Lions-Guma doomed from the start
There was no way the marriage between the Golden Lions Rugby Union and Guma ACT was ever going to work. The most cursory analysis of the situation between the two sets of parties would show this.
Given the cloud and speculation hanging over their joint management teams, Guma decided on Friday to go public regarding its reasons for walking away from the deal.
The cash-strapped union now faces a torrid few days as it has many obligations to meet.
Guma is demanding R14 million back for cash it loaned to meet payroll over the festive season. In addition, unconfirmed reports indicate the Lions have to repay a R30 million loan to Absa by Monday.
Among the most amazing claims made by Guma is that Dick Muir has been paid around R190 000 a month despite not being involved actively with the union for 13 months. And that 90 players are contracted and paid despite many of them not attending practice.
It has also been stated that CEO Manie Reyneke has cancelled all board meetings since April, preventing visibility into the union’s operations.
The Lions ended second from bottom in the Super XV.
Despite the millions invested, the Lions managed only to attract Butch James, who then went on to be suspended for four weeks for one of his infamous head-high tackles.
It is worth examining the track record of the parties involved:
– Robert Gumede is CEO of Gijima. His company failed to deliver a key contract for the department of home affairs, which then settled out of court for a loss of R389 million. http://www.techcentral.co.za/gijima-settlement-costs-home-affairs-r389m/24208/
– He has been involved in a years-long battle with the Mail & Guardian, and has accused investigative reporter Sam Sole of bribery.
– This ultimately led to the SABC having to publicly apologise to Mail & Guardian for these claims, after Gumede made the claims, and the SABC failed to give Mail & Guardian right of reply.
– Guma partner Ivor Ichikowitz is deeply involved in global arms trade as CEO of Paramount. While no wrongdoing can be inferred or stated, the arms trade is always up to its eyeballs in controversy. Just this week he unveiled a major arms manufacturing deal in Azerbaijan, a country classified globally as “not free”, although it has some trappings of democracy. http://www.azernews.az/en/Nation/34277-Azerbaijan_to_co-produce_60_more_armored_vehicles_with_Paramount_Group'
– Lions CEO Reyneke is constantly cited by insiders as the disruptive influence at the Lions, spanning generations of management.
– President Kevin de Klerk inherited a disastrous situation, and while he is a top businessman, it is almost certainly beyond his scope to save the sinking ship. All reports are that he has operated across all spheres in good faith.
Useful quotes:
– “Our insistence on ensuring that the Lions executive team be reconstituted and led by a CEO with a proven track record of turning around failed businesses has been met with resistance.” – Gumede
– “It is very sad that once again in South Africa and South African sport the petty infighting within the management structures are holding back progress. There is an emotional aspect to this and we set out to make an example of transformation.” – Ichikowitz.
– “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. 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.” – De Klerk
– “Sure, Lions rugby has 120 years of history, but it’s not all good history and they seem to be embracing the past rather than looking at how they can change and improve in the future. I really thought that South Africa, after 17 years of democracy, had come of age the day we announced this deal. I’m disappointed, gutted and emotionally hurt that my perception that South Africa was ready for a deal like this was incorrect.” – Ichikowitz
– “If they have other offers to do what we couldn’t, good luck to them — but I want to meet that businessman and check his sanity.” — Gumede
– “Our walking away from this deal is not a racial issue. It is simply that the Lions is not being run like a company; it is being run like an amateur union. — Ichikowitz
TechCentral editor Duncan McLeod attended the press conference at Melrose Arch. His podcast is here: http://www.techcentral.co.za/talkcentral-episode-43-canned-lions/24267/ – Frank Heydenrych, SportsCentral