WP Rugby Football Union president Thelo Wakefield. Photo by: Tracey Adams WP Rugby Football Union president Thelo Wakefield. Photo by: Tracey Adams
Cape Town - Scandalous allegations that Western Province Rugby (WPR) faked bankruptcy for ulterior motives have emerged in an urgent application at the Western Cape High Court which one of its partners lodged this week.
WPR was provisionally wound up a week ago amid claims that it suffered an operating loss of more than R12 million in the 2015 financial year, that its overdraft facility with its bank was as high as R19m and that it was left without funds to cover operating expenses.
However, its advertising partner, Aerios, claimed in court papers this week that the winding up was nothing more than a ploy by WPR to extricate themselves from what they consider to be a bad bargain with Aerios.
Aerios concluded an advertising rights agreement with WPR in 2011. Aerios CEO Constantinos Constantinou stated in an affidavit that WPR had conducted itself in a “disgraceful” manner since then, allegedly selling advertising rights without its consent and negotiating a sponsorship contract behind its back.
He said Aerios had had to resort to approaching the courts to compel WPR to comply with the advertising rights agreement. A meeting with WPR had been held in October when an overarching statement of disputes was discussed, Constantinou said.
Aerios had been amenable to allowing WPR to sell certain rights to sponsors, subject to a fee.
WPR had indicated that it would seek approval at a board meeting on November 7.
“There was no suggestion that WPR was contemplating being wound up or that it was unable to pay the amounts contemplated in the settlement agreement,” he said.
It had therefore come as a shock to him when he heard, via media reports, that WPR had been provisionally wound up on November 7 at the behest of the union.
Aerios had obtained a copy of the court papers and, according to Constantinou, the financial statements annexed to the papers dated back more than a year and WPR’s forecast for 2017 was not substantiated with supporting documents.
Constantinou also pointed out that the financial statements it presented reflected that R23m of its liabilities was for “monies received in advance”.
This liability was more apparent than real, he said.
“On the contrary, the greater that liability, the more successful WPR has been in generating income in the course of its operations.”
Hesaid WPR had made several payments to it this year, including R2m, just days before the provisional liquidation.
“A company able to make those sorts of payments over such a short period hardly strikes one as a company suffering a cash flow problem,” he said.
This week the parties reached an agreement, which has been made an order of court. Aerios has been given leave to intervene as a party in the liquidation proceedings, which return to court on December 12.
Weekend Argus
