Complaint against Phumelela bolstered

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IOL BR Phindi Kema 7754 (44310091) Independent Newspapers. Racehorse breeder Phindi Kema says Phumelela should have paid a proper price for tote and race course assets that the Gauteng government ceded for just R1. Photo: Simphiwe Mbokazi.

Johannesburg - Racehorse breeder Phindi Kema has bolstered her complaint to the public protector by submitting a document to the investigator which shows that while the Gauteng government gave away its horse racing assets for R1, the British government was able to sell similar assets for £180 million (R3.2 billion), £90m of which was set aside for good causes.

Kema, the first black racehorse breeder, has been campaigning against what she calls malpractice and improper conduct by Gauteng for years.

The office of public protector Thuli Madonsela has been probing the Gauteng transaction since April 2012 when Kema and her company, Africa Race Group (ARG), laid a complaint.

The investigation is expected to be completed soon.

The basis of the complaint is an agreement entered into by Gauteng and the National Horseracing Authority for the transfer of ownership of racecourse assets and the totalisator into the hands of JSE-listed Phumelela Gaming and Leisure for R1.

The courses had been owned by local councils and the tote by the province.

Phumelela later sold two of the three racecourses involved.

Last week Kema handed over to the investigator, Stoffel Fourie, a document that she had recently discovered.

In a press release on March 28, 2012, the British government announced that the racing half share of the £180m net proceeds from the sale of the Horserace Totalisator Board, also known as the tote, was to be given to a new charity and a grant scheme.

It said the charity, the Racing Foundation, had been set up by the industry to help charitable causes in racing.

The grant scheme, to be administered by the British Horseracing Authority, was for applicants from the racing industry for racing-related projects that complied with guidelines for state aid.

Kema said last Friday: “In South Africa, the tote gets transferred quietly and without any due process. What is it that our government doesn’t understand? They have lost a lot of money.”

After the Gauteng transaction, Phumelela went on to acquire the tote and horse racing assets in seven other provinces.

A rival racing operator, Gold Circle, acquired the horse racing assets of the Western Cape and KwaZulu-Natal.

The racecourses in the Western Cape are now managed by Phumelela.

Meanwhile, Kema and ARG have locked horns with Phumelela in another battle that ended up in the Constitutional Court.

This began when Kema wanted to buy the Arlington racecourse in Port Elizabeth from Phumelela.

After negotiations, no agreement could be reached on the price or on a suspensive condition imposed by Phumelela that Kema and ARG should use Phumelela’s betting licence.

Kema went on to thwart at the first instance an attempt by the Thoroughbred Horseracing Trust, a 35 percent shareholder in Phumelela, to acquire the Kenilworth racecourse in Cape Town from Gold Circle.

Kema made a complaint to the Competition Commission that Phumelela would be extending its monopoly on horse racing and gambling as it would manage the racecourse.

The commission refused the merger but the Competition Tribunal and the Competition Appeal Court granted it. Kema’s application for an appeal to the Constitutional Court was refused.


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