The absence of information will always lead to speculation, and whether it is fair or not, you would think that the Lions Rugby Union would have realised this after years of accusations of financial and administrative mismanagement.
The latest episode in the sorry saga is a public mud-slinging contest between the Lions former partners, GUMA Tac and Lions management. The role players; Robert Gumede & Ivor Ichikowitz of GUMA Tac vs. Kevin de Klerk & Lions management.
Last week GUMA Tac announced its withdrawal from the Golden Lions Rugby Union which included taking their R80-million investment for 49.9% control which they had negotiated and announced with great fanfare a couple of months ago.
Currently, a lot of accusations are flying around, all mainly from the GUMA party who is accusing the Lions Rugby Union of ‘resisting change’.
The sorry state of affairs even prompted South African minister of Sport, Fikile Mbalula, to get involved through a statement in which he states that the failed partnership is a massive blow to rugby transformation.
Unfortunately the whole transformation and BEE angle towards the failed partnership are dominating the headlines in the media, whereas the failures of the Lions Rugby Union to adopt a more professional approach as a business should be of greater concern.
If you care to read between the lines, the GUMA group has basically accused the Lions of being happy to receive ‘BEE’ money, but as soon as they insisted in having a say how the money should be used or managed, they were shut out.
“Our walking away from this deal is not a racial issue,” Ichikowitz said in a report on NEWS24.
“It is simply that the Lions is not being run like a company; it is being run like an amateur union.
“Our goal was to change the way the business leg of the Lions was run with specific emphasis on marketing and management, or creating a brand all South Africans can identify with.”
It is a serious allegation, which further fuels the belief that rugby in this country is administered and controlled by a select few who simply has no intention of transforming the game effectively but more importantly, relinquish any powers they currently enjoy within the inner-circles of SA Rugby.
It also suggests that transformation window dressing goes way beyond player representation on the field of play, where unions are quick to invite and partner with BEE companies but refuse to let them actively manage affairs within the organisation.
Most perplexing or even disappointing however, is the Lions refusal to publicly refute any of these claims where the best they could come up with is a statement issued on their website which basically states ‘they are not willing to comment’.
It is any organisation’s right to protect their personal financial affairs, but given the Lions recent history the damage of releasing such information against the damage they currently suffer by closing ranks and keeping quiet may be far greater.
For all we know, the GUMA group could by lying through their teeth, but if we have no way of judging the facts from both parties, it is all we have to go on and believe, and given the ‘trust’, or lack of it, the Lions have enjoyed from the rugby public over the last 5 years, they should know better than to think their word is good enough or should be followed with blind faith.
Lions management is meeting their sponsors on Tuesday to answer their questions and concerns, and one can only hope that following this meeting we will get greater clarity of the situation other than the rather useless public statement released last week.
Just a question – not privy to any information but per comment 10 it is stated that current liabilities exceed current assets by circa R44 million. The investment in the stadium would not be included in current assets unless recognised as assets held for sale. I.e the Union may then not be technically insolvent but in all probability face severe liquidty concerns.
31@ Mufasa 007:
The Stadium or interest in the stadium is indeed contained in the Financials, so too some of the values of the Subsiduaries like EPS [Ellis Park Stadium (Pty) Ltd], EPWOS [Ellis Park World of Sports (Pty) Ltd], EPSS [Ellis Park Stadium Sports (Pty) Ltd], Golden Lions Sports Trust, GLRU [Golden Lions Rugby Union (Pty) Ltd], Lions Rugby (Pty) Ltd.
Dont dispute that but would expect/ hope that majority of these investments would not form part of current assets i.e. these investments/ fixed property normally is considered non-current assets – Current assets defined as assets that is expected to turn to cash in period not exceeding 12 months.
Hoping that the Coca Cola park and other investments is considered long-term and thus excluded from current assets. That should not take away the pont that from a liquidity perpective the union may still be in dire straits.
33@ Mufasa 007:
These are FULL FINANCIALS, Mufasa!
If some of the assets, whether fixed or long term were excluded, the Executive Report and the Independant Auditors Report would not have contained the statement I placed in BOLD under comment # 10.
It would rather have said that the Group is fully solvent by virtue of these “Other assets” and may just be a bit cash strapped.
Anyway, the obligation regarding Financial Statements of a Section 21 Company (An Association Not for Gain) – the GOLDEN LIONS RUGBY UNION AND GROUP, are clear… full disclosure of ALL ASSETS & LIABILITIES.
Understand the the financial statements include all the assets.
The statement per comment 10 refers to Current Assets being exceeded by current liabilities – hence the comments above. Otherwise comment 10 would have read that the Union’s liabilities exceeds assets at fair value blallablala and it would have been technically insolvent.
The Statement of Financial position (Previously known as the Balance sheet) includes different asset classes i.e. non current and current.
Maybe you coudl advise the difference bewteen Total Asset vs Current assets. If possible pleass confrim whether total liabilities (excluding equity/ shareholders funds) exceeds total assets.
Thanks – Not fighting you – just trying to understand how sad I need to be
35@ Mufasa 007:
The Statement contains:
ASSETS
Non-current assets (which include Property, plant and equipment, Investment in subsidiary, Loans receivable)
Current Assets (which include amounts due from EPS, Lions Rugby (Pty) Ltd, Trade and other receivables, Cash and cash equivalents)
It is totalled to: Total assets
EQUITY AND LIABILITIES
Capital and reserves (Accumulated loss / retained earnings)
Non-Current Liabilities (Borrowings, Revenue received in advance, Post employment medical benefits)
Current Liabilities (Borrowings, Revenue received in advance, Bank overdraft, Trade and other payables, Amounts due to related parties – Golden Lions Sports Trust)
It is totalled to: Total Equity and Liabilities
The Statement contains a full beakdown of Income, Changes in Equity, Cash Flows… and a host of Notes to Financial Statements.
I hope that answers the question.
I know you’re not fighting with me or anybody else.
I just hope the GLRU finds it’s way open to play open cards and make this all available.
gbs @ 36
this is the part of meetings where i’d normally be singing a tune in my head
or
checking out the motjies (if there were any or if those who were present were worth checking out)
or
think of the funniest jokes i’ve ever heard
…
please explain to me: why would anyone put together A FORTY+ PAGE thing-a-magix
just to say “we’re in the kak”?
…
on the other hand,
must say,
i’m a bit enticed to bribe you 😉
to get a look at the report 😀
but
i doubt whether i’ll finish it, anyway!!
(yawn) jeez, i’m tired just imagining reading it!! 😆
…
hmmm, should i mail you or shouldnt i?
GBS, Isn’t it a sad day for the sport when this type of nonsense makes more news headlines than the absolutely brilliant Crusaders Rugby display from the weekend!
That said though, if the GLRU succeed in sweeping this thing under the carpet, it will be an even sadder day, and where are SARU in all of this?
Surely they have an obligation to SA’s Rugby community, and even more so the Lions, to step in and take charge of this situation and force an action plan to remedy it?
@ Ashley:
People put together documents like this almost as a smoke screen. The writer knows that very few people have either the ability or stamina to read through the whole thing, and so believe the BS they are told at the AGM where the financials are accepted.
A potentially very effective smoke screen.
The GLRU / Lions are also not doing themselves any favours with either their supporters or the SA Rugby community in general by not coming out and being truthfull about their position.
Can they not see that every minute they remain tightlipped, more and more people assume that where there’s smoke there’s fire.
Manie / Kevin, PLEASE tell us, your supporters, what is going on. No more ostrich antics please.
Just decided that because JHB’s roads are such a F up, and because too many Rugby administrator’s are lying, manipulative womens sexual organs who do more for themselves than for the sport, I am now going to sit down with a glass of Sedgwicks OBS and watch the Womens FIFA World Cup game between the Mud Island dwellers and the Slant Eyed Island dwellers. (England v Japan)
Goodnight all Rugby people. May the sun rise bright and warm tomorrow, and may the GLRU awake to find it was all just a bad dream!
@ Scrumdown:
no 22…”the Coke Tin probably has a “book value” of R20 – R 30 million (based on original building costs, depreciation etc)”.
Scrumdown one can revalue a property every year in the balance sheet and in fact all the big property companies do this, that is where they get the wherewithall to qualify for more loans to develop further. They can value it at replacement value (propably the higher option now) or do a market valuation based on nett income ( imagine this method is a cock up at present). It will be in their balance sheet at the revised value and looking at what GBS has been saying, I would say this assett is the only thing keeping their heads above water….but the loans are going to dry up soon. Here is a good takeover opportunity for someone. Perhaps we must form a company on behalf of the fans, let them buy shares and appoint the right people to run the company. We should ensure a liquidation claim goes in first though so that we can negotiate with the liquidators and that way exclude current management from any future say….unless we want certain individuals there.
@ grootblousmile:
no 28…..GBS an offer of the debt will probably buy the union, the best thing is to liquidate, get rid of management in its current form and rework it from there.
Hehe, what a surprise, the sun has indeed risen bright and warm per my request of last evening, well at least warm through the office window.
The question is, did the GLRU wake up to find it all just a bad dream?
Probably not.
A take-over is impossible.
Cannot happen until SA Rugby allows private investors to buy more than 49.9% in unions. Gumede highlighted this as-well some time back.
OK, let me appease the situation slightly here… taking the Current Assets vs Current Liabilities situation at a negative 44.2 million VERSUS the Nett Assets vs Nett Liabilities situation one finds that the Lions are better off but still on the negative side of things.
It is important, actually vital, that we reflect the whole scenario and not just the obviously negative aspects at first glance.
Now if only the Lions could see their way fit to come clean, then maybe a detailed analysis of the Financial Statements could be published by ourselves or by experts from elsewhere.
Investment by new Investors however, is still critical.
I didn’t know about the 49.9%. Stupid rule actually. SA Rugbys rights should be entrenched in the company constitution and should be a pre-condition for sale of a Union and be unchangeable. However, unless you have control you cannot run a company properly. One could then say that SA rugby is not truly professional. If I’m not mistaken Ruperts sport owning vehicle which has major shares in the Blue Bulls and Province I think, have recently bought a controlling share in Saracens. I believe they have also taken over Newcastle Football Club.
I agree with GBS there. Things look really bad on the face of things. Great assets, but cash flow is a big problem. An investor with business acumen and a passion for the Lions will hopefully turn things around.
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