Former partner: Lions bankrupt

2011-06-30 22:19
Kevin de Klerk (File)
Pieter Jordaan

Johannesburg - The Golden Lions Rugby Union (GLRU) is totally bankrupt according to a document sent to GLRU president Kevin de Klerk by the GumaTAC Group.

Debt of several millions of rands, including a loan of R30 million with ABSA that the GLRU has to pay back by Sunday, a claim of having to pay back around R14 million and the inability to pay salaries, are mentioned in the document.

The document is part of the explanation by Robert Gumede and Ivor Ichikowitz of the Guma Group about why they have ended their partnership with the GLRU.

The confidential document, which was sent to Sport24, was submitted to the GLRU president on June 27 and signed by Gumede and Ichikowitz.

De Klerk said in his reaction to the allegations contained in the GumaTAC-document that he already has an offer for a new equity partner.

"Every item in that document could be disputed. It is them (Guma) who walked away. Some of the clauses still needed clarification. All I want to say is that the GLRU will survive. The union has survived for 120 years and will continue to do so," he said.

De Klerk is not too concerned about the allegations of the R30 million loan at ABSA. He said that he had inherited the debt.

He also guarantees that employees and players at the GLRU are not at risk of suddenly not receiving their salaries.

The following allegations are included in the Guma correspondence:

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 were 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 July 3.

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.

GumaTAC argue that they have invested R14 million in Lions rugby to date and the businessmen's legal representatives will enter into talks with the GLRU to negotiate about how the money is going to be repaid.

Read more on:    kevin de klerk  |  johannesburg

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