Lions, GUMA battle takes an ugly turn

January 24, 2012
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Golden Lions Rugby Union (GLRU) president Kevin de Klerk says the statement issued on Tuesday from their former partners Guma TAC was “filled with many half truths” and says the union had never been unwilling to pay back any money.

Sport24

“They are entitled to pursue any kind of action, but it is their modus operandi trying to discredit us through the media,” he said.

“We will defend such actions and we will let the legal process decide.”

The Guma TAC group on Tuesday initiated legal proceedings to recover their loan following the souring of their relationship with the embattled Golden Lions Rugby Union.

“We confirm that today we have initiated legal proceedings to recover our loan from the Golden Lions,” the Guma TAC group said in a statement.

Guma TAC, which is jointly owned by Robert Gumede and Ivor Ichikowitz, cut ties with the GLRU in June 2011, shortly before it was to have purchased a 49.9 percent stake in the union.

Guma TAC said in a document leaked to the media last year that the GLRU owed the company more than R14 million in loans.

At the time, Gumede and Ichikowitz accused the Lions’ executive of keeping the potential investors in the dark, preventing them from playing an active role in the union.

Guma TAC said on Tuesday the GLRU had faced “huge” financial challenges and could not pay salaries before negotiations to form an equity partnership came to an end.

“We provided the Lions with millions of rands to enable Kevin De Klerk’s management to pay the salaries of the Lions’ players and staff for both the months of December 2010 and January 2011,” it said in the statement.

“Had the Lions failed to pay the players’ salaries over this period, it would have led to the breach of players’ contracts, which would have led to an exodus of key players, if not all.

“Furthermore, the loans enabled the Lions to sign top international players like Butch James and Lionel Mapoe and to pay the 24 amateur feeder GLRU clubs their GLRU grants.”

Guma TAC said it had also funded the salary of Lions’ conditioning coach Wayne Taylor, which was allegedly several months in arrears.

It said the GLRU had denied taking a loan from its former potential equity partner.

“This behaviour is a continuation of the bad faith which the Lions’ executive… displayed in the negotiations regarding our rescue and investment in the Lions.”

Guma TAC denied media reports that their lawyers had been in discussion with GLRU legal representatives regarding an arbitration agreement.

“It hurts us to have to turn to the courts to recover money that was loaned in good faith at a time when the Lions’ bankers refused to extend further credit facilities and the Lions’ president, Kevin de Klerk, turned to us in desperation to advance funds to pay, among other commitments, the Lions’ players and staff.”

De Klerk said the union had been in discussion with Guma’s lawyers before the claims were made.

“It smacks of lack of understanding they have about the sport of rugby and ethos of the game. They are the ones that moved out,” De Klerk said.

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8 Comments

  1. avatar Kat says:
    January 24th, 2012 at 8:14 pm

    Gunmede … tac tac tac … [reload] … tac tac tac …

  2. avatar Kat says:
    January 24th, 2012 at 8:24 pm

    Gunmede will have to prove GLRU concent and agreement for every claim. The way I see it he did a lot of the spending without proper consultation and agreements … as is his style. He was running his Manchester United club. I just hope a judge takes the bench that is not on the “family” payrole.

  3. avatar Timeo says:
    January 25th, 2012 at 12:25 am

    The ethos of the sport of rugby explained:

    1.We will sell you a 49.9% share in our team for mega-rands.
    2.You will have no say in the running of the union.
    3.You will never receive any dividends or profits from a sale because the team cannot be sold.
    4.In case of a bankruptcy, your 49.9% will be worth nothing whilst our 50.1% will still own the most valuable asset ie. The right to host CC, SR, and Tests.
    5.The reality of point 4 is that repayment of loans will be at our sole discretion.

    The question then is, why would anyone want to be an equity partner?

    What do the current ones get out of their stakes?
    Marketing; prestige; test tickets; the inside track on deals?

  4. avatar Kat says:
    January 25th, 2012 at 3:21 pm

    Reply to Timeo @ 12:25 am: GumaTAC was after the equity portion despite the things you mention and the Lions found a replacement when they pulled out. Other teams have partners. There must be something of value in it to make it worth it. Nobody throws money away (except smokers … and those paid in Zim dollars).

  5. avatar Timeo says:
    January 26th, 2012 at 3:09 am

    Reply to Kat @ 3:21 pm:

    That there is something of value, goes without saying. The question is: What?

    When the thing of value is not open and clear, it is usually nefarious. Is that the “ethos” of the game then?

  6. avatar DavidS says:
    January 26th, 2012 at 7:58 am

    Reply to Timeo @ 3:09 am:

    My understanding from English football and French rugby is that the “thing of value” for the owner is in one thing

    EGO (of the owner)

  7. avatar Timeo says:
    January 26th, 2012 at 2:03 pm

    Reply to DavidS @ 7:58 am:

    Make sense in those cases (also American sports) but not in the SA deals.
    Not having total control will hurt the ego. More so with the elected amateurs being in control. Which perhaps explain why Guma walked away.

    None of that is apparent in the SA equity partner deals.

  8. avatar DavidS says:
    January 26th, 2012 at 3:00 pm

    Reply to Timeo @ 2:03 pm:

    Must be true then.

    Same applies to the Kiwi deals.

    Must be why the fanfare and suggested ultra success and holding out as a model for the future (and lauding by certain elements in South Africa) has resulted in buggerall.

    The truth is that on the presently suggested model for rugby in New Zealand and South Africa there is no incentive for an equity partner to become involved.

    It was the exact point I tried to make concerning the Kiwi S15 franchises.

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