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Former Cricket South Africa CEO Thabang Moroe. (Photo: Sydney Seshibedi / Gallo Images)
Cricket South Africa’s interim board released the full Fundudzi Forensic Report into the public domain on Wednesday after receiving legal advice, describing an organization that was hampered by inept leadership.
It didn’t take the unwritten release of the 456-page Fundudzi report to confirm what years of action have shown, that Cricket South Africa’s (CSA) leadership was overwhelmingly selfish and incompetent, but it has added details to the rot.
It’s no wonder that the CSA Council of Members and the previous board did not want the report to come out. It makes collective leadership look bad and certain people, particularly former CEO Thabang Moroe, look terrible.
But others have also been exposed as unfit for the job. Former Chief Operating Officer (COO) Naasei Appiah is instrumental in many poor decisions, and current company secretary Welsh Gwaza will undoubtedly come under more scrutiny for his role at various events. Minutes of Exco meetings were not always kept, and executives misled the board on several occasions.
Ultimately, however, the report is a catalog of issues that underscore how poorly the CSA was run, in terms of basic corporate governance, for far too long. There was a catastrophic failure of controls at the board level, which is the central narrative. Whatever Moroe, Appiah, and others did, it wouldn’t have happened if the board had been more vigilant.
CSA Full Forensic Report November 25, 2020
The board itself was appointed by the Council of Members, which, as the highest decision-making body, also bears much of the blame.
A statement from the interim board said: “The board is aware of the fact that some individuals and organizations have concerns that they have been mentioned or implicated in the report, that some individuals have not been heard, and that the report does not necessarily paint a picture. complete.
“However, the board has concluded that it is overwhelmingly in the public interest and CSA to release the report at this time.
“All interested parties will have a fair opportunity to voice their views. Furthermore, no action will be taken against any person involved without a full investigation, fair procedures and, in particular, that everyone has the opportunity to be heard. ”
Examples of rot
Moroe employed a company called Tinanati, which had been named only as “service provider X” in a summary of the report last month. This company was employed for “the development and execution of the public sector stakeholder strategy.” Basically, he promised to secure the revenue and goodwill of CSA from the national government.
Tinanati was paid R3.49 million despite being named without CSA after the acquisition processes. In return, it was found that Tinanati failed to provide CSA with any of the promised “net financial benefits” of R30 million as set out in the contract. The contract was supposed to be reviewed every six months, but this never happened. Despite charging a fee of R220,000 every month for 13 months, Tinanati did not provide a single cent of revenue for CSA.
Another part of the report highlights in great detail how Moroe and CSA tried to ignore the legitimate claims and inquiries of the South African Cricketers Association (Saca). Many of these details emerged in court documents when Saca initiated legal proceedings after months of evasion in 2019. Daily maverick reported on it at the time.
The catch status in South African cricket
The license fee fees related to the 2018 Mzansi Super League (MSL) were withheld for no reason. Saca’s requests for financial details related to the projected shortfall of R654 million in the next broadcast rights cycle and clarification on the restructuring of the national game were ignored.
Among the many issues highlighted in the report is the agreement to sell MSL’s broadcast rights with a company called Global Sports Commerce (GSC) Pte Ltd for a period of five years starting with the 2019 edition of the tournament.
Despite advice from IMG sports sponsorship brokers that CSA should get an advance from GSC before proceeding with the deal, Moroe ignored the advice and also misled the board.
IMG’s Paul Manning, a leading expert on broadcast rights deals, wrote an email to CSA accepting that the potential revenue was attractive, but that there were concerns.
“Manning further indicated that IMG had doubts about how GSC would recover the rates,” the report says. “The Manning email further stated that ‘experience says that when something seems too good to be true, it is often too good to be true.’
“In his email, Manning indicated that CSA needed to implement safeguards to protect its interest before accepting the offer. Manning warned that if CSA waited until ‘long-term negotiations’, they would have lost influence and [would] He is fighting for a good contract that contains the protection that the CSA needed. ”
Manning outlined many other safeguards and recommended that CSA follow them, including doing due diligence on GSC.
“There is no evidence that CSA has performed due diligence on GSC as recommended by IMG,” says Fundudzi. “In fact, Appiah gave the impression that IMG conducted due diligence.
“We noted from a review of the minutes that Gwaza assured the Board that three attorneys had been working on the settlement and that all identified risks had been covered. Gwaza further noted that the administration had largely gone to cover issues of reputational risk and the guarantee of the 500 million rand.
“It should be noted that at the time the Board considered GSC’s proposal, Appiah, Moroe and Gwaza were aware that due diligence had not been conducted at GSC.
“Appiah and Moroe did not ensure that due diligence was conducted at GSC and did not provide such due diligence to FinCom and the board despite numerous requests to do so. Appiah and Moroe also did not inform FinCom or the board that due diligence was not conducted at GSC.
“On July 21, 2019, Gwaza advised management not to share IMG’s opinion with FinCom and the board until management had a position on the matter.
“We were provided no evidence that management deliberated further on the risks identified by IMG in connection with the GSC proposal. Appiah and Moroe continued to mislead FinCom and the board that due diligence was performed at GSC, while they were aware that such due diligence had not been performed. “
The eventual consequences of the failed deal could end up costing CSA R27.5 million in settlement fees from GSC.
And so it goes. The Fundudzi report may not be a complete picture of CSA’s failures, but it is certainly a gut-wrenching look under the sheets at a sordid mess. DM
To read the full report, click here.
