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Firdose Moonda
October 16, 2011
South Africa's sports ministry will establish a committee to look into Cricket South Africa's (CSA) handling of the bonus dispute. The issue was thought to be closed yesterday after former president Mtutuzeli Nyoka was removed by a vote of no-confidence, supposedly ending a 16-month long spat with chief executive Gerald Majola.
However, the government has decided to intervene after CSA chose not to make public the findings of the forensic audit into bonus payments conducted by KPMG, and ignored subsequent legal advice by advocate Azhar Bham. The ministry called Nyoka's removal a "decisive action of the board," but is displeased with CSA's overall handling of the saga.
"Nothing has been resolved," Fikile Mbalula, the sports minister, told reporters in Johannesburg. "Our cricket is diminishing, we don't have sponsors, we don't have a program of action in terms of what needs to be done, all because of a board of people who differ among themselves. We are intervening."
Mbalula said the ministry would act in accordance with the Sports and Recreation Act to appoint a committee under a retired judge, whose name has yet to be announced. The terms of reference will be announced next week and he hopes the matter will be concluded "before Christmas." He said the ministry is choosing to intervene because they feel they have given CSA "a chance to resolve their issues within a reasonable period of time."
The differences pertain to the payment of R4.7 million (US$ 671.428) in bonuses to 40 CSA staff members, including Majola, for hosting the 2009 IPL and Champions Trophy. However, those payments were not authorised through CSA's remunerations committee (REMCO) and were picked up as irregularities. Nyoka had repeatedly pushed for an external audit and had already lost one vote of no-confidence and had to win a court battle to be reinstated.
KPMG were eventually tasked with looking into CSA's financial affairs and found that Majola may have breached the Companies' Act on four counts. They recommended legal advice which resulted in a severe reprimand for Majola. However, the spat between Majola and Nyoka had not cooled, as Nyoka struggled to gain access to various documents. Nyoka was then removed for a second time on Saturday, with CSA claiming he had breached media protocol and the Companies' Act by taking his honorarium in advance.
Although the KMPG report and Bham opinion have not been released to the public, Mbalula said he has viewed both documents. "Bham endorsed the fact that sections 234 and 235 of the Companies' Act were breached by Majola and this constitutes serious contraventions of the Act. CSA has possibly not applied its mind properly to the relative seriousness of the findings," he said. Another advocate, Paul Pretorius, also presented opinion to CSA, which concurred with Bham's findings. Mbalula indicated that the ministry did not feel CSA took the advice seriously enough, both in their own internal inquiry under acting president AK Khan and when presented with outside, expert opinion.
"That commission never came with its recommendations that there are irregularities of payment of bonuses," he said. "KPMG says there are irregularities, the board goes and takes another decision." He also implied that the personal spat between Majola and Nyoka may have played its part in the board's thought processes.
"It's quite interesting that the board can decide to dismiss somebody [Nyoka] but they can't take action on allegations of corruption. It can take a decision about somebody who is challenging its own decision, run to provinces but it can't act to protect good governance within its own body. It just says that people should be reprimanded."
Mbalula also said he received a call Saturday night from influential people are asking him to intervene. "I got a call last night, people saying, 'What are you going to say, let go, not to be involved," he said. "I was in the police, nobody can touch me. I'm not going to be threatened."
The well-known heavy discipline, Mbalula said the allegations that bonuses were paid in this way is the CSA for years, not influence. "If the Secretary previously ignored, that bonuses were paid on an irregular basis, Two wrongs do not make a right," he said. "I can not ignore it now." Insiders said that the reason for the CSA to pay bonuses without the consent or knowledge of their remuneration committee is due to the previous World Cup 2003 and 2007 World T20.
"What shall we say of the following combination, which swallows the money?" Mbalula asked. "We must be decisive against corruption. I am ready to quit my job, but I will not turn a blind eye to it. If you did well, you get a bonus, but it can not happen to corporate governance. Corporate governance means that the board shall meet and decide. "
He asked the developers to "hold their breath" and be patient while the problem is resolved. CSA have not been able to ensure that the donor of the T20 series against Australia, ODI or not the event's sponsors and testing of two of the three national competitions without sponsors. The companies have said they do not want to associate with the body until a line has been drawn into the scandal continues.
CSA may have thought that the line was developed with the overthrow of their greatest critic, Nyoka and the appointment of Khan, but they seem to have been wrong. Mbalula failed to lease meet Khan, saying he would not be appropriate in the current situation "You only have to congratulate someone who was elected in a democratic process is not out of the crisis."
The CSA said it would cooperate fully with the investigation of the Ministry of handling the advice of the independent audit. "I can promise the minister of our cooperation," Khan said in a statement. "We will study the full statement once we have received and hope to discuss the matter with the minister when we meet this afternoon."
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