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Why Are Phumelela ‘Intent On Court Action’?

Government's displeasure at racing operator decision

Last year Phumelela said the proposed amendment to Gauteng’s gambling regulations could cost it R75m a year while also damaging the local horseracing industry.

Gauteng MEC for Economic Development, Agriculture and Environment, Ms Morakane Mosupyoe,has said that she  finds it unfortunate that after months of settlement negotiations, Phumelela Gaming & Leisure, has closed the door for further engagement with her department..

Government has now learnt, as at Friday, 31 January 2020, that Phumelela intends taking the matter to Court.

Ms Morakane Mosupyoe

In a press release the department says that this is regrettable as all Gauteng Thoroughbred Horseracing stakeholders were looking forward to an all-inclusive and lasting solution to the current challenge.

On 1 April 2019, after due legislative process was followed, the then MEC for Economic Development, Mr Lebogang Maile, gazetted the amendment to Regulation 276 of the Gauteng Gambling Regulations, in terms of which the payment of public funds was withdrawn from Phumelela and retained by the Gauteng Provincial fiscus.

Historically, the Gauteng Gambling Board collected levies and paid this over to Phumelela – which is the sole holder of a totalisator and race meeting licence in Gauteng.

The Gauteng government has since reviewed this practice and decided that these public funds will be utilised by the Gauteng government.

Phumelela then decided to take the MEC and Gauteng Gambling Board to Court, to compel the payment of public funds to Phumelela to be used for its benefit. This High Court litigation then brought the parties around the table to discuss how best to manage these funds – for the benefit of the Industry at large.

The MEC and Gauteng Gambling Board were hopeful that an agreement could be reached that enhances transformation within the industry at large, including horseracing (in the hands of Phumelela).

It is regrettable that Phumelela appears to be intent on having this matter kept in the hands of the Courts.

The department believes that this agreement would have accelerated transformation and the implemetation of broader government objectives.

Government hoped to achieve the following:-

1) The increase of black ownership and meaningful participation in Phumelela (itself a product of Government assistance);

2) The creation and adoption of an industry turn-around strategy;

3) The creation of a Trust to develop and benefit Industry stakeholders such as the most vulnerable in the horseracing industry – the groom; and

4) The utilisation of the said public funds to provide satisfactory human settlement for the grooms in and around Gauteng.

The MEC stands by her decision to withdraw public funds from Phumelela and will defend her position in Court.

Notwithstanding these developments, the MEC is hopeful that even at this late hour, reasonableness will prevail.

The MEC remains open to engagement with interested parties for the betterment of the Industry.

  • Summary of press release issued by Gauteng Department of Economic Development on 4 February 2020

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16 comments on “Why Are Phumelela ‘Intent On Court Action’?

  1. MGram says:

    I hope they lose. They have stoken so much and now want to continue. All the points made by the MEC will benefit racing. ‘TSEK Phumelela!

  2. Gman says:

    Leave it to the courts.They will see who is in the wrong

  3. Steve Reid says:

    You would wonder if there is a single brain cell between the entire Phumelela executive. The “itself a product of Government assistance” comment from the MEC is very telling indeed. A bunch of whities expecting to take back from the government when there has been little but window dressing on the transformation front.

    Good luck with those legal fees, just what is needed at the minute in your cash flush business.

  4. Brian says:

    I’m not entirely in a position of all the facts but, based on this story, I’m not sure PG is in a strong position
    Maybe Mr Masselle would join and comment

    Please excuse spelling mistakes, the bloody phone has an incorrect mind of its own

    Rather like the NHA

  5. Ian says:

    Let us not kid ourselves – this has nothing to do with transformation.It is all about governments greed!

  6. DavidS says:

    Well either the Government gets the money or the greedy corporate gets the money, lose lose for racing, I personally feel Phumelela have feasted enough while devouring racing accumulated wealth, so maybe give the government a turn at the table, make no difference who eats, one thing is sure and that is racing itself has not benifited under Phumelela, racing’s so called leaders(board members) have turned a blind eye for far too long and are just as responsible for the lousy situation racing is in

  7. MGram says:

    A statement was made by one of the journalists at the Phumelela.results presentation that went something about you cannot litigate into a profit. Kantor agreed wholeheartedly and said the days of serial litigation were over. Does the new one that parts the Red Sea think differently?

  8. Fred says:

    You have to start asking questions about the Phumelela directors and their legal advisors.

    Everything that I have read points to Phumelela having no enforceable right to demand 3% of the bookmakers levies from the Gauteng Government.

    Phumelela was extremely lucky that for the past 10 years the Gauteng Government was completely asleep and did not revoke the 3% Phumelela received.

    The directors running Phumelela have not appreciated that there can never be a settlement. It’s either the Gauteng Government is correct or Phumelela is correct.

    The money belongs to the people of Gauteng and not to a money grabbing gambling company.

    We have over 35% unemployment and the money will be better spent on the residents of Gauteng.

    The directors of Phumelela and its advisors should be fired after Phumelela loses the court case. Phumelela should sue its directors and advisors for the bad decisions and advice. The money should be put to better use.

  9. Ignis Fourie says:

    Phumelela does alot for the racing industry and if there funds get withdrawn instead of being put back into the industry. The sport will die and thousands will lose there jobs. Government wishes to take the money and spend it the way they want to. Also the grooms etc gets looked after very well and that is great for the industry. Imagine giving shares to all the groomsmen and stable jocks. What will happen to the industry in a year or 2.?

  10. Brian says:

    Thing is Ignis, IF, the money is not rightfully PG’s then quite simply, they have no right to it.


  11. Brett Maselle says:

    Ignis Fourie sings the same diseased tune as the PGL directors.

    The problems which PGL encounters are self created. There has been little forward thinking and less thought about horse racing remaining a viable sport. Instead of directors and management resigning and acknowledging poor performance, PGL continues with the usual suspects on its collision course with failure and blaming others for its misfortune.

    If it is not about PGL’s directors, management and major shareholders clinging onto power and self enrichment, then it should be about horse racing as a whole and PGL being placed under business rescue. Unfortunately, its all about PGL and not horse racing.

    I agree with the sentiments of Fred and Brian.

  12. killer says:

    Fred – your comment “We have over 35% unemployment and the money will be better spent on the residents of Gauteng” – what country have you been living in – where in your life will they EVER give it to GAUTENG residents – it ALL will go to someones brothers sister uncles aunt or 4th cousins nephew.If there’s one thing that is clear as daylight, THAT monies will get lost in the system somewhere to someones family member and the MEC position will once again change hands and no one held accountable.

    The money grabbing company u refer to is just about the only thing that keeps racing in SA alive – its just about the stand alone company in giving back stakes – and yet it has to keep fighting to keep itself alive from the sharks all around it. The MEC for Economic Development have seen an easy way to make and steal another buck and make it seem as if they fight for the people.

    Courts can be manipulated and its proven all round it all depends on who u know to make it happen.

    We all seem to forget that Phumelela is run like any OTHER company in SA who has directors – NO DIRECTOR anywhere in big corporate companies care for anyone but themselves.

    The bottom feeders who toil all day, in and day out, night and day, holiday and weekend who actually pays the wages of the big wigs are never recognized.

    As much as what we recognize there is rot in racing in SA – we have to recognize that they are keeping horse racing alive and they are paying a hell of a lot of wages.

    IGNIS is 100% – give it to the grooms or anyone else and the whole industry is doomed. It will not be there 6 months tops.

  13. B Steele says:

    If anybody believes that the said R75 m will be used to benefit anybody other than the local government must then also believe that SAA is a profitable business.
    PGL is no worse than the government when it comes to accountability,who would you rather have to get the money.

  14. Donald says:

    I am afraid that KILLER and B STEELE have summed it up very well , unfortunately !

    No well managed services or accountability from any sphere of government from clean streets to electric power and everything in between !

    Weak management and some accountability from P.G.L. which delivers a horse racing product that we can at least observe !

    Chalk and cheese you say ?

    Yes , one has access to the entire treasury and the other has to rely on generation of its own income by whatever means and now government wants to pour that little amount down a hole which does not benefit the industry which has generated that income !

    Tough times indeed !

  15. Wragties says:

    What window dressing Steve? Have you seen the latest BEE certificate? They have given up and are no longer pretending. Don’t know how to attach the file here.

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