loan of R30 million to Absa in May was postponed and recently also had to negotiate the extension of payment of the loan until 3 July.
5. The GLRU has up to 90 players under contract and some of the players are receiving big salaries in spite of not being at training.
6. Dick Muir (former Lions coach) received a salary of about R2.2 million per year, even though he has not been actively involved at the Lions since May last year.
7. Certain members of the Golden Lions executive have pursued their own agendas and undermined the partnership.
Guma TAC says it has invested R14 million in Lions rugby to date and its legal representatives will enter into talks with the GLRU to negotiate about how the money is going to be repaid.
De Klerk told Beeld that ‘every item in that document could be disputed’. He said he had inherited the Absa debt and was not too concerned about it, and that employees and players at the GLRU would continue to receive their salaries.
In a press release on Friday, De Klerk said the document reflected the opinions of one party.
‘We obviously do not share the views of the author [Gumede]. It was a confidential letter to me that was leaked to the media and I am of the firm opinion that the correct forum for these matters to be addressed is not in public. The letter contains untested claims and I can assure our supporters that the Golden Lions Rugby Union does not face bankruptcy – the very idea is news to us.
‘Our intentions have always been honourable in engaging with an equity partner and my objectives and views around identifying a BEE partner are well documented. We accepted an approach by Guma as a result of this. We will continue to act in an honourable way by not discussing commercially confidential matters in public.
‘Suffice to say, we are already considering an offer from an alternative equity partner and can assure our supporters that the Lions’ 120-year legacy is not being compromised.’
191 Comments
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1 Jul 2011, 12:39 pm
@XhosaKid(XhosaKid)-113:
sbali i suggest u watch “Howard Minisi Moments” on Youtube.That kid can play…Sharks dont have to look to far for a centre than in their junior stocks.
ntwana iyadlala
1 Jul 2011, 12:39 pm
Howard Mnisi
1 Jul 2011, 12:41 pm
@Kat(Katsesnor)-134:
Manie would have people believe he got Kevin de Klerk ‘in’ – that is a load of bollocks as Manie is reviled by the clubs and holds no sway with them – he is recognised as incompetent and being of the old verkramp regime who can barely see past his piepie and Manie can barely get his keys in the ignition of his bakkie.
He has turned out to be the cross that Kevin de Klerk has had to bear and which will sink him.
1 Jul 2011, 12:41 pm
@rangerman(rangerman)-143: don’t you have smelly fish to go and clean kitchen boy. Leave me to take it out on that doos rather than on yuppy guppies.
1 Jul 2011, 12:43 pm
@Melchizedek(Melchizedek)-125:
Agree with you on that.
The GLRU has been revealed as incompetents and it effects all the Executive management and Club Presidents who have had their heads in the sand.
Time to cull at the Lions
1 Jul 2011, 12:46 pm
@Gordon Gekko(Gordon Gekko)-153: Surely, this should be the end of Manie. Can’t be any other outcome. No other outcome will make Lions supporters think twice about jumping ship.
1 Jul 2011, 12:49 pm
@mshiniwami(mshiniwami)-151: Will check him out.
1 Jul 2011, 12:51 pm
@rangerman(rangerman)-126:
Manie Reyneke has exposed the GLR Union to losses of millions – the R30m debt that de Klerk said he inherited – was inherited on Manie’s watch – add to that the R14m plus the liabilities of 90 players and 5 ‘coaches’ and you are staring down the barrel of R80m pointed at your gonads.
This is a hopeless no win situation for the Lions and there is no alternative but for de Klerk to craft a new deal with Gumede.
1 Jul 2011, 12:51 pm
I have updated the article with the Lions’ response to the Guma Group’s allegations.
1 Jul 2011, 12:54 pm
@RL(RL)-154:
you are the smelly fish sonny but i think i would rather grind you into mal fro cow food than clean you.
some fish are simply no good on the table no matter how much you spice them.
now clean up your act or you will be consigned to the b league like your union.
you hear me boy?
1 Jul 2011, 12:55 pm
@Kat(Katsesnor)-156:
It cannot be said any other way – Manie Reyneke offers no value to the GLRU – he can barely speak – but can text
“IN A MEETING – CALL ME LATER’ – what is that all about?
He has to go – and not with any golden parachute either, but with a cardboard box under his arm.
1 Jul 2011, 12:55 pm
@Gordon Gekko(Gordon Gekko)-158: ja, i hear manie is a real tosser.
how he stays put baffles me?
1 Jul 2011, 12:59 pm
@rangerman(rangerman)-162: He is sucking on someone higher up in union’s main vein.
1 Jul 2011, 12:59 pm
‘Suffice to say, we are already considering an offer from an alternative equity partner and can assure our supporters that the Lions’ 120-year legacy is not being compromised.’
What new equity patner? who would throw money at this archaic structure than refuses to engage new investors?
The management of the union for the last 10-15 years(Louis Luyt cou de ta amongst that) and the lack of success has compromises that 120 yr history-ALL BY THEMSELVES..
That has f*ckall to do with Guma Group.
1 Jul 2011, 13:01 pm
@Gordon Gekko(Gordon Gekko)-161: “call me later”
what, the lions cant afford telephone calls now?
how the *** should the person receiving that sms know when manie has finished his bs meeting?
guesswork?
what a knobend.
@HHS(Hop Hop Spinnekop)-163: is there anyone higher up?
1 Jul 2011, 13:04 pm
@mshiniwami(mshiniwami)-164: the clubs in Jozi are equally to blame as they elect the executive dont they?
so they are happy with a situation where 2000 drunk yobbo redlions arrive and behave like barbarians towards women and children at a decaying stadium (ok, 540 bar changed this)?
well they are busy cutting off their own head and the body may just wither with it.
sad news for rugby, sad news.
1 Jul 2011, 13:05 pm
@Simon(Simon)-159:
Simon – whatever new partner walks in the door – if there are any – as no corporate wants to start off with a black eye in the media while this tussle is ongoing – will also have to do a due diligence and be prepared to face claims from the Guma group and dig deep in their wallet to settle the financial claims.
I have a forensic audit of the Lions that tells the exact opposite of what Kevin de Klerk would have the public and Lions supporters believe.
It pillories the management and in todays corporate governance with the emphasis on reckless trading and failing the fiduciary duties:
Manie Reyneke & Kevin de Klerk – please note the NO ESCAPE para below:
DIRECTORS: DELINQUENCY DECLARATIONS (AND OTHER DANGERS)
Directors – beware the additional risks and obligations imposed on you by the new Companies Act.
In addition to an increased risk of incurring personal liability to creditors and other stakeholders, directors now also face the danger of being declared “delinquent” or being placed under “probation” – in some cases even if they are merely negligent rather than deliberate in their non-compliance.
The delinquency declaration
This is not to be taken lightly! Serious transgressions may result in a lifetime ban from holding office (either as a director or as a “prescribed officer” – essentially a senior manager with “general executive control” in the company), whilst less serious misconduct will still attract a lengthy disqualification of at least 7 years. Offenders may also have to undergo “remedial education”, perform community service, and pay compensation to victims.
Interested parties, such as shareholders, company officers, trade unions and employees, may apply to court for a delinquency order where a director is guilty of any of a wide range of misdemeanours – too numerous to list here, but largely falling into these broad categories: -
Acting or agreeing to act as a director or prescribed officer whilst disqualified or ineligible to do so (there’s a long list of disqualifying factors – take advice in doubt!).
Reckless, grossly negligent or fraudulent trading.
Gross abuse of position, unlawfully taking personal advantage of company information or opportunities, inflicting harm on the company or a subsidiary either intentionally or by gross negligence, or generally acting in any manner amounting to gross negligence, wilful misconduct, or breach of trust.
Conviction for offences or incurring administrative fines or penalties – or being in control of a company so convicted or penalised.
“Oppressive or prejudicial” conduct, or abuse of the company’s “separate juristic personality”.
Probation
The lesser sanction of a “probation” declaration applies to a range of less serious categories of misconduct, is likely to involve at least partial disqualification for up to 5 years, and may entail supervision by a mentor, remedial education, community service and payment of compensation.
Failure to pay creditors
Probation could also await anyone who – within any 10 year period – is or has been a director of two or more companies, or a managing member of two or more CCs, that fail to pay creditors in full or to meet all their obligations (unless such failure relates to a business rescue plan or compromise with creditors). No longer therefore can a director trade with impunity in one company after another, liquidating each company when the going gets tough and leaving creditors to lick their wounds.
Indemnification
The new Act regulates the circumstances in which companies may indemnify directors and prescribed officers – take advice on how best to limit your risk profile in this regard, and check that you have appropriate insurance in place.
No escape
Resigning as director is no protection from these sanctions for misconduct – they can be used against an ex-director for up to 2 years.
1 Jul 2011, 13:05 pm
@mshiniwami(mshiniwami)-164: At the time when the deal was awarded to Gumede there were rumours doing the rounds (amongst Lions fans) that the bidder that came second was a very reputable entity – many argued a better entity for Lions rugby. I don’t know who this entity consisted of (still don’t know). Things might turn out better for the Lions. As I stated earlier, I hope whatever must happen happens quickly.
1 Jul 2011, 13:09 pm
@rangerman(rangerman)-165: Must be… How do they explain Jorrie Muller’s involvement with the 7′s?
1 Jul 2011, 13:10 pm
@Simon(Simon)-159: it is lies and damage control, too late
@rangerman(rangerman)-165: I will battle you some other time rangergirl :razz;
1 Jul 2011, 13:11 pm
@HHS(Hop Hop Spinnekop)-169: sounds like a recipe for success
1 Jul 2011, 13:12 pm
@RL(RL)-170: ok, i understand if you have to run off and sob into your blankie right now
1 Jul 2011, 13:12 pm
GLRU has woken up on Twitter … “GLRU NOT bankrupt!”
1 Jul 2011, 13:14 pm
@rangerman(rangerman)-166:
Very true.But also have a look at the state of club rugby in Jozi.only UJ this year has managed to same face.
@Kat(Katsesnor)-168:
Well i would like to see that partner because its sounding a little cryptic to me much like “open secret” saga here on keo regarding Bok players/coach etc yet little to no evidence of such.
No meat on bone & its starting to decay from all the BS-Lions claims
1 Jul 2011, 13:16 pm
@mshiniwami(mshiniwami)-174: It’s for De Klerk to come out with it. We are all eagerly awaiting news. According to the GLRU the parties are in negotiations. They better get this out SOON because we are VERY sceptical. We’ve been hoodwinked to many times.
1 Jul 2011, 13:17 pm
@Melchizedek(Melchizedek)-122:
i only say that because john mitchell does have a history of talking his way into big teams with big promises but with very little delivery at the end. its all well and good to say otherwise but at the end of the day he’s got all the money and the (every other) team he’s coached is still just as kuk.
1 Jul 2011, 13:19 pm
Only thing that will make me happy now is if KDK tell us that Manie and D1cky pulled Thelma and Louise move.
1 Jul 2011, 13:20 pm
@i see dead players…(i_love_u_bakkiesbotha)-176: Don’t bring Mitchell into this. He’s not part of all the k a k going on at the union. He’s the good guy trying to get the best out of players who’s been through so much in the last few years. The players and coaches are not the problem. They deserve credit, not this.
1 Jul 2011, 13:21 pm
@Kat(Katsesnor)-119:
hahaha thats suspended animation if your on an interstellar space flight, or cryogenic freezing if your just dead and they’ve got no way to bring you back to life in the present hehe…
1 Jul 2011, 13:33 pm
@Kat(Katsesnor)-178:
yes, but i’m saying he’s usually more than happy to be in the same position as and where the money’s being ‘thrown at the problem’
1 Jul 2011, 13:39 pm
@i see dead players…(i_love_u_bakkiesbotha)-180: Well, that’s the business Mitch is in and he deserves every penny considering all the s h i t he has to endure.
1 Jul 2011, 13:46 pm
@Kat(Katsesnor)-181:
what, like coaching kuk teams all the way to nowhere time and again? the man said it himself ‘judge him by his results’ and by his results i’ll say he does take the money as it comes (cos thats the biz he’s in) and then he runs.
1 Jul 2011, 13:50 pm
@i see dead players…(i_love_u_bakkiesbotha)-182: Mitch was promised a specific cash flow to base his planning on to produce specific results. The money never came. Can’t blame him. Mitch himself stated his frustrations in the Media.
1 Jul 2011, 14:00 pm
Let the GLRU auditors tell us there is no cash crisis. We stopped believing any other source.
1 Jul 2011, 14:11 pm
@Kat(Katsesnor)-183:
look i’ll give it to you that the lions are and were a seriously pharked up union before and during his time but johhny m himself has a history as a coach. how do you fix a kuk union by bringing in a kuk coach? who says he has all the best ‘winning’ ideas about whats needed. if the world worked on just having people with ‘winning’ ideas and ideas alone then shirt man we would have had functional government in sa for the last 18 years alone and the da wouldnt be running the wc and juju would be head of the united nations and chicks would always be singing on my mike all night cos its right and MOST OF ALL…the all blacks would have won every world cup, ever…
i guess what i’m trying to say is, talk is cheap…and he does a lot of talking
1 Jul 2011, 14:17 pm
@Kat(Katsesnor)-183:
but he’s salary at these teams never is, cheap…
think about it
1 Jul 2011, 14:17 pm
@sonnie-vatdie pill virwurms(i_love_u_bakkiesbotha)-185: Mitch does a lot of talking? Wow, I must have missed that.
1 Jul 2011, 14:19 pm
Tweets from GLRU staff all happy. Just the fans having a bad day. Wish we could also know why we ought to be happy.
1 Jul 2011, 14:20 pm
Maybe they just compartmentalise better than I do.
1 Jul 2011, 14:24 pm
@Kat(Katsesnor)-188:
i guess thats what the yankees would call a ‘disconnect’ between lions management and the rest of the world…
1 Jul 2011, 14:27 pm
@Kat(Katsesnor)-187:
aw come on guy? draw back from memory some of his press conferences and ‘big plan’ speak down the line…now tell me he does’nt do a lot of talking…come ooon?
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