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The Questions Never End!

Wednesday is D-Day!

Racing finds itself in turbulent times. When will the days of apathy and non involvement by stakeholders end?

On Wednesday 15 January 2020, the National Horseracing Authority will hold its AGM at the NHRA HO at Turffontein.

The National Board has resolved to call, and notice was also recently given, of a Special General Meeting to be held on the same day immediately following the Annual General Meeting.

This will be to consider and vote on the proposed amendments to the Constitution as set out in the document titled: “Proposed Amendments to the Constitution of The National Horseracing Authority – January 2020” which can be viewed here.

Regular SP poster Steve Reid writes that there are a few days to go before the NHRA AGM and thankfully for them, once again, the apathy from members is astounding.

National Horseracing AuthorityHe says that this apathy has resulted in racing finding itself in the position that it is in today.

I couldn’t forgive myself for not highlighting some obvious funnies within the financials, and perhaps someone will have the balls to stand up at the AGM and ask.

I will be listing items on a daily basis leading up to the AGM, to do them all on one post would be impossible

QUESTION NO.1

There is a R4 100 00 provision for restructuring costs in the figures. Four Million One Hundred Thousand Rand. Unbelievably there is no explanation as to what this restructuring entails and why in these troubled financial times these are needed.

My second but linked question is was Lyndon Barends given a package and are the costs of that package included in this provision?

Tomorrow we will discuss legal costs that more than doubled in the last financial year.

The more things change the more they stay the same..

Please join in the conversation and have your say – pose your questions on our comments platform.

Have Your Say

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28 comments on “The Questions Never End!

  1. Brett Maselle says:

    Here is a question that demands to be asked and answered at the AGM…. Given the terms of the NHA constitution and its rules, is Phumelela a member of the NHA?

    I have read affidavits of Vee Moodley of the NHA (ex Phumelela) and Patrick Davis of Phumelela where they have stated under oath that Phumelela is a member of the NHA.

    The above has been raised as one of several grounds of opposition by the NHA and Phumelela in an application in the High court where Nadomine (Pty) Ltd seeks that the court grant an order declaring that the licence granted by the NHA to Phumelela to hold horse races at Turffontein race course has been cancelled in terms of rule 44.3 of the rules of the NHA. Second Respondent.

    For your edification rule 44.3 of the NHA rules read as follows: “A licence to RACE under the RULES shall be automatically cancelled if a RACING OPERATOR ceases to conduct itself in a manner which conforms with legislation in force for the time being in the Province in which the RACE COURSE on which the RACING OPERATOR intends to hold RACE MEETINGS is situated.”

    As I understand the argument by Phumelela and the NHA on “membership”, Phumelela, although it is an Operator, should also be afforded the rights of a member.

    Throughout my racing career I have believed that Phumelela has never been a member or afforded rights of a member of the NHA. Woe betide me and the rest of horseracing if the NHA and Phumelela are correct. I quote below what an excerpt from a replying affidavit of Mr M. Dawood of Nadomine (Pty) Ltd to certain allegations made by Mr Moodley on behalf of the NHA. It makes for interesting reading.

    “A. THE FALSE ALLEGATION THAT PHUMELELA IS A MEMBER OF THE NHRA

    15. Moodley states that Phumelela is a member of the NHRA (AA / inter alia, paragraphs 5, 6, 7.7, 8, 10.3 and 12.1).

    16. Davis also states unequivocally that Phumelela is a member of the NHRA (Davis AA / inter alia paragraphs 15, 18.3, 18.7, 19.3.1, 47.2 and 57.1.1).

    17. Both Moodley and Davis have relied on facts and allegations that are false and have never been true. Phumelela has never been a member of the NHA and is not a member of the NHRA. Phumelela is an operator and nothing more.

    18. Clause 9.9 of the NHRA Constitution evidences the dishonesty of the Respondents by stating in unambiguous terms that: – “Notwithstanding the provisions of this Constitution, only a natural person may be a MEMBER”. Furthermore, the following clauses of the NHRA Constitution and the NHRA rules confirms that Phumelela has never been and can never be a member of the NHRA as alleged by Moodley and Davis: –

    18.1. The NHRA Constitution: –

    18.1.1. Members: – clauses – 5.7, 5.11, 6 to 11 and 29.1.14.

    18.1.2. Racing Operators – clauses 5.28, 15.5.3, 16.26 and 29.1.28.

    18.2. The NHRA Rules: –

    18.2.1. Racing Operators – rules – 1.1.62, 2.1.3, 7.6.3, 44, 49.1, 100.

    18.2.2. Member – there is no definition for a member in the rules but the Constitution takes precedence. A racing operator is certainly not a member. See also rules 1.1.48 and 1.1.51.

    19. I have trawled document after document to find any reference in any public document that Phumelela is a member of the NHRA. Unsurprisingly, there is none.

    20. In fact, Phumelela has itself confirmed in its Annual Report that it does not hold membership in the NHRA. I attach hereto marked “M1” a copy of a page of Phumelela’s Sustainability Report of 2012. In that financial year, Phumelela had the right to appoint one of the directors that made up the Board of the NHRA. This right was subsequently revoked by a Special General Meeting of members of the NHRA. As is evident from the aforementioned Report, Phumelela shows that it is a member of SARGT and SOJO Business and Tourism but it is also clear therefrom that Phumelela does not regard itself as a member of the NHRA.

    21. The statement and/or innuendo by the NHRA and Phumelela (through their representatives) that Phumelela is a member of the NHRA (which is false) is essential to their main defence that an inquiry has to first take place before Phumelela could lose its licence in terms of Rule 44.3. This defence is without merit, manufactured and dishonest. I deal with this below under two separate headings. ”

    I have sent a copy of the replying affidavit to the Sporting Post to confirm the accuracy of my quote.

    I believe that the response to the question i have demanded be asked and answered (although I have no right in law to make such demand as I did not renew my colours) should be an emphatic NO.

    Reading the allegations of Mr Moodley and Mr Davis, I am now convinced that horseracing and its integrity has sunk to its absolute lowest levels ever. Through experience, I know nothing will happen to these two men and they will continue to prosper while horseracing suffers.

  2. Brendon says:

    Clause 13 of the Constitution of the National Horseracing Authority of Southern Africa states:

    “The NATIONAL BOARD may call a SPECIAL GENERAL MEETING of MEMBERS at any time and place, and it shall call such a meeting upon receipt of a written requisition signed by not less than 100 MEMBERS. The notice convening the meeting shall specify the objects and business of the meeting.”

    Question 1
    Who are these (not less than 100) MEMBERS that signed a written requisition calling for a SPECIAL GENERAL MEETING to address, inter alia, the following proposed amendments to the Constitution:

    1) To increase the maximum NATIONAL BOARD DIRECTORS from NINE to TWELVE;

    2) To increase the age ceiling for a NATIONAL BOARD DIRECTOR from 70 YEARS to 75 YEARS; and

    3) To increase the compulsory retirement age of a NATIONAL BOARD DIRECTOR from 70 YEARS to 75 YEARS.

    Question 2
    Are the NATIONAL BOARD DIRECTORS able to explain why or how they were compromised over the past year/s by having a maximum of NINE NATIONAL BOARD DIRECTORS and had this been TWELVE, their performance and contribution would have been far superior?

    Question 3
    Whose interests are the NATIONAL BOARD DIRECTORS serving by increasing and lifting the age ceiling from 70 YEARS to 75 YEARS?

    In my opinion, the proposed amendments above is to further the narrow interests of a few individuals who are desirous on holding office in their twilight years. Who is this whipper snapper 69 year old or 70 year old that is doing such a fine job as a National Board Director that the Board feels the Constitution need to be amended to keep this person on for another 5/6 years. What has this person/(s) contributed that is ground-breaking to warrant such a change to the Constitution.

    Over the past 15 years, the sport and the industry were used be a few individuals to further their personal interests above those of the sport and the industry. This was facilitated by assimilating (hand-picked) leadership teams that were aligned to narrow interests of their sponsors. Consequently, playing musical chairs as a director of either Phumelela, NHRA, RA or either of their affiliates was par for the course.

    The NHRA should be striving for a smaller, more nimble Board composition of SEVEN members with 60/65 year age ceiling. The NHRA should not be seen or used as a retirement village.

    Also, Phumelela, the RA and their affiliates should also be striving for a smaller board composition with a greater emphasis on attracting independent and competent board members. The overly collaborative approach and blurred lines between NHRA, Phumelela, RA and their affiliates have not served the sport well.

    1. karel says:

      You write: “The NHRA should be striving for a smaller, more nimble Board composition of SEVEN members with 60/65 year age ceiling. The NHRA should not be seen or used as a retirement village.”
      Can you explain how you get to the 60/65 ceiling and how that impacts on ability to do a job?
      Your retirement village comment is ‘invective’ (a word that apparently belongs to my comments as well, so I learnt last week)

  3. Jess K says:

    Brett, to help answer the question on whether Phumelela is a member of the NHA or not, Rian du Plessis, who was Phumelela CEO at the time, stated publicly that the NHA has no jurisdiction over them. In fact, if I remember correctly the Sporting Post ran an article about 2 years ago where he (Rian) reiterated this statement.

  4. DavidS says:

    I can clearly remember that

  5. Steve Reid says:

    Question No.2

    Why have legal costs doubled in 2019 when compared to 2018? The financials tell a very clear story. Legal, litigation and disciplinary bottom line costs increased from R836 119 in 2018, to an eye-watering R1 929 050 in 2019. This equates to an increase of 130.7%. The question has to be why is the NHA litigating to the extent that they are? Perusing the limited information the story worsens if this can be believed. Fines levied are offset against costs. The legal fees for 2019 sans the fines reduction actually equate to R2 945 000. Thats a staggering R245 000 a month on legal fees. Why does the NHA find itself in what appears to be serial litigation? The answer once again is unbelievable. Costs are split between “Disciplinary and appeal board costs” and “Operational matters”. There is no break down of what either category entails. Disciplinary and appeal board costs, have rocketed from R 383 249 in 2018 to R1 590 995 in 2019. That’s an unbelievable 315% in the period that the new Chief Executive has taken over. Operational matters, whatever these may be,have remained constant

    The obvious question that needs to be asked is why the 315% increase? Does the regulator litigate before attempting to negotiate? What process is followed before litigation is implemented? Do the Board approve of all litigation action and why are the board not held accountable for expenses of failed litigation, particularly those that have been lost externally? The James Goodman case in particular illustrates my viewpoint. On a personal note I can state that absolutely no attempt was made to discuss or mediate with me before I was charged. Make up your own conclusion, my opinion is that the old boys are bullies in their kangaroo court. A final question – have all fines levied been paid? I am very reliably informed that this is not the case.

    Tomorrow we step it up a gear and discuss the Asian Racing Conference of which the NHA has committed itself to this year.

  6. Fred says:

    This comment relates to remuneration paid to the NHRA BOARD OF DIRECTORS. In the days gone by, NHRA DIRECTORS gladly undertook their services for the NHRA on a gratis basis. These NHRA DIRECTORS always acted in the best interests of horse racing. They knew horse racing and its rules like the back of their hands. That is no longer the case today. When I saw the Annual Financial Statements for 2019, I could not believe what I was seeing. There was reference to remuneration being paid to DIRECTORS. After a few calls I found out that in 2016, the NHRA DIRECTORATE working hand in hand with the Operators were able to get MEMBERS of the NHRA to agree to and pass numerous changes to its Constitution. I was told that one of the changes was to remunerate non executive DIRECTORS.

    The NHRA Constitution deals with tthe DIRECTORS remuneration in two areas.

    Area 1 ….Clause 5.2.26 – The NHRA has the power to determine the remuneration, if any, to be paid to NATIONAL BOARD DIRECTORS;

    Area 2 …Clause 15.11.7 -The NATIONAL BOARD DIRECTORS, except those DIRECTORS provided for in clause 15.2, will be remunerated by the NHA on the basis of a fixed fee per BOARD meeting attended, to a maximum of six meetings per year. No additional remuneration will be payable in respect of services rendered by any NATIONAL BOARD DIRECTOR in relation to any sub-committees of the BOARD, notwithstanding that DIRECTORS may be required to serve on such sub-committees.

    The 2019 Annual Financial Statements claim that the NHRA # paid any directors’ emoluments during the year to the non-executive members of the board R331 782 (2018: R539 574) including travel and accommodation and fees#.

    The NHRA Constitution does not allow for the non executive NATIONAL BOARD DIRECTORS to benefit from travelling and accommodation emoluments or fees.

    My questions are

    A Are the NHRA NATIONAL BOARD DIRECTORS not embarrassed that they do not know there rights and entitlements and have earned more than they can?

    B. What fixed fee was determined by the NHRA for each non executive DIRECTOR for each BOARD meeting and when was it fixed and where is the written minutes and resolution proving this?

    C. Since the non executive DIRECTORS are not entitled to receive travelling and accommodation emoluments or fees, when will these NHRA DIRECTORS and other past directors repay these undue benefits to the NHRA?

    D. Please can we have a breakdown of the amounts paid to each NATIONAL BOARD DIRECTORS or from which they benefited?

  7. Brendon says:

    @Karel,

    The global trend has been to reduce the compulsory retirement age for employees from 65 to 60 years (which is normally aligned to the employee’s retirement/pension fund rules). In some cases, employers have reduced the compulsory retirement age from 60 to 55 years.

    Over the past two decades, I have not encountered any industry in SA or globally that has increased its retirement age upwards from 65 to 70 years. So, if we are talking about increasing the compulsory retirement age to 75 years, then one must ask what catastrophic event, in South Africa, resulted in the wipe-out of the population that was in mid-career or late-career to justify this proposed amendment to the constitution of the NHRA?

    In the run-up to the 2019 General Elections, the ANC support base was vocal in reminding their leadership that they do not want to see the same “tired old names” on the slate. The support base demanded that if you are going to give us old people then give us some “new” old people.

    I remain unconvinced that the National Board Directors are selflessly proposing amendments to introduce some much needed “new” old people to Racing and to complement Phumelela’s Racing it’s a Rush.

    Where is this invective drama / sensitivity coming from? By virtue of holding a non-executive directorship at the age of 65/70/75 does not take one out of retirement.

    1. karel says:

      I suppose the political scene in the USA would look quite differently if your view would be imposed 🙂
      I find your view laughable.
      (Oops, there goes the invective again…)

  8. WILLIAM MILKOVITCH says:

    Any idea about an update with regards Vee Moodley’s invective project, in relieving the constipation of the MR range, between 60 & whatever…

    How’z that doing ? Owners of horses in that range, is it working for You and/or your horse ?

  9. Pops says:

    Sporting Post Word of the Month January 2020—-invective.

  10. Paul says:

    Risible Karel, it is risible ….

    1. karel says:

      Ah, I learn every day.
      risible
      /ˈrɪzɪb(ə)l,ˈrʌɪzɪb(ə)l/
      Learn to pronounce
      adjective: risible
      provoking laughter through being ludicrous
      “a risible scene of lovemaking in a tent”

  11. Steve Reid says:

    Question no.3

    The Asian Racing Conference has been a hot talking topic in racing, ever since the surprise announcement that Lyndon Barends and Ken Truter had landed it for South Africa in 2020. So contentious is the funding of this conference, seen by many as a suicidal ego trip by those that secured it, we have had allegedly had an NHA board member resign due to it. Let’s give a bit of background:

    1. At the NHA AGM in January 2019, the cost of hosting the 2020 Asian Racing Conference by the NHA was pertinently raised by members. The minutes of the meeting are available on the NHA website. The following edited version shows what was discussed at the AGM on this issue:-

    “The Chairman gave the Members the background to the NHA hosting the ARC in 2020. He said that the NHA had been advised that they had the opportunity of hosting the ARC in 2020, since we had not hosted it since 1995. Clearly to hold a Conference of this nature is an honour. The bidding contest was fierce and we were up against various other prominent racing jurisdictions.

    The Chairman then advised that the NHA had entered into discussions with all the role players, as this was an industry initiative to showcase South African horseracing in its entirety.

    The final presentation was made in Dubai and a decision was taken to give it to the National Horseracing Authority of Southern Africa. The ARC announced the bid had been awarded to South Africa at the ARC meeting in May 2018, in Korea and as Chairman of the NHA, he had accepted the baton on the NHA’s behalf. With the imminent relaxation of the import/export protocols, this Conference would be a serious game changer for the South African Breeding Industry. He confirmed that a Local Organising Committee was in place that has representatives from all the stakeholders.

    Currently the ARC are satisfied with the arrangements that have been made so far and we are expecting a visit from the Committee Members in the latter part of February.

    The Chairman advised that we were hoping to bring about 800 delegates to South Africa from racing jurisdictions all over the world. He was optimistic that we will receive support from everyone, as this was an honest endeavour to promote South African Racing. Mr Napier gave input on the previous Conference that was held in South Africa and the “weaknesses thereof”.

    The Chairman noted his comments and confirmed that we shall endeavour to ensure that this Conference is done to the best of our abilities in a professional manner. The Chairman also thanked Mr Napier for being the catalyst many years ago, that has enabled us to be given this opportunity once again.

    Mr Costa queried if we had received any offers of support from the Department of Tourism. The Chairman confirmed that the NHA had received an undertaking from South African Tourism for R452 000 and we are currently in consultation with them. He further added that we are currently in consultation with the Western Cape Tourism, Trade & Investment Promotion Agency for Cape Town (WESGRO) and the Western Cape Government. Mr Costa queried what a rough estimate of the cost to the NHA would be.

    The Chairman said that he hoped that there would be no cost to the NHA as the other role players in the industry have committed certain funds and all delegates who attend the Conference would pay their own way, namely their accommodation, airfares, as well as a registration fee paid in U S Dollars.”

    2. The baton for ARC 2020 was handed to the NHA on 18 May 2018 at the close of ARC 2018. The NHA spent a large amount on accommodation, food and traveling in canvassing the Asian Racing Federation to award ARC 2020 to it. This is reflected in the 2018 Financials in the amount of R804,456.00. We know that the then NHA CEO Lyndon Barends, and its Chairman Ken Truter were involved in spending part of this amount. It is rumoured that first class plane tickets and four star hotels were the order of the day. This expenditure is extravagant when you consider what the NHA Chairman stated at the January 2019 AGM“ The Chairman stated that not all travel incurred by the NHA is subject to an expense, as when you sit on the ARC Executive, all your travel expense costs are fully paid for by the ARC and this was an important point to make to the Members.” Hidden in the notes to the 2019 AFS, at note 24, which has no corresponding expense in the AFS, the NHA records: “Asian Racing Conference 2020 (‘ARC2020’). Although a provision has been made for certain ARC2020 cost contributions (refer note 9 above), the management, ownership and funding of the 2020 Asian Racing Conference has been allocated to a third party as opposed to the Authority. All rights and obligations arising from this event are to be the responsibility of said third party.” Note 9 in the 2019 AFS has allocated a specific and exact amount of R800,000.00 (a similar to the previous year) towards expenses that are payable and to be incurred for ARC 2020.

    3. After reading who the NHA says is funding ARC 2020, the obvious questions that arise are: Who is this “third party”? Why is the NHA intentionally hiding the name of this funder from us? What are the terms of the funding agreement? This is very important because it is not in dispute that the NHA does not have the funds and cannot afford to pay for ARC 2020 out of its own coffers. I am told that at snacks after the January 2019 AGM, Vee Moodley was estimating that ARC 2020 would cost in the region of R20 million. We were all led to believe that ARC 2020 would be paid by the Operators. In other words, the NHA had ensured that Phumelela, Gold Circle and Kenilworth Racing would be liable for all the costs and expenses of ARC 2020. As confirmation of this, the 2018 Gold Circle Annual Report talks of its commitment to fund certain aspects of the conference. “ South Africa has been chosen as the next international venue to host the Asian Racing Conference which was last held in the country more than twenty years ago. This conference draws delegates from around the world and gives the Industry an opportunity to showcase the individual racing regions to attract investment. Gold Circle is a member of the organizing committee and has committed a financial contribution towards the set-up costs of the conference. The Conference will be held in Cape Town in February 2020.”

    4. Since the notes of the NHA AFS talks about “a third party” funding ARC 2020 we can safely assume that all of the operators are not funding it and that only Gold Circle are in a position to honour their commitment. Phumelela and Kenilworth Racing have never publicly acknowledged any undertaking to fund ARC 2020 for the NHA.

    Taking all that has been highlighted regarding the funding of the ARC, I would very much suggest that the following questions are asked of the NHA at the AGM:

    1. Did Lyndon Barends and Ken Truter have the NHA board approval to bid for ARC 2020 and was funding secured BEFORE the bid was made.

    2. Did Advocate Stais SC resign from the NHA board in protest to the costs around hosting the ARC and why did the NHA fail to immediately notify its members and horse racing of his resignation?

    3. Will Mr Ken Truter repay to the NHA all amounts spent by it on his behalf for ARC 2020 as he is not entitled to these benefits?

    4. Who is the third party that is funding ARC 2020, and why is there a veil of secrecy around this funding?

    5. Exactly when (i.e. date) did the NHA secure the funding from the third party? What are the terms of the funding relationship/agreement between the NHA and the third party?

    6. Will the NHA confirm that non-executive directors cannot receive any free flights, accommodation and food for ARC 2020?

    Tomorrow we highlight traveling expenses incurred at the NHA, as well as a little surprise.

  12. Rian says:

    Well done Steve, excellent investigative journalism !!!!

  13. Jimmy says:

    Dear Mr Reid,

    Thank you for your informed comments. Keep them coming.
    I have done a little digging regarding the 2020 Asian Racing Conference《ARC》.

    The Asian Racing Federation 《ARF》 holds every ARC. Our NHRA is a member of ARC. ARF is about Horseracing Authorities which are regulatory bodies in a particular geographical region of the globe.

    The majority of ARF members, excluding our NHRA, are self sufficient. None would have no difficulty in hosting an ARC. Our NHRA should not hold an ARC because it does not have the financial resources to do so. It would have been reckless of the NHRA national board to bid for and agree to hold the 2020 ARC without first securing all the funding for hosting the conference. It may be that this never happened and that is why the NHRA has become an opaque authority when this question crops up.

    Why our NHRA undertook this responsibility made no sense to me.

    Eventually, it hit me like a ton of bricks.

    The 2020 ARC does not benefit operators, owners, trainers, grooms, punters, veterinarians, farriers, carriers and feed merchants etc etc.

    ARC 2020 only benefits our NHA and our breeders.

    My answer was found in the objectives of ARF, one of which is to promote horseracing and breeding and the integrity and prestige thereof.

    If you look at the details of NHA national board, you will see the names of breeders. Robin Bruss, Susan Rowett and Ken Truter.

    I hope that the third party that is funding ARC 2020 is Bloodstock South Africa or any other breeder or breeder organisation. The only other institution that would have a benefit and could muster up the funds is the SA government. Anyone else that funds ARC 2020 for our NHRA would have no interest in doing so.

    I hope members will insist on answers and transparency. Remember that the NHRA is required to be independent and cannot be shown to be biased. When it comes to ARC 2020 this is a double edged sword. Its funding needs to be scrutinised.

  14. Steve Reid says:

    Hi Jimmy I have purposely not responded to replies up to now as this thread is difficult enough to follow without the sideshows. You do however touch on a valid point regarding self-interests and you have to wonder who the 3rd party is that is allegedly facilitating the finances. My thoughts are that it cannot be a sales body or the TBA, it is more likely that the funding ( if it has indeed been secured ) will be coming from an individual or individuals with vested interests. There are but a handful of these around with the financial capability of doing so. The current Kimberley saga illustrates that these individuals are prepared to go to extraordinary lengths. Perhaps shes dipped into the coffers again, or perhaps one of the others have. Let’s wait and see.

  15. Steve Reid says:

    Background to Q4.

    The relationship between the NHA and Phumelela has over the years been far too close for my liking. At times it has been difficult to differentiate between who was regulating and who was being regulated. This cosy arrangement transcended to the regulated doing the books of the regulated for an extended period. Talk about the fox looking after the chickens. This was exposed at an AGM where it was revealed that Andreas Heide, Phumelela CFO, was person responsible for the preparation of the NHA Annual Financial Statements. Things were so cosy between the two that certain expenses of the NHA were paid for by Phumelela and “claimed back” from monies owing to them. Now I’m not a financial or corporate governance whizzkid, but this scenario was definitely not appropriate and were apparently changed as per the subsequent years “independent” reports.

    On numerous occasions, specific expenses incurred by the NHA were formally requested by members, in particular, traveling costs for the NHA, and specifically senior management TRAVELING costs were asked for. Many promises were made and its only this current report that lists these expenses.

    Question No. 4

    1. At the NHA AGM in January 2019, members raised the lack of proper reporting of expenses by the NHA in its annual financial statements. The travel and accommodation expenses of past and current board members was explicitly discussed. To obtain a better understanding, I have cut an excerpt from the minutes of the meeting and pasted it below.

    “The Chairman said that in future it would be made very clear to everyone where the expenses were allocated.

    Adv Maselle thanked the Chairman, but said that he was more concerned with the past and would like Members to be provided with a breakdown of the expenses and where they have been placed in the financials.

    The Chairman requested the Auditor, Mr Rafael Gomes from Nolands, who was present at the meeting, to respond to Adv Maselle.

    Mr Gomes advised the meeting that the travel and accommodation expenses have been broken up and allocated into the various categories of expenses, as opposed to having a line item that says travel and accommodation. He said that for example, if the travel and accommodation related to Management, it would be sitting in the Management line item. Stud Book expenses would for example, be sitting under the Stud Book Department line item. That is how it is has been categorised at this point in time. He advised that as the National Board have indicated, Nolands had also recommended that in terms of transparency, this was not set out as it could be.

    Mr Gomes added that they had also recommended that in terms of expenses, function rather than by its nature, travelling, marketing, etc. would better represent what the expenses were used on, as opposed to the different categories presently set out.

    Adv Maselle said that this did answer his question, but he would like to know what the travel and accommodation expenses for this period were and this should be published on the NHA Website. He added that this was not to enable Members to point fingers, but to ensure transparency. He said that the very fact that the NHA have resolved to change the way it is presently done, indicates that there is a willingness on the part of the Board to make changes and show transparency. He requested an undertaking from the Board that this would be done and placed on the NHA website.

    Adv Maselle advised that the Members would be more than happy with an undertaking of a time frame of three months for this to be undertaken.

    The Chairman thanked Adv Maselle for raising the issues and added that the NHA agreed with him. He gave Adv Maselle an undertaking that he would comply with his request, within a reasonable space of time and thanked him for his input.”

    2. Even though it is not recorded in the minutes of the AGM, Adv Maselle’s questions related to him having requested the figures spent by management of the NHA on travel and accommodation and having been given false answers by Lyndon Barends, the ex-CEO of the NHA.

    3. A search of the NHA website will show that despite the Chairman, Ken Truter making a firm promise and agreeing that the NHA would publish the relevant travel expenses on its website within a reasonable period of time, the NHA did not publish these amounts.

    4. On 24 April 2019 the Auditors of the NHA addressed Mr Ken Truter and set out the following:-

    “Dear Mr Truter

    The National Horseracing Authority of Southern Africa (‘NHA’)

    Report on Travel, accommodation and related disbursements contained within the 2018 Annual Financial Statements

    At the 137th Annual General Meeting of The National Horseracing Authority of Southern Africa (‘NHA’) held on 16th January 2019, as request was received for the Board to disclose and make available the total amount expended during the 2018 financial year (being 1 August 2017 to 31 July 2018) on ‘Travel, accommodation and related disbursements’. The reason for this was due to the Annual Financial Statements, specifically the operating expenditure, being prepared and disclosed according to the function of the expense and not the nature of same.

    As requested, and as provided by the NHA’s financial department, we have extracted the necessary expense accounts pertaining to ‘Travel, accommodation and related disbursements’ from the functional expense line items contained in the 2018 Annual Financial Statements, the results of which are as follows:

    Travel, accommodation and related disbursements
    Totals (in ZAR) for the period 1 August 2017 to 31 July 2018

    Business Mileage Claims
    R49 684,76
    Travelling and Subsistence*
    R3 906 763,85
    Total R 3 956 448.61
    * Of which R 1 471 568,68 relates to Management.

    In an attempt to remain transparent, it would be worthwhile to note that, per management, the 2019 Annual Financial Statements will disclose the expenditure line items by nature and not by function.

    This report is solely for the use of the aforementioned and may not be useful for any other purposes.

    Yours faithfully

    Nolands Incorporated”

    5. It is clear from the letter of the NHA Auditors, that for the 2018 Annual financial period, the NHA incurred R3,906,763,85 for traveling and subsistence costs, of which Management spend amounted to R1,471,568.68. Looking at these figures in perspective, the traveling and subsistence expense of the NHA for 2018 amounted to approximately 14,5% of the total expenditure excluding the human resource costs. As an average monthly cost the NHA spends R325 000 on traveling costs. Have this authority ever heard of net meetings and/or conference calls?

    6. These expenses were published on their website in its 2019 Annual Report (approximately 11 months after the request made by Adv Maselle). You can make up your own mind why these figures were never published on the NHA website as promised before this.

    7. I wonder how much business Boarding Pass travel agency received from the NHA by way of travel and accomodation bookings over the years?

    8. Is there truth to the rumour that there was fraud committed by the former CEO in terms of travel expenses and that legal steps were being considered by the NHA to reclaim these monies? Nowhere in the report or notes is any mention made of this, but there is an extraordinary expense of Forensic & investigations costs in the amount of R572,931.00 with no explanation thereof.

    Tomorrow we discuss director emoluments.

  16. Steve Reid says:

    A tip for Vee. When listing your BEE figures, the following is applicable:

    https://www.bbbeecommission.co.za/frequently-asked-questions/who-qualifies-as-a-black-person-for-purposes-of-b-bbee/

    You may want to confirm and change your scorecard accordingly. Skin colour is not good enough if the individual does not meet the criteria.

  17. WILLIAM MILKOVITCH says:

    Steve, the extended period of time that Andreas Heide was assisting with the preparation of the NHA’s annual financials…. has that ended, as a practice ?

  18. Brendon says:

    @Steve, well done on this impressive contribution.

    I have been informed by my reliable sources that members of the leadership structure of the NHA are urgently (and desperately) seeking to engage you on the notable contribution on this thread. You may just receive a special invitation to the AGM and SGM.

    To clarify my contribution above – members should be questioning the National Board to determine whether there is a business imperative for the compulsory retirement age be lifted from 70 to 75 years. In the absence of credible responses from the Board, members must call for this Board to step down for allowing this self-serving proposed amendment to the constitution to be tabled. If the Nominations Committee of the National Board confirm that they have conducted an extensive search for prospective board members and the only suitable candidates identified warrant this proposed amendment, then one can accept that this proposed amendment is a business imperative. I have my doubts and I maintain that this proposed amendment is a self-serving one to extend the term of this current directors.

    In 2017, PriceWaterhouseCoopers (“PWC”) compiled a report on non-executive directors which was based one to 343 companies listed on the JSE. PWC reported the NON-EXECUTIVE DIRECTORS’ MEDIAN AGE as follows:

    Upper quartile – 52 years
    Median – 50 years
    Average – 51 years
    Lower quartile – 47 years

    PWC reported the MEDIAN BOARD TENURE FOR NON-EXECUTIVE DIRECTORS as follows:

    2013 – 4 year
    2014 – 3 year
    2015 – 2 year
    2016 – 3 year
    2017 – 4 year

    It’s high time that the respective boards in the Horse Racing industry get in touch with the market that they operate in and redress their profile to resemble corporate SA.

    The crisis in the industry was primarily created by the absence of rotation (not musical chairs) of directors/executives, the resistance to the introduction of new blood, the failure (of the leadership to transform themselves) to understand the markets in which they operate and a culture of not being held accountable for the actions.

    Let’s hope change is around the corner!

  19. Steve Reid says:

    @William when the question was asked regarding the compilation of the financials, we had already determined that the NHA at the time had no individual capable of doing the work and that it had been outsourced, They now have a Financial Manager so you would expect that it is now being done internally. Recently a financial query was referred to an individual for comment and upon her reply to the question, she had a Phumelela email address. We were told that she is “shared”. So make what you want of that.

    @Brendon I had a good chuckle at your comment. The only time that the NHA have shown any urgency in communicating with me was when they were in the process of charging me for bringing racing into disrepute. I have more chance of attending the AGM/SGM than Donald Trump taking his summer break in Tehran. Your observations on the old boys club and their attempts to extend the ineptitude shown for years is appreciated.

  20. Steve Reid says:

    Question No.5 Directors emoluments.

    In the 2018 NHA financials the following is stated on page 59 of the report:

    The Authority did not pay any directors’ emoluments during the year to the non-executive members of the board (2017: Nil), other than for travel and accommodation purposes

    In the 2019 NHA financials, the following is stated on page 56 of the report:

    The Authority paid any directors’ emoluments during the year to the non-executive members of the board R331 782 (2018: R539 574) including travel and accommodation and fees.

    So where was the R539 574 accounted for in the 2018 report? Very messy indeed.

    The National board met on four occasions IN 2019 according to the report – thats a cost of R83000 per meeting. Isn’t it ironic that a meeting was held in Cape Town at Met time, in Durban at Vodacom Durban July time, and in Johannesburg at Summer Cup time? How convenient. A maximum of six board meetings a year are catered for yet four was deemed sufficient, we clearly are an industry that needs little guidance from the board it would seem.

    Some observations on the 2019 report that Vee would do well to rectify going forward:

    In the Racing Administration section, it is embarrassing to observe that for the second year in a row, the legend used for the bar graphs have been swopped round and incorrect data put into the formula. This has had the effect of creating the illusion that numbers are showing growth from Individual owners through stable employees when the reality is that these numbers are declining. I suppose this is a rather ingenious, albeit false way of painting a rosy picture. How has this slipped through the checks and balances. Dr. Konar will have a field day at the upcoming AGM.

    Whatever happened to the Marketing and communications department? Too much management input from the Chief Executive? It’s like it never existed…

  21. Francise says:

    Is it just coincidence that the AGM is being held on a date that finds most people in the industry in Cape Town for the yearling sales?

  22. Brett Maselle says:

    Tomorrow or Monday, the Sporting Post will receive what I believe to be the most important “comment” I have ever made regarding the NHA and its leadership.

    The end result of the comment will be that the hierachy of the NHA is illegitimate.

    I will be focusing on the below mentioned provisions of the NHA ConstitutionI welcome anyone to do the simple investigation.

    All answers can be found on the NHA website. The worst part of this is that I cannot not help feeling that this has been known but swept under the carpet.

    The Nominations Committee

    14.1 A NOMINATIONS COMMITTEE, consisting of at least 4 persons, will be established to
    appoint NATIONAL BOARD DIRECTORS.
    14.2 The NOMINATIONS COMMITTEE will be made up of persons who previously served
    as a chairperson of the NATIONAL BOARD for a period of not less than twelve
    consecutive months (“the NOMINATIONS COMMITTEE incumbent”) subject to the
    following criteria:
    14.2.1 He must be a MEMBER, in good standing, of the NHA and not have reached the age
    of 80 years;
    14.2.2 Should a NOMINATIONS COMMITTEE incumbent cease to be a MEMBER or
    should an incumbent reach the age of 80 years, he shall be deemed to have resigned
    from the NOMINATIONS COMMITTEE.

    The National Board Directors.

    15.1 Subject to the transitional provisions set out in clause 15.6 below, there shall be a
    maximum of nine NATIONAL BOARD DIRECTORS, seven of whom who shall be
    appointed by the NOMINATIONS COMMITTEE in the manner set out below.
    15.1.1 Five persons who are MEMBERS in good standing but are neither TRAINERS,
    ASSISTANT TRAINERS, STABLE EMPLOYEES, JOCKEYS nor APPRENTICE
    JOCKEYS (excluded positions); and
    15.1.2 Two independent persons who for a period of at least 3 years prior to their
    appointment, did not hold any excluded positions, were not licenced or employed by
    the NHA in any capacity, did not breed horses and/or did not hold any office or
    interest in any thoroughbred business.
    15.2 In order to ensure representation of the management of the NHA on the NATIONAL
    BOARD, the MANAGING DIRECTOR and the RACING CONTROL EXECUTIVE
    shall be NATIONAL BOARD DIRECTORS.

    15.4.5 of the five MEMBERS to be nominated in terms of clause 15.1.1:
    15.4.5.1 at least one shall be domiciled in the Central Provinces RACING DISTRICT;
    15.4.5.2 at least one shall be domiciled in the Kwa-Zulu/Natal RACING DISTRICT;
    15.4.5.3 at least one shall be domiciled in the Western Cape RACING DISTRICT; and
    15.4.5.4 at least one shall be registered with the NHA as the owner of a stallion and/or
    mare at stud.

  23. Pieta says:

    BM and SR…..thank you for highlighting all of this….👍
    Looking forward to direct answers to your questions at the meeting.
    Not sure if I should hold my breath with that lot……

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