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Phumelela Hits Back At Public Protector

'She abused office - soliciting R10 million payment'

It has been widely reported that the Public Protector released a report into allegations of maladministration and improper conduct in connection with the corporatisation of the South African thoroughbred horseracing industry.

The report sets out the findings of the Public Protector in respect of 4 issues relating to the corporatisation process.

In summary, these issues were:

whether the Gauteng MEC for Economic Development had the authority to enter into corporatisation negotiations;

whether public participation and parliamentary processes were followed in connection with the corporatisation process;

whether a grant by the Horseracing Development Fund to the Newmarket Turf Club was utilised for the purposes which a complainant alleged it was intended; and

whether the land on which the Arlington and Bloemfontein racecourses are located, were owned by municipalities or the government at the time of the transfer to Phumelela.

The Public Protector concluded that only the complaint regarding the grant by the Horseracing Development Fund to the Newmarket Turf Club was substantiated. Phumelela, however, disputes this finding.

Despite the fact that the Public Protector concluded that three of the four issues investigated by her were unsubstantiated, she directed President Cyril Ramaphosa, the Premiers of all Provinces, the Minister of Sport, the Minister of Trade and Industry and the Gauteng Gambling Board to take wide-ranging remedial action, the majority of which is entirely unrelated to either her findings or to the only substantiated complaint.

Public Protector, Adv Busisiwe Mkhwebane (Photo: Flickr)

Public Protector, Adv Busisiwe Mkhwebane (Photo: Flickr)

The Public Protector also made numerous observations and findings regarding the transformation and control of the racing industry which are unrelated to the issues investigated by her. These observations and findings have caused Phumelela to suffer reputational harm.

It is pertinent to note that the Public Protector refused, prior to issuing her final report, to give Phumelela access to the evidence upon which her findings were based or to afford Phumelela the opportunity to question witnesses who gave evidence. Phumelela has been advised that this constitutes a breach of the provisions of the Public Protector Act.

The Public Protector’s final report also contained a wide range of material evidence, of which Phumelela was never informed nor called upon to answer.

Whilst purportedly acting as mediator, the Public Protector proposed, in writing, that Phumelela should make payment of R10 million to one of the complainants for “pain, suffering and public humiliation” and for “relinquishing her plans and interests” in respect of the Arlington Racecourse (which is owned by Phumelela).

Phumelela rejected this proposal because no legal justification exists for such a payment. The Public Protector stated that the rejection of a payment that, to her knowledge, had no basis in law, was “regrettable”. It is also noteworthy that none of this complainant’s complaints were substantiated.

The Public Protector convened public hearings to hear further evidence which she would reasonably have been aware would be adverse to Phumelela.

Although she invited the media to these public hearings, she did not invite Phumelela or give it any notice of the hearings. Phumelela was compelled to approach the High Court for an urgent order postponing the hearings, in order to afford it an opportunity to test the evidence and to make submissions in respect thereof.

The Public Protector has constantly misconstrued the High Court’s order as an interdict when it merely postponed the hearings.


Phumelela has cooperated with the Public Protector’s investigation since it commenced in 2013. It submitted large volumes of documents and information to her office. The Public Protector appears to have disregarded most of this relevant information in coming to her conclusions. In addition, she has accused Phumelela of constantly frustrating her investigation. Phumelela denies this.

In light of the above, Phumelela’s legal advisors have recommended that the company should apply to the High Court to have the Public Protector’s report reviewed and set aside on, inter alia, the bases that the she has:

acted in a manner which is unconstitutional, contrary to the principle of legality and outside of her powers;

acted in a procedurally unfair, biased and capricious manner;

took irrelevant considerations into account and ignored relevant considerations;

has taken action which was materially influenced by errors of law, is unreasonable and not rationally connected to the information that was before her; and

has abused her office by attempting to solicit a R10 million payment to a complainant in circumstances where she should have been aware that the complainant was not entitled to such a payment.

Phumelela firmly maintains that the findings in the report are legally and factually untenable and that its constitutional right to fair process has been violated. In the circumstances, it will seek a punitive costs order against the Public Protector.

Phumelela intends to lodge a review application as soon as possible, but in any event before the middle of June.

  • Press release issued by Phumelela Gaming & Leisure on 30 May 2019

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14 comments on “Phumelela Hits Back At Public Protector

  1. Philip Goldberg says:


  2. Brian says:

    Barry, whatever is true will not be.

    At the beginning I warned of the incompetency and the roosters have come home to roost.

    I’m not saying anything is right or wrong, but, this PP couldn’t see her hand in front of her face.

    Whatever was wrong will never seem the light of day

  3. B steele says:

    Unfortunate that the P P record not so good ,,by the time it gets to court she might be toast

  4. Pops says:

    Have no idea why Phumelela would think public hearings would be adverse to Phumelela..

  5. Bob Kistnasamy says:

    Unfortunately, we have a PP who has erred recently and all entities are climbing on the bandwagon.
    From a reporting perspective, it would appear that the Audi Alterem Partem principle is not being applied. It would be interesting to observe whether the PP is operating within the ambit of her jurisdiction.
    In two recent matters, it was evident that she has not.
    Interesting times are in the offing.

  6. Ian Jayes says:

    Over a period of 17 years Phumelela had sight of every letter and document relating to the HRDF Grant. They took the money in 2002 and put it in their accumulated profits for the benefit of their shareholders. When questioned on this, some of their directors went so far as to deny there even was a Grant. Let us not forget that Rev Alan Boesak went to jail for using a Grant for the wrong purposes. You make your bed you lie in it.

  7. Rod Mattheyse says:

    Making America great again

  8. Head Scratcher says:

    It seems that some who comment on SP are afflicted by the dreaded TDS. Just why they feel the need to allow the rest of us into their predicament is known only to them. Small minds I suppose much like the source of their affliction.

  9. Lou Syfer says:

    When I read this response from Phumelela it reminds me of the Bells-Pottinger style campaign utilised so effectively to smokescreen the damage done by the Guptas. I agree that the PP has got some things wrong. What she has not got wrong is the theft of the R13,9M as alluded to by Mr Jayes. This in itself deserves a severe sanction.

  10. Donald says:

    I do not hold a torch for Phumelela but this P.P. is just a Political Protector ! 10 million rand extortion payment recommended in her report , that in itself should get her fired !

  11. Winston says:

    It is sad to see that PGL has resorted to such tactics again. It does not stop using it’s money and well oiled propaganda machine. Thank goodness that the gambling and racing community know how they work. If PGL had a good case to review the PP, it would not resort to such tactics. Since it has chosen to directly and personally attack the PP and not try and win its case on the real issues, it’s an indication to me that it has a very very difficult case and may not win.

    If it was offered to PGL to settle for R10 million, PGL should have grabbed the settlement. This was before the PP had made her decision. It could have gone away and the three complainers would have most probably have gladly walked away from their complaint. This is now going to cost PGL a lot more than R10 million. Here is what I know it will cost. There will be massive legal fees running into millions of Rand. The share price of PGL has lost millions of Rand. The PP would not have suggested that PGL lose its 50% of bookmaker levies. By not doing so, the PGL case reviewing the Goverment decision would have been stronger. My guess is that the loss will be half a billion Rand over 6 years. It will have to pay back the R13 million taken by it when it should have gone to grooms. Seriously, who is making decisions for PGL because the worst decision was taken not to settle.

    Here is a blast from the Past media comment in 2002 from PGL –

    Media Comment- Monday, 21 October 2002
    Phumelela completes restructuring

    Phumelela has completed its restructuring plan, which was initiated in 1997. It has successfully completed negotiations with the Gauteng government to place it into a strong position to compete with other forms of gambling. Annual betting in the horse-racing industry has risen to R5bn. As part of their restructure, Phumelela has also taken over horse-racing assets in the Eastern Cape, Free State, and Northern Cape, it originally only operated in Gauteng. 

    My comment: All we have been hearing from PGL over the past decade and more is that it cannot compete with other forms of gambling. You have to ask why its media statement said that PGL was placed in STRONG POSITION to compete with other forms of gambling and today it says it cannot compete. Could the answer be bad management or bad legal advice or both.

  12. The Dark Duke says:

    This does not make for good reading if you are a racing fan or Phumelela investor. Where is the accountability for terrible management decisions?

  13. Jay Akkiah says:

    This is whats greed allabout

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