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.’