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Call On Industry To Disclose Hard Fiscal Facts

Chance to change the way we do business

Owner Mark Sham is conducting a survey that he has financed as a private endeavour with the sole aim of demonstrating to the National Horseracing Authority that their inaction in routing out defaulters is having a material adverse effect on the future and sustainability of the industry.

He has called on all service providers, participants and stakeholders in the racing and breeding industry to step up and make a difference.

With the assistance of an accounting professional, it is intend to collate all the information received in a financial report, which will be submitted to the NHRA.

The aim of the report is to give the racing regulator a comprehensive and detailed view of the financial position of the various categories of suppliers within the industry, as far as their debtors are concerned and the extent of the bad debt.

“You will appreciate that for the planned report to have the intended credibility and force, we need to disclose your name, against the information supplied, in the report. By providing the information to us you consent to the disclosure of your name in the report,” says Mr Sham, who added that the confidential report was solely for the NHRA’s information and would not be disclosed to the media.

Mr Sham told the Sporting Post on Monday that the initial response to the request for information had been heartening and that he enjoyed the backing and support of some major players.

The questionnaire states that while it is not foreseen that providing the information requested can have any adverse effect on the individual providing it, the organisers do not accept any liability which may flow from the provision of the report to the NHRA.

They have set out questions below, which with the individual input will provide the detailed information and data required:

  1. How long have you been a service provider in the South African horseracing industry?

__________________________________________________________________

  1. What is your current accounts receivable aging – from current to 90 days – as at 31 October 2019?

__________________________________________________________________

  1. How much are you owed in your accounts receivable aging – 120 days to 1 year?

__________________________________________________________________

  1. How much do you estimate you have had to write off as bad debt in the past 5 years?

__________________________________________________________________

Thank you for taking the time to assist us in our efforts to secure the future of South African racing.

Information provided by and terms accepted by: _______________________________(Signed)

 

Date: ___________

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12 comments on “Call On Industry To Disclose Hard Fiscal Facts

  1. Moh says:

    I wish Mr Sham, well in his endeavour. I am not sure he will achieve anything.

    Every segment of the industry has its problems.

    I know no-one that will volunteer their financial information for any purposes. We need to be real. None of the TBA,NHRA and the Operators will provide the information.

    If all the Operators were frank, they would inform the NHRA about every trainer that is in arrears for rental and nominations. There are many. The Operators should be evicting and suing the trainers and notifying the NHRA of the judgement. They are not doing this and the NHRA is aware of this and doing nothing about it. By not proceeding against the trainers, the Operators are fuelling the fire and culture of non payment.

    If the NHRA is not going to do anything about bad paying trainers why should it do something about bad paying owners or for that matter anyone else connected to the industry.

    I remember the days when the vets and transporters contracted with the trainers and it was up to the trainer to pay the accounts and recover from the owners trainers stopped this practice because owners did not pay them or the service provider was not prepared to do anything further until the account was paid up.

    There is no clear answer or solution. In the meanwhile, the answer for service providers is to ask for payment in advance and if the client cannot pay, they must decide whether to accept the risk and provide the service.

  2. hilton witz says:

    It is a well known fact and Mr Goodman and Mr lafferty alluded to it that in many yards the trainer is the biggest owner so please can the sales companies ,the farriers .the food suppliers ,the vets,the transport companies and both operators who accept monies for noms and rentals also supply names of trainers who are bad or non payers…I think we will find that those pointing fingers at slow paying owners should be making sure their cupboard has always been clean…

  3. Joao says:

    Hello

    If Mark Sham was stood next to me right now I would not know. I literally don’t know what he looks like and having met his son Mathew Im pretty sure he means well with this questionnaire.

    The thing is i find this questionnaire quite offensive in so much as its effectively placing the trainer at the head of the triangle and some owners ( and everyone else ) as the cause of the rot.

    I wish i had the words to disagree more with Mark I will however endeavour to do so.

    1: Plenty trainers get paid and don’t pay onwards
    2: Life is tough for everyone
    3: “Deals” done by trainers causes more financial strain than non payers.
    4: Not getting rid of poor horses and continuing to bill every month is not unheard of
    5: If you going to “rock the boat” why only 4 questions and not 40….Like ” Why has a public company nearly brought SA racing to its knees?”

    As stated above I’m pretty sure Mark means well but the problem with SA racing is not non paying owners. The problem with SA racing is the coffers are empty and the owners have been forced to suffer year in year out. We are racing for less stakes than before and stakes have certainly not kept up with inflation.

    Perhaps Mark should ask why trainers allow this to happen? Is it because if they enforced this payment legally 40% of horses in their care would not exist ?

    Please understand that Im not condoning bad debt but this is NOT only the owners fault and this questionnaire is so skew that if trainers reply to it ill be astounded.

    Where is Marks questionnaire to the Veterinary community?
    Where is Marks questionnaire to the breeding community?
    Where is Marks questionnaire to the jockey community?
    Where is Marks questionnaire to the Racing Association?
    Where is Marks questionnaire to Phumelela?
    Where is Marks questionnaire about the the grooms?

    Like I said I don’t know the man and Im sure he means well but the apple is rotten all round what we need is the total resignation of the previous incumbents anyone that profited from the “good days” anyone associated with those famous / infamous colours. The colours so dominated by the colour black that now that the darks days have descended on South African racing black seems appropriate.

    Those are the questions we need answers to.

  4. A supplier says:

    No disrespect intended but any supplier who provides the information must either be associated with Mark Sham or have rocks in their head.

    Who says that the NHA will keep the information confidential? What security does the supplier have that that Mark Sham will keep the information confidential?

    There are lots of questions but no answer that creates 100% certainty that the confidential information will never be used or disclosed by Mark Sham and the NHA.

    We need to be straight down the line and call a spade a spade. As a supplier I do not want to hand out my information which may fall into the hands of a competitor. If I supplied the information, I would like to know what is discussed with Mark Sham and the NHA. The problem is that because of the confidentiality aspect, I will be kept out of the loop. I do not want Mark Sham to negotiate on my behalf or to use my business figures to argue or push an agenda that we know nothing about. I do not want the NHA to think that Mark Sham can speak for me by using my figures.

  5. Ugie says:

    Mark , I understand your predicament but I think before you look at owners, look at trainers, deals, deals, deals.
    Trainers charging so less that it beggars belief. Grooms are not paid on time. I heard from a good source that a trainer does so many deals his grooms are not paid on time, his farrier not paid. I totally agree with Hilton.
    NHRA should start at its door first. Sort out trainers who do deals, stakes deal and you will see how racing would improve. You will weed out bad payers as they will not have a yard to fester in.
    Mark, start with farriers first , u wont have to go any further.

  6. Donald says:

    I was quite surprised to hear Laff & Goodie yesterday confirming that they buy horses at the sales on instructions from owners , prospective and otherwise and when those owners do not pay they then sit with those horses in their stable owned by themselves ?

    That is just poor business practice on their behalf and if times in the industry were better I would apply for consulting employment with them on how to manage owners and the purchase of race horses BEFORE they get to the sales for 5 % of the stakes earned by horses thus purchased !

  7. Lorraine de Klerk says:

    Dear Joao,
    This questionaire has just appeared in the Sporting Post apart from having been sent out to breeders, trainers etc. thereby allowing ANYONE in the industry to participate in the survey.
    There are four questions and in none of them are you asked to NAME NAMES – just putting a few figures together to see how bad debt is affecting everyone – it is a knock on affect – if you aren’t paid, you can’t pay.
    The NHA has power over ALL of us, Mark is trying to put something ‘proper’ together to submit for discussion on how to address the problem going forward.
    He is not just moaning and adding to a negative vibe he is being pro-active and in an industry that is the livelihood of not only himself but his whole family Mark is looking for solutions and the survey will show a united front and an overall picture.
    After this weekend we should all be looking at things from a positive, building point of view.

  8. Brett Maselle says:

    The NHA constitution and rules are tailored toward penalising bad payers. Given this, I would have thought that the NHA would be looking to assist suppliers. It appears not.

    I know of the NHA allowing an individual to continue training despite knowing full well that he had been sequestrated and that the NHA constitution and rules precluded him from training.

    Then, you have NHA senior management who are required understand the provisions of the constitution and rules. They cannot be applied or enforced if they are not understood. This excerpt is taken from the mouth of Mr Arnold Hyde at an inquiry:

    “Yes, I’m, the sequestration, this whole episode, I must say my knowledge of sequestration is
    very limited. I haven’t really come across sequestration very often in my life. I’ve heard about
    people being sequestrated, but I’m actually unsure of what it entails”

    I shake my head.

    The NHA constitution prevents an unrehabilitated insolvent from being a member but it does not prevent a convicted criminal who is incarcerated from being a member. The NHA needs to seriously look at its priorities.

  9. Mark Sham says:

    It’s good that we are able to get differing responses to this.
    Joao, the jockeys and grooms have their own associations. Jockeys are always paid so don’t have to chase their money. However if we could sort out this from owners and trainers it would make grooms lives much easier too.
    All the other service providers have been invited to participate .
    Supplier, my word is my bond and figures will not go past me.
    Ugie, farriers have been included.
    No one is forced to participate but what we are trying to show is the vast knock on effect that slow payers of any kind have all the way down the chain.
    If an owner is slow then trainer /breeder is slow , then they are slow paying feed ,farrier, vet, then feed prices go up to accommodate bad debt or drug companies charge more or farrier can’t pay for shoes etc etc.
    The whole NHA constitution and rules need to be updated.
    If there’s anyone that would like to participate in any form please send me your email address to [email protected]

  10. Joao says:

    Dear Lorraine

    “Information provided by and terms accepted by: _______________________________(Signed)

    Date: ___________

    All responses and enquiries can be directed to email – [email protected]

    I won’t even mention GDPR and confidentiality as mentioned above by “A Supplier”

  11. Lushan says:

    Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed…

    It is worth noting, that good horses tend to have all their bills paid for, from purchase price, stable fees, vet fees, nom fees, transportation costs, fully paid for… Indeed there is no acceptable reason for an owner not paying, but I believe that there are many guilty parties to this serious problem… the powers that be seem to be continuously sweeping issues under the carpet… I think it’s time to remove that very same carpet, and expose all the rubbish that lays hidden.

    Some of the many questions I’ve asked myself, from my observations are below:

    I have noticed, trainers owning shares in many horses in their yards… could it be because owners cannot move that horse to another yard?
    Why are trainers buying horses and trying to rope in owners? Why would a trainer buy a horse without having an owner unless he/she wants it for themselves? Especially because horses are ultra expensive. I for one will not put myself under that type of pressure.
    Are trainers making false promises to owners?
    Telling them they have a met winner or the derby winner, and the prospective owner jumps at the opportunity?
    If you had a “group quality” horse, would you sell shares in it?
    Are trainers doing deals with stud farms, and package deals?
    Are trainers selling horses for a lot more than they paid for them?
    Why are trainers selling or shares in horses?
    Should an owner not buy the horse he likes whilst seeking the advice of his trainer?
    Are trainers doing deals with owners for horses? I’ll train 5 and charge you for 4, or percentage deals?
    Why do horses and owners chop and change stables so often?
    Do trainers keep weak horses in training for the sake of earning income, at the expense of the paying client, whilst knowing fully the horse won’t earn or win a race?
    Are trainers not running credit checks on prospective owners?
    Is it plausible that trainers do deals off the books?
    Could it be possible that a trainer trains for R5000 a month and no vet bills? If you break that R5000 down to grooms wage, stable costs, food, trainers profit margin, does it suffice?
    Can the trainer not request a debit order be run at month end ?
    Should stakes earned not paid to trainers first, or a central body that pays the outstanding money’s owed and then the balance to the owner?
    Is there not a central billing company that handles the accounts and books of trainers?

    There is than what meets the eye… some of us are not oblivious to reality….

  12. PL.NEL says:

    Math vs desperados and delusional hopefuls

    Racehorse average monthly costs as below
    Horse loose feed 8kg/day @R8/kg = R1900
    Bedding approx. = R 500
    Stable rent = R400
    Groom looking after 3 horses = R 1200
    Total = 4000

    Excluded is plenty and mentioning few includes
    Roughage, vitamins, operational costs and general vetting.Days past a groom looked after 2 horses, this would equate to roughly R1800 per horse today,,,most yards cannot afford this.

    Absolutely crazy to mention a figure of R5000 training fees. This figure cannot work properly in any racing establishment.

    Horseracing is a sport for owners and if you are purchasing a horse thinking that you are guaranteed profit, well then I suggest you look elsewhere.

    1 horse keep not paid puts pressure on at least 4 other horses as the trainer has to dig into the stable kitty.

    In theory Mark’s aim at highlighting debt in the industry and trying to cull the culprits would be brilliant, a similar exercise as in stock farming in drought- you weed the weak which allows the healthy a better chance at survival.

    However his endeavor will fail due to our industries lack of unity and focus.

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