The group said that it would challenge the sweeping remedial actions it recommended.
“Phumelela has received the public protector’s report regarding the corporatisation of the thoroughbred horse racing industry. Phumelela has been advised to apply to the high court to have the report reviewed and set aside,” Phumelela said.
“This application is being prepared by Phumelela’s legal representatives and will be instituted within the next few weeks.”
The protector this month ordered the Gauteng Gambling Board to take urgent steps to conduct an audit of all state-owned assets that were transferred to Phumelela Gaming and Leisure for “a song”, with a view to establishing their origin, value on transfer and ownership prior to transfer, as well as to establish whether they were utilised for the benefit of the horse-racing industry and citizens who are affectionate about the sport of horse racing.
Mkhwebane also wants the 50percent bookmakers’ levy, which is paid to Phumelela by the Gauteng Gambling Board, to be stopped and channelled to a new entity that will serve as the regulator for thoroughbred horse racing.
The public protector’s investigation found that more than R700million from 1997 to 2009 emanating from bookmaker’s tax and levies had been passed on to Phumelela by the gambling board.
Wisani Ngobeni, spokesperson for the Gauteng Gambling Board, said: “The board will convene an urgent meeting very soon. This meeting will consider the report of the public protector and take a decision on the way forward.”
The investigation by Mkhwebane followed a complaint by businessperson Phindi Kema that a 1997 decision by the Gauteng provincial government to privatise and restructure the horse racing sector in the province was illegitimate.
Kema said litigation was not ideal and that Phumelela ran the risk of embarrassing itself.
“What we need is an adult industry conversation with Phumelela about the assets as per the report. This can be done the easy way in order to mitigate risks including those relating to our bleeding industry or the hard way where authorities will step in and do the job,” Kema added.
“To wait two to three years for a court decision is a pain that Phumelela cannot afford they must get real about their precarious situation.”
Phumelela’s share price has plunged more than 72percent in five years and closed on Friday at R6.20 a share, valuing the company at just under R700m.