Hier Kom Kak

This matter has now moved into the realm of the Public Protector and represents a nice soft politically palatable issue for everyone to sink their teeth into. I fancy the former CEO of Phumelela might now be anxious to let his shares go for quite a lot less than the R50 per counter he cited some months ago........

Public Protector Busisiwe Mkhwebane yesterday hit out at the race horsing industry for lack of transformation and ordered the Gauteng Gambling Board to investigate state-owned assets bought by listed Phumelela Gaming and Leisure.

Mkhwebane, in a report on horse racing in South Africa, said the chief executive and board of directors of the Gauteng Gambling Board must take urgent steps to “conduct an audit of all state-owned assets which were transferred to Phumelela Gaming and Leisure for a song with a view to establishing their origin, value on transfer and ownership prior to transfer, as well as to establish whether they were utilised for the benefit of the horse racing industry and citizens who are affectionate about the sport of horse racing”.

She also wants the 50 percent bookmakers’ levy, which is paid to Phumelela by the Gauteng Gambling Board, to be stopped and channelled to a new entity that will serve as the regulator for Thoroughbred Horseracing in the country.

Mkhwebane has estimated that 50 percent of the annual gambling levy paid by gambling boards across the country to Phumelela is in the region of R70m. The public protector has given the Gauteng Gambling Board a month to present her with a plan on how it will implement her recommendations and wants all of them done in the next six months.

The investigation by Mkhwebane followed a complaint by businessperson Phindi Kema that a 1997 decision by the Gauteng provincial government to privatisation and restructure the horse racing sector in the province was illegitimate.

Mkhwebane further hit out at former Gauteng MEC of Finance and Economic Affairs Jabu Moleketi for the decision to restructure the horse racing industry in the province.

She said the decision saw the sport handed on a “silver platter” to Phumelela. “It appears the Gauteng Provincial Government’s intention was to protect the new entity that was later called Phumelela Gaming and Leisure at all costs and ensured it succeeded,” Mkhwebane said.
“So many role-players and architects of the corporatisation of the horse racing industry subsequently became directors of a private company, Phumelela Gaming and Leisure. The shareholders of Phumelela unjustifiably benefited from public funds in the form of 50 percent of the 6 percent levy on bookmakers. ”

Phumelela, already engaged in a legal battle with the Gauteng Gambling Board, wants the court to review and set aside the board's amended regulations that will see a 3 percent cut of all winnings in Gauteng paid to it stopped.

Phumelela has said the proposed amendment to the gambling regulations could cost it R75m a year and could damage the local horse racing industry. It said the betting tax it received in Gauteng accounts for 90 percent of its betting taxes in South Africa.

Phumelela said it was still studying Mkhwebane’s report and will comment on it in due course. (Study away, boys!)

The Gauteng Gambling Board could not be reached for comment. (Perhaps they were down at their local KFC scheming what to do with this potential windfall)

.......Sooooooooo.......if this matter has its intended outcome then we should be confidently expecting a substantial reduction in management benefits and a massive increase in stakes. Right? Yeah, right.

What a joke, we are going to throw the baby out with the bath water?

That Phumelela received assets for nothing and have returned profits on these assets to third parties with little if no re-investments in stakes and to the uplifting of grooms is true. The fact that Bookmakers get a product for free to conduct their business is true and must change.

But please do not bring "transformation" into this as this is not only a mute point but it is laughable and only lends credibility to the idea that yet another leach is waiting to make money for nothing out of racing.

"Transformation" insinuates that there are a hoard of "Black African" owners & breeders that have been excluded from spending their money and from being involved. What a joke......

Another Phumelela moment just with different unscrupulous players at the helm.

Racing SA needs a new business model.

The betting portion should be split out and have no control over racing program. Inside the betting entity they should have 4 entities. Tote , Bookies , sports and overseas ventures. This entity should have to commit x amount back to the stakes pool only. government rebates should sit here

The Logistics portion. Tracks , stables , trucks hostpitality. this entity should be funded by Horse racing activities. They would need to find away to make it profitable. Get off their asses and get sponsors , sub letting etc etc

The media Portion this should be used to fund improvements in the Product they offer. International coverage would be the money spinner but the SA racing is the carrot.

Finally Management of racing Breeders jocks owners trainers grooms NHRA vets farriers. this portion should include the Bookmakers. These stake holders would then work out a funding model for racing. The trust shares should be sold and used to fund this portion initially.

process should result in merger of GC and P and would need to eliminate duplication of activities.

Just a few rough thoughts

Aaah. This must address my newspaper banner.


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Soon there will be no racing in SA and we will all be punting on Ngong.


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I am curious as to which "State-Owned Assets" the Public Protector is referring to? To the best of my recollection - and I may be wrong - assets such as Newmarket Race Course; Randjesfontein; Gosforth Park and Turffontein were owned by the relevant Clubs at the time of these being transferred to Phumelela. Not sure about Arlington though.

the hawk wrote: I am curious as to which "State-Owned Assets" the Public Protector is referring to? To the best of my recollection - and I may be wrong - assets such as Newmarket Race Course; Randjesfontein; Gosforth Park and Turffontein were owned by the relevant Clubs at the time of these being transferred to Phumelela. Not sure about Arlington though.

Valid point, Hawk. My thoughts exactly. But then - what do I know with regard to who owned what from way back when.
All I know is that this is going to be exploited for whatever political ( both 'racing political' and 'actual political' mileage can be extracted from it ).

I have just received a copy of the Public Protectors report and it makes for interesting reading to say the least. Taken from the report, some interesting observations:

3.8 During the investigation, Phumelela Gaming and Leisure (Pty) Ltd had been afforded ample opportunity to participate and assist the Public Protector in probing the matter. However, they made several attempts to frustrate the investigation by raising various excuses not to entertain it, such as lack of jurisdiction to investigate the matter, assets being private to transactions that are commercial in nature, as well as other excuses.

3.11 Since the beginning of the investigation, Phumelela has been hell-bent on frustrating it. They started by stating that I do not have the power to interfere with commercial transactions. They also argued that the assets that were in dispute were not government assets but private and later, they interdicted the public hearings which I called to solicit views from key stakeholders in the industry as well as members of the public on what happened and what would be the ideal solution to the problem. They have been hopping from one excuse to another with a view to frustrate the investigation and delay the release of the report.

......so basically Duppie got his big chop.....for ducking and diving.....

.....the accusation or revelation that ZAR13BAR and change.... ear marked for grooms accommodation was taken into Phum consolidated earnings does not bode too well circa the grooms current grievances
.....also the open victimization of Ian Jayes by the Phumelela hierarchy and cohorts for trying to expose this matter ....the corporate is taking a rodgering at every turn.....I'm with Sly.....there needs to be a new business model before PHUM drags the whole sh!t show down ....:S

That’s the guy Ian Jayes. Many years ago he was very vocal about those provisions for the grooms’ quarters. Then he went quiet...


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