Ferraris Letter – As Many Men, As Many Opinions

Explanations, denials, information

Horses use body language to communicate

The Latin phrase “Quot Homines Tot Sententiae” (As Many Men, As Many Opinions) best describes the current state of affairs in the horse racing industry.

Mr Ormond Ferraris’ letter which he wrote as a life-member of the Racehorse Owners Association (ROA) to the Sporting Post is a mixture of opinion, conjecture, truths and misconceptions in relation to the ROA.

See the Ormond Ferraris letter here.

“I noted with some alarm the comments made by Mr Bortz about the discrepancies in the due diligence performed on the ROA”

Firstly, the ROA would like to set the record straight in that no due diligence was ever requested or conducted on the ROA by Mr Bortz, with the knowledge of the ROA.

At no time was any current Board member contacted to provide information to Mr Bortz. Moreover, the financial statements of the ROA, as a non-profit company, are audited by independent auditors annually and are approved by its members and were approved for the last financial year.

“In my opinion, the ROA no longer has any relevance to, nor purpose in, the current structure of horse racing in South Africa – the burning question is what does it do for its members?”

“The ROA is a non-profit company and, as such, neither its income nor property may be distributed to its members, and must be used to advance the purpose for which it was created.”

The ROA wishes to clarify a particular legal point where Mr Ferraris made a statement of fact which is entirely inaccurate.

A non-profit company may not distribute income or property to its members upon winding up (liquidation), but since the ROA is not in liquidation and is entirely solvent, his statement is factually incorrect in law.

The ROA must adhere to its primary objectives as set out in its Memorandum of Incorporation (“MOI”), which includes amongst other objectives:

  • to promote the sport of horseracing;
  • promote the welfare and upkeep of racehorses;
  • to advance and promote the interests of the body of Members and to ensure they enjoy adequate facilities at racing venues, clubs and courses;
  • to negotiate on behalf of owners the basis on which stakes are to be paid;
    to supplement stakes and pay such supplemented stakes to owners should it be deemed appropriate by the Board to do so;
  • to pay grants or any other contributions to assist owners, trainers and/or grooms should it be deemed appropriate by the Board to do so.

The ROA has a broad mandate in terms of its MOI with many competing objectives. After consultation with industry stakeholders over the past few years, the overwhelming feedback from the industry was to supplement stakes for owners.

“What is concerning is that effectively the ROA is wrongfully distributing its income to its members, despite being a non-profit company, and accordingly forbidden to do so.”

The ROA denies that it is wrongfully distributing its income to its members as alleged by Mr Ferraris.

The current Board of the ROA took the decision to use dividends from Phumelela’s business rescue proceedings and deploy these funds directly back into bonus cheques for ROA members, which it is fully entitled to do in law, and in terms of its founding documents.

The nominations and declarations funded stakes contributions were applicable to all owners, not just members of the ROA. This is now the function of the operator and is beyond the control of the ROA.

“Why does the ROA do nothing about the paltry quality of food available at race courses”

The operators are responsible for catering at the racecourses for punters and owners and the ROA engages with the operator to improve the facilities and catering wherever possible. The ROA has facilities at the Vaal, Turffontein and Fairview which are well frequented and enjoyed by its members.

“Why does the ROA not engage with SARS in order to re-instate the tax benefits and deductions that used to be applicable with regard to racehorse ownership and breeding?”

The ROA published the tax benefits of owning racehorses in its standing newsletter in July 2021 and 2023 in anticipation of the tax season. It is not the ROA’s responsibility to affect government policy, but we will take it under consideration if there are any changes to be made.

“Previously, the ROA made a rather limited monthly contribution (from the nomination fees it received) to the Trainers Benevolent Fund, of which I am a co-trustee. The Benevolent Fund makes payment of medical aid
premiums, and also a small monthly grant in terms of its Deed of Trust to some retired, qualifying ex-trainers and spouses. We have now been informed that, save for a limited period going forward, 4Racing will no longer be making any contributions to the Trainers Benevolent Fund from the nomination fees or from any other source.”

Over the past ten years, the ROA contributed an amount in excess of R4,6 million to the Trainer’s Benevolent Fund.

Due to all operators handling the nominations and declarations going forward, the ROA is no longer responsible for the Trainer’s Benevolent Fund. We are disappointed to hear that this worthy cause is no longer a priority.

“Why does the ROA not make active and meaningful attempts to reduce costs for owners?”

Although this is a critical point for the industry as a whole, and one in which the ROA plays a part, it is not something that can be accomplished without broader industry involvement.

However, in the past few years, both during and post Covid, the ROA has played a major role in providing grants to owners and trainers during Covid to assist with costs, substantial supplementation of stakes post Co-Vid (together with operators on the Highveld and in the Eastern and Western Cape), to sustain racing through this tremendously difficult period of change, and the ROA pledged a significant contribution towards grooms welfare (medical insurance and funeral cover) in the past six months on the Highveld and in the Eastern Cape and to subsidise these costs.

In fact, the scheme has been opened to all stable hands and a better package negotiated for trainers on their request.

The take-up has been heartening to say the least! Currently, a ground-breaking initiative has been undertaken by the ROA, where training centre road shows have just been completed on the Highveld and the Eastern Cape, where the ROA will assist in developing owner-trainer contracts that provide for a professional, legal relationship between trainer and owner that will greatly assist in training costs being better managed and to foster more transparent ownership/trainer relationships.

“It has now become essential for change in this industry from the bottom up, and for that I applaud the efforts of Cape Racing and its Chairman”.

The ROA commends and applauds those who are supporting horse racing, however, Mr Ferraris, it seems that leadership is top down, not the other way round, and as there are many men, there are as many opinions.

Please feel free to engage us personally in future for a more detailed discussion on how we are all playing a part in improving racing standards and helping ensure that our sport survives and is enjoyed by all nationally.

  • Signed by
    Peter Riskowitz (Chairman)
    Desiree de Andrade
    Greg Kotzen
    Jessica Motaung
    Garth Towell
    Natalie Turner

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