Possible conflict of interest aside ... Zelt Marais’ ‘War Room’ could cost WP more money
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Cape Town – Following Western Province Rugby Football Union president Zelt Marais’ setting up of a ‘War Room’ to help save the cash-strapped union, it appears that the services of the experts appointed to achieve this could not only come at a high cost for the union, which is not what Marais relayed to constituents in his proposal, but also face a conflict of interest challenge.
A central figure of Marais’ StratCo, Philip Burns, who is also a board member of Western Province Professional Rugby, was appointed by Marais to head up the union’s financial turnaround and secure investments.
A document in IOL Sport’s possession suggests dealings between Burns and Marais going back to 2019. A consortium which includes Freeworld Capital Holdings, headed up by Burns, approached the union with the intention of finalising a business deal between the two parties. The document also mentions Godfrey Afrika, a union council member, who was promised a "role and participation" that "was noted for inclusion into agreements”. It is understood that Afrika is a supporter of Marais and a vocal opponent to the Saru recommended Staytus deal that is currently on the table.
Given Burns’ intentions and his role in the StratCo now, an area of concern is his personal and corporate interests and if these were declared upfront. The proposal put forward by Burns included him taking control of a Special Purpose Vehicle set up to deal with the corporate strategy and capitalisation of WPRFU, with the Unions property assets and brand rights securitised to the value of approximately R200 million.
When asked why Burns was chosen to head up finances over any other members of the board or executive committee and if conflict of interest exists, Marais said: “The StratCo was initiated as a think-tank to anticipate and appreciate the myriad of challenges in the current business environment and to facilitate and undertake forward-thinking business scenario planning exercises.”
While Marais assured that members of the StratCo were “contributing in good faith”, he failed to answer whether Burns or Freeworld Capital Holdings – or any other member of the StratCo – had been subjected to due diligence or conflict of interest prior to their appointment.
Ebrahim Rasool, chairman of WPPR, was approached for comment on whether Burns’ role in the War Room is as a board member and whether a due diligence was done before his appointment to the board.
He said: “Mr Philip Burns is indeed a board member of the WPPR company. As with all board appointments, the members are selected by the WPRFU Exco and then placed in the board as a director.
“As chair of the board, together with the other board members, we would assume that the shareholder would do a full due diligence on the people they place on the board. This is a matter entirely in the domain of the shareholder.
“Should any problems emerge with a member of the board relating to matters that may be a conflict of interest, we would check whether the member has declared such in the Declaration of Interest Form every member signs prior to every board meeting. Any failure to do so where it is material, must then be handled according to the relevant laws, regulations and codes.
“As to Mr Burns’ role in the War Room or StratCo established by the WPRFU is at the pleasure of the president of the WPRFU, and not as a member, nominee or secondee of the board of the WPPR.”
When Marais presented his War Room to the clubs, he did so by also saying the experts were coming in pro bono. When asked about this, Marais said: “Participants have contributed, essentially, on a pro bono basis, in other words, a willingness by the participants to waive any formal, onerous, professional fees, for at least the early stages of the intervention and involvement.
“Where additional, specific services are required over the short term, it would be provided at a greatly reduced or nominal charges, on a delayed payment basis. This will only apply to certain requirements over and above the core Stratco contributions from individual team members.
“The net cost contribution and practical running costs of the external team members will be limited to actual costs incurred such as travel and accommodation.”
However, it has emerged from documents that Marais had requested a substantial budget for his war room. Marais also goes on to state that each one of the experts in the war room can earn between R30 000 and R 50 000 per day – this despite the union’s financial woes and ongoing sagas and looming legal battles.