It all started on a promising note for South Africa. It was the year 2009 and the Indian Premier League (IPL), a massive 20/20 cricket event, was in the limelight.
A terror attack in Mumbai shortly before the IPL season was to kick off almost put the spoke in the wheel of the tournament.
Faced with the possibility of cancellation because of safety concerns and with an impending election in India that would run concurrently with the event, IPL organisers decided to move the competition to South Africa.
It was to be cricket South Africa’s lucky year. An event that draws large crowds in cricket-mad India, the IPL is also an incredible money spinner that usually makes both the betting bookies and the ticketing tills sing. Likewise, in South Africa it was a sell-out success, filling the coffers of the cricket community under the auspices of Cricket South Africa (CSA).
The ICC Champions Trophy, which followed the IPL extravaganza, was equally successful.
It is alleged that some R4.7-million in bonuses were also paid out to 20 CSA officials, with CSA’s chief executive, Gerald Majola, getting R1.8-million.
It is this bonus that lies at the heart of the scandal over payments that not disclosed to the remuneration committee of the CSA, as required by the Company’s Act.
Internal politics
Now two years old, and on its third commission of enquiry, the bonus scandal drags on.
What has come out of investigations is an image of CSA beset by allegations of maladministration, internal politics and strife as well as claims of self-enrichment by top officials.
On the insistence of CSA president Mtutuzeli Nyoka, an investigation was first opened into the affair in 2010. It was not a forensic “external” investigation as he had requested. Instead, the CSA led its own internal investigation into the allegations through the Kahn commission, headed by the current acting president of the CSA, AK Kahn.
Issuing its findings in November 2010, this commission cleared Majola of all charges of impropriety, stating that it did not believe Majola had intended to lie but that he was unfamiliar with what was required of him as a director and was therefore “naïve” rather than deceptive in his conduct.
The Kahn commission cautioned Majola but ratified the bonuses.
The cricket board accepted the commission’s findings and stated that it felt Majola and Don McIntosh, at the time the CSA chief operating officer, had done a magnificent job. All board members, bar one, found in favour of Majola.
Forensic audit
However, this was not the end of the saga.
Nyoka called for an external investigation into “deceptive and corrupt” activities at the CSA. In February 2011, a vote of no confidence by the board removed Nyoka from the presidential chair, but he was reinstated by the court.
A KPMG audit report followed. It found irregularities with the pay out of bonuses as well as certain unauthorised travel expenses. The latter refers to travel expenses for Majola’s family that could not be justified as being connected to cricket, including a trip to Sun City.
During the investigation, KPMG found that Majola made no reference to staff bonuses in his written report on the IPL that he presented or during his actual presentation which was made to the affiliated unions. Instead, he referred to it after he had finished his presentation.
The KPMG report noted that this was not considered to be “enough disclosure” as the Company’s Act (Section 325) stipulates that disclosure must be done to the board of directors, in detail, and in a specific way.
No other reference to disclosure of bonuses, either formal or informal, could be found during the investigation.
Of an amount of R2.7-million, 70 percent was paid to Majola and McIntosh – eight and seven times their salaries respectively, as confirmed by Herman de Beer, a KPMG legal specialist. Other staff members were given three or four times their salaries in bonus payments.
The KPMG audit also made recommendations that the CSA’s remuneration and travel allowance policy be reviewed.
Nyoka continued to call for an inquiry and in October 2011 the CSA board once more fired Nyoka.
In steps the minister
That same month, Minister for Sport and Recreation Fikile Mbalula took action, announcing the appointment of a ministerial committee to investigate the affair.
The Nicholson inquiry, under the chair of retired High Court Judge Chris Nicholson, began in November.
The terms of reference for the committee, included investigating the failure of the CSA to adhere to the KPMG recommendations as well as looking at the effectiveness and efficiency of the CSA administration.
Nicholson to the rescue
Formal hearings began on 23 November, with oral evidence from Nyoka, the chairperson of Remco (the remuneration committee), Thandeka Mgoduso and former CSA audit committee chairperson Colin Beggs, among others.
To date, the enquiry has heard from 20 witnesses and amassed some 5 000 pages of documents.
The commission begins again in January 2012, with Nicholson indicating that the committee wishes to conduct further oral interviews with other witnesses, among them John Bester, a member of the Kahn Commission of inquiry, and former United Cricket Board boss Dr Ali Bacher.
Judge Nicholson has stated that the committee would rely on “facts speaking for themselves”, before making recommendations to Mbalula at the end of February 2012.
The full transcripts of the hearings to date can be accessed online through the Sports and Recreation department website.
