Former partner: Lions bankrupt

2011-06-30 22:19

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.


  • Ano Nymous - 2011-06-30 22:33

    How nice -- you invest badly, and then your lawyers negotiate on how to get your money back! I wish I could do that with my tax!

      Nfusitjie - 2011-06-30 22:45


  • Morne Barlow - 2011-06-30 23:49

    Racist Comment

  • Neil - 2011-07-01 00:05

    As long as GLRU expect rugby fans to take their family's into one of the most dangerous places in South Africa (no matter what the quality of the stadium is once you are inside) to watch a game of rugby, they will never get consistent crowds, will only fill the ground for test matches and will therefore continue to run at a loss. You cant ostracize the supporters year in and year out and still expect them to blindly support the team, so the TV advertising revenue will also dwindle. Any CEO should be able to figure this out in a heartbeat. Luyt had a chance to rebuild the stadium in the North of JHB years ago but chose not to, this demise has been 25 years in the making.

      Uwe Klopfer - 2011-07-01 08:28

      i agree doornfontein isn't the prettiest place in downtown joburg. but putting your family at risk to attend a game ? I have been regularly attending games at Ellis Park since i was about 8 or 9 years old and 20 odd years later I am still awaiting to hear or experience someone being mugged, murdered or raped before, during or in the aftermath of a rugby game at the stadium. your comments sir are pointless and based on your own opinion...not fact

      Neil - 2011-07-01 12:30

      @nixcroft - It is a fact that the rugby attendance is shocking. It is almost undoubtedly, in some way, due to the location and associated security risk of the stadium. At 29 years of age, you might not have small children, but I can assure you, walking them through the dodgy surrounding area is not fun. In addition, the security risk removes any incentive to attend the game as you can't happily stay with your family for a braai after the game as with CT or Durban. Another fact is that the union is just about bankrupt. How many more facts do you want? And I don't know how often you have tried to sell anything, but it is opinion rather than fact that makes the sale, and by the look of the ticket sales of late, more people seem to share my opinion than yours. As for pointless, I cant see much point, fact, reason or logic in your argument. So why did you bother?

      Lions Man - 2011-07-01 13:42

      Neil you are lacking logic. The reason the fans are not there is because the team loses. Simple as that. If your theory was to hold water then why was the stadium full for the first couple of games this season when everyone believed there would be a turn around? and why is the stadium full during Springbok games? If your theory held any water whatsoever then the stadium would NEVER have spectators, regardless of if the Boks are playing or not. Are you now going to risk your life to watch the Boks play a game? That's what your theory is promoting. What has the fact that the union is supposedly bankrupt got anything to do with the argument?

      InternetMan - 2011-07-07 14:33

      My brother was mugged outside Ellis Park after a game. Anecdotal evidence is the best evidence :)

  • Goddok - 2011-07-01 01:03

    Where there is smoke there is fire. These are serious allegations if leveled against any business. What amazes me is the underlying denial from the union that it is nothing and they will survive because they had for 120 years. I have news for them, they will not. If I was in the shoes of GumaTAC I would also have walked away. To those that allege that their decision is racially motivated is ill informed, it is purely a business decision. Kevin it is time that you face the fact that you expect change but still do things the way you have done before - Total Madness!!!!

      Johan - 2011-07-01 09:47

      The real reason Gumede walked away is because Gumede can't call the shots!! This is in terms of the ownership laws by SARU. Now I think he has some sour grapes. ABSA in my opinion will be stupid to pull out now! The GLRU are at a turnpoint, this was very clear in the super rugby competition! Businesses face tough times...the guys before him screwed up! If I am not mistaken I thin there where a odd 40 000 people when the Sharks played the Lions. This is sour grapes...because why would you want to go and hand in a document at sport 24!!! Its got nothing to do with sport its business!

      Lions Man - 2011-07-01 13:48

      I agree Johan. Who goes and hands 'confidential documents' to the press...

  • Rasky - 2011-07-01 06:20

    i smell big rats...............Ivor and co.

  • Mikus - 2011-07-01 06:52

    It's gutting that something as sterile as money (or lack thereof) can destroy the life, tradition and spirit of a dominant rugby union, a cheerless day for any supporter. I hope the TRU can soon get their house in order and get back to competitive ways no matter who in in control. (....and I'm a Stormers supporter)

      Greg - 2011-07-01 11:25

      Sorry whats TRU?

      Lions Man - 2011-07-01 13:50

      Transvaal Rugby Union. Its a free country... Its certainly no ones place on here to try and correct him.

      kameeldoring - 2011-07-01 14:51 hom wors, blerrie munisipaliteit mense?

      InternetMan - 2011-07-07 14:35


  • StBad - 2011-07-01 07:13

    Well for a team that hasn't had a half full stadium in recent history and who hasn't properly performed in a good couple years it's hardly surprising. Hope they pull something out the bag because SA Rugby (and the Joburg public) need a winning team

      InternetMan - 2011-07-07 14:36

      There were 40k people at the sharks lions game. I didnt read the rest of your comment.

  • Oukoos - 2011-07-01 07:51

    It sounds as if the end is near for the once proud Transvaal rugby union. What a pity

      SAFFA-CAT - 2011-07-01 10:50

      Agree with you @Oukoos. Any true Saffa rugby fan should be devastated at these latest revelations. Dick Muir the twat - getting a FAT salary for doing zilch? The administrators seem to be clueless. It's neither fair nor right! Nee man - SARU should seize control of the union, appoint a team of frikkin experts to pull the bloody union right. South African rugby NEEDS the Lions. Nee oh hel, this is heartbreaking!!!!!!!! (and I'm a WPRFU groupie so imagine how the players, coaches and TRUE Lions fans must be feeling)

  • GHT - 2011-07-01 08:16

    Hmm. Conspiracy theorists will probably jump on this linking the government, the kings and watson.

      Marius Swart - 2011-07-01 11:31

      @GHT.Jy is reg Mnr Watson gaan hierdie tot sy voordeel gebruik.Sal nie verbaas wees as daar nou voorstelle is dat die Bulle en die Lions saam gooi word vir die toekoms.

  • sonnyg - 2011-07-01 08:56

    I am more likely to believe the Guma on this one. Not sure how Dick Muir can be director of rugby of a province and an assitant bok coach.

  • Marcus - 2011-07-01 09:24

    I agree with Nixcroft , i`ve been to Ellis Park on lots of occasions and never once felt unsafe or threatened , plus there is always the "Park and Ride " which drops you close to the Stadium . They need to up the Marketing of the Lions and try and use the stadium for Concerts and other large events to help boost their Revenue`s as well . I watched the Rolling Stones concert there years ago and it was a huge success . Lets preserve what`s been part of Jo`Burg for a very long time !!

      Lions Man - 2011-07-01 13:51

      They need to WIN and then the fans will come... simple really.

  • Matador - 2011-07-01 09:39

    SARU, I hope you see what happens if a team doesn't win(read: that will be the result of quotas ). No support, no money, no rugby. If you guys stuff SA rugby up for quotas, that's what SA rugby(as a whole) will look like. Keep politics out of rugby and see the money flow or suffer!!

      Aabels - 2011-07-01 09:57

      You are a racist my brother, a racist with racist tendencies. Malema will come and visit you soon.

      TerraFic - 2011-07-01 10:06

      @ Aabels: Maybe Juliarse should visit the Lions rugby union and rather pump some of his (our) riches into the GLRU. I mean theres a lot of his "comrades" involved in the union...

      Matador - 2011-07-01 12:02

      No really Aabels, the only racist here is you. If you cannot figure for yourself that politics should stay out of rugby, you have a lot to learn, like Malema and if he want to visit me, I can't wait!! Why threaten me with Malema? Do you really think I should be scared of him? You must be his clown brother. You and the masses should be scared of him, not me, he steals from you guys and you support him, what a bunch of clowns all together.

      Lions Man - 2011-07-01 13:53

      OMG 'its' a TROLL...

      kameeldoring - 2011-07-01 14:55

      aabels genaabels, waarmee is jy

  • SHARONVDM - 2011-07-01 10:07

    @ NIXCROFT,Well we had season tickets at Ellis Park,for years, but in one day we were mugged on the way out & so were 2 other people we know in separate incidents - so guess what - no more season tickets ,rather just watch tv!

      Lions Man - 2011-07-01 13:57

      So the people that get held up in their houses in Sandton should sell and move else where? I'm not trying to trivialize what happened to you and my apologies if its seems that way, but by that logic no one would be able to go anywhere in this country because crime happens everywhere and you no safer in Sandton than you are in JHB. Take for example the area I live in, according to crime statistics, the supposedly secure townhouses are targeted and not the houses.

  • red - 2011-07-01 10:35

    This Guma is a suspicious lot They swindled our Department of Home Affairs for a few hundred million Rumours are that Tourvest(subsidiary) is in trouble Now the GLRU These guys are al about making money the wrong way , so its good the relationship ended.... HOWEVER , those Lions boys need to wake the f*%^up and start playing some serious rugby !! The most powerful city in africa cannot even produce a winning team or a semi winning team, players need to take responsibility and as John Mitchell says, mediocrity must not be accepted. I would think this winning mentality should be a pre-requisite for a player. Make Joshua Strauss captain !

  • Leon Janse van Rensburg - 2011-07-01 13:15

    It's time for the kings

      Lions Man - 2011-07-01 13:58

      From the Union that hasn't played first division Currie Cup in how many years exactly?

      kameeldoring - 2011-07-01 14:57

      leon, nout jy weer glad nie gedink nie boet.

      Johan - 2011-07-02 08:50

      for the kings to do what are you a watson supporter what a dick

  • kameeldoring - 2011-07-01 15:14

    Ek se verkoop die park, skyf na n ander stadion, want die gevaarlike stigma hang aan Ellispark en dit sal niemand kan verander nie. Regestreer op die JSE en verkoop aandele aan die suporters en companies, wie ookal wil in koop. Kry nuwe bestuur in en maak Garth Wright die president van GLRU. Maak skoon nou en kry klaar, mense soos Dick Muir moes moit eers deel van GLRU gewees het nie, jaag hom so gou moontlik weg en blixem sommer die ou wat hom aangestel het ook. Hou die speelers wat tans daar is teen alle koste en wen die Currie Cup, dan sal dinge begin spoed vat met borge en suporters wat geld in bring. Net my opnie!

  • lenand40 - 2011-07-01 15:32

    I wonder what the reaction would be if the investor was white and the company being accused of being bankrupt was government or black. I suspect the reaction would be reversed. At the end of the day, if you invest your money in a deal and you find out you were lied to, then that is a breach and getting your lawyers involved to recover your losses is standard procedure.

  • Greg - 2011-07-02 17:34

    Assume Guma was a white investor and he made the same allegations as being made now, would everyone be calling him names like now? Grow up people. There's something really wrong here.

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