Chiliboy Ralepelle of the Sharks breaks away with team mate Stephan Lewies in support during the 2016 Vodacom Super Rugby game between the Sharks and the Hurricanes at Kings Park Stadium, on 7 May 2016 © Gerhard Duraan/BackpagePix

Supporters of the Sharks should be informed that under John Smit and the KZNRU board, The Sharks have deteriorated from a sound financial position to approximating insolvency, writes Brian van Zyl

It was with concern and disappointment that I noted the recent resignation of Sharks chief executive John Smit.

I was in the position from 1994 until June 2013 when I passed on the baton of The Sharks to Smit.

Almost three years later, to my surprise and annoyance, Smit has chosen to move on.

I am concerned as it appears that although The Sharks have dire financial problems, which have become manifest over the last three years, there seems to be no culpability.

In good conscience I believe that all stakeholders, including loyal supporters of the Sharks, should be informed that, under the stewardship of Smit, the KZNRU president Graham Mackenzie and the board, The Sharks has deteriorated from a sound financial position to that approximating insolvency.

The story that is circulating is that Smit inherited a sinking ship, however in my last executive year, up until December 2012, The Sharks posted a profit of R14 million before dividends were paid.

These numbers can be corroborated by the audited and approved financial statements, which show a profit in each year since the formation of The Sharks (Pty) Ltd.

During 2013 and 2014 substantial losses resulted in an accumulated deficit of more than R40 million.

I suspect that a loss of another R20 million has been incurred since and I ask why the financials have not been approved by The Sharks board of directors for 2015.

As the KZNRU and The Sharks financials are consolidated, this would be the first time in its history that the financials have not been available for approval at the annual general meeting, which usually takes place in April each year.

Owing to this, I am concerned and suspect that the company is no longer a going concern and may technically be insolvent.

The KZNRU is reliant on The Sharks to receive a grant as shareholders’ interest which is used for sub-unions, clubs, and administration, including development and school rugby.

This impacts on the KZNRU 2016 budget, as it now shows a R3 million deficit with no allocation of shareholders’ interest payable by The Sharks.

Last week, Smit and Mackenzie said the shareholders had met and a plan was coming out and that the publication of the financials was imminent. I await this with interest.

This brings me to another issue, that of John Smit’s appointment as CEO.

The appointment was not the product of a rigorous process. He was privately approached, interviewed and appointed without my knowledge, consent or input. The day before his appointment, I was called to a meeting, where I was informed that Smit was taking over and I was to mentor him. The announcement would be breaking in The Mercury the following day.

I asked why I had not been part of the interview process and I was told that it was an oversight.

That’s one heck of an oversight and I asked to be put on record that I believed that John Smit was not the right man for the job because he was naive in business and had no administration record to speak of (he was still playing when he was approached).

In appointments of this nature, for a brand as big as The Sharks one expects widespread advertisements for the job, shortlisting and internal consulting processes followed by rigorous psychometric and competency testing.

Interestingly, I have noted that the search for John’s replacement included a tiny advertisement on The Sharks website which appeared from June 3, with applications closing on June 10.

If a candidate has been earmarked, I hope that he has a background in both rugby and business. Graham Mackenzie, as the president of the KZNRU, majority shareholder in The Sharks, has been a driving force behind many of the changes at The Sharks, including, I suspect, the appointment of Smit and I am unconvinced that Mackenzie is working in the best interests of club rugby. This is the foundation upon which the KZNRU is built.

It is my opinion that club rugby is not in good shape, and I worry about the state of Under 20. Mackenzie was elected to his position on the premise of ‘growing the game’, I have not seen this.

Finally, I am pleased to be informed that all stakeholders will be consulted before any move to Moses Mabhida is proposed, as during my time in office, rigorous debate regarding the financial implications were discussed, with the outcome being that the move was not financially viable.

What has happened to change this and what will happen to our beloved Growthpoint Kings Park stadium?

I find this quotation from Craig Jamieson, a former NRU general manager, on describing John Smit’s appointment as CEO in 2013, rather apt: “John Smit is a legend on the rugby field, but an under-19 player in the business world” (IOL, 14 June 2013).

I await developments with interest and growing concern.

* Van Zyl was the Sharks chief executive from 1994-2013.

The Mercury