The North Gauteng High Court has finally drawn a line through a report by the Public Protector, Advocate Busisiwe Mkhwebane, regarding the corporatisation of the thoroughbred horseracing industry.
As reported earlier this week by the Sporting Post, the court has not only reviewed and set aside both her findings and proposed remedial actions, but also ordered her to pay the costs of the court action.
Mkhwebane’s report, titled “Allegations of Maladministration and Improper conduct in connection with a Memorandum of Understanding entered into between the Gauteng Provincial Government and the Gauteng Horseracing industry in 1997 which subsequently led to the Corporatisation of the Horseracing Industry”, received widespread media coverage upon its release in 2019.
The report followed a complaint regarding the legitimacy of the process to corporatise the racing industry in Gauteng in 1997.
Mkhwebane’s report set out her findings in respect of four 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.
* Whether the land on which Arlington and Bloemfontein racecourses are located, were owned by municipalities or the government at the time of the transfer to Phumelela.
Although the Public Protector concluded that only the complaint regarding the grant by the Horseracing Development Fund was substantiated, she recommended far-reaching remedial actions, inter alia ordering State President Cyril Ramaphosa to take note of the report and to constitute a Ministerial Committee to establish a statutory and independent body to regulate thoroughbred horseracing in the country.
Phumelela disputed the findings, as well as the remedial action, and approached the court to have it reviewed and set aside.
Prior to the hearing the parties entered settlement negotiations. The effect of the settlement is that the Public Protector conceded that her findings and remedial action were unsustainable and procedurally unfair and stood to be set aside.
The settlement provided that the Public Protector would pay Phumelela’s costs on a party and party scale, including the cost of three counsel. The settlement was made an order of court earlier this week. Phumelela’s review application has been comprehensively vindicated.
Mkhwebane’s report recommended that the Gauteng Gambling Board cease payment to Phumelela of a three-percent levy on winnings from horseracing bets taken by fixed-odds operators in the province.
The levy was subsequently withdrawn and the resultant loss of revenue to Phumelela was a significant factor in the company being plunged into a financial crisis and later going into business rescue.
Although Phumelela’s objections to Mkhwebane’s report are now fully vindicated, the order comes too late to reverse the devastating effect it has had on Phumelela.
- Media release by Phumelela on Friday 3 September 2021