Regulator Sets Sights On Kenilworth Racing

Another body blow - but NHA forced to act

In further developments in the fast unfolding challenges facing Cape Racing, the Sporting Post learns that the National Horseracing Authority has flexed its regulator muscle.

In something of an unprecedented move, the NHA has called on Kenilworth Racing Pty Ltd to show evidence of its financial viability and sustainability in advance of the consideration of the renewal of the company’s Operator’s Licence.

The Sporting Post has had sight of a letter dated 11 May 2022 addressed to the Chairman of the Kenilworth Racing board, where the racing regulator’s urgent requirements are spelt out.

The communication advises that the NHA board recently passed a resolution in terms of which a sub-committee was formed with a specific mandate to consider the veracity of certain allegations and to the extent possible, formulate and report to the board on whether a breach has occurred or possible breach may occur of the licensing conditions and the provisions of the NHA Rules, specifically Rule 44.3 pertaining to Racing Operators.

What the regulations state:


44.1 A RACING OPERATOR shall be bound by, and shall hold its RACE MEETINGS under the RULES and shall not hold a RACE MEETING at any place other than the RACE COURSE or RACE COURSES specified in its licence, except by permission of the NATIONAL BOARD.

44.2 A licence to RACE under the RULES shall only be granted to a RACING OPERATOR, which agrees to abide by and be bound by the CONSTITUTION and the RULES and which conforms with and conducts 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.

44.3 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.

44.4 A RACING OPERATOR shall be required to re-apply for a licence annually. Such application should be made in writing at least 3 months before the current licence is to expire. The Application shall be considered by the NATIONAL BOARD as provided for in RULE 7.6. If the NATIONAL BOARD is of the view that a licence should not be granted or renewed, it shall afford the RACING OPERATOR a hearing before making a final decision on the matter.

44.5 The NATIONAL BOARD may, in its sole discretion, after a hearing, cancel any licence granted by it to a RACING OPERATOR or suspend any RACING OPERATOR from holding RACES.

44.6 A RACING OPERATOR shall observe, abide by and enforce the CONSTITUTION and the RULES, and all instructions and decisions of the NATIONAL BOARD, made from time to time, failing which a RACING OPERATOR shall be liable to be suspended, or have its licence withdrawn at the discretion of the NATIONAL BOARD.

The action follows certain information provided to the regulator by former KR Chairman  Robert Bloomberg, and also the NHA’s attendance as observers at the stakeholders meeting held at Kenilworth Racecourse on the evening of 5 May.

The NHA also makes reference to the open letter of 9 May  to stakeholders of Kenilworth Racing.

See the open letter -please click here

The letter addressed to the KR Board on Wednesday records that it has come to the attention of the Board of The National Horseracing Authority that a genuine belief existed within the structures governing and or controlling Kenilworth Racing that the company inter alia lacked commercial viability and / or sustainability.

In addition, the NHA was informed that Kenilworth Racing was considering passing resolutions to encumber some of its assets which would be in contravention of its licensing conditions as stipulated by the Western Cape Gambling and Racing Board (“the WCGRB”).

National Horseracing Authority

The NHA states that these are serious matters and allegations which they are obliged to investigate.

Based on this, the NHA board passed the abovementioned resolution to form a sub-committee to investigate the matter.

It is said that the NHA notes with grave concern that the views expressed now appear to be one of fact.

This is underlined by the contents of point 2 of the open letter where the board of Kenilworth Racing conceded as follows:

“The stakeholder engagement was an opportunity (and intended) for:

“2. The KR Board to communicate its consensus belief that KR is not viable or sustainable in isolation, and that we believe a sale of all, or part of KR’s assets (most likely to an existing Operator) is necessary to ensure the continuance and long-term sustainability of horse racing in the Western Cape”.

The NHA communication says that the above admission renders it common cause that Kenilworth Racing is financially distressed as defined in the Companies Act No.71 of 2008 and this necessitates a written response from the board of Kenilworth Racing to the following questions:

  1. Is Kenilworth financially distressed as defined in terms of the Companies Act?
  2. If not, please provide reasons and evidence that the board placed reliance on in reaching such conclusion.
  3. If yes, please explain as to why the board of Kenilworth Racing has not as yet resolved to voluntarily begin business rescue proceedings as required in terms of the Companies Act? Please include any documents and evidence that the board relied upon in reaching this conclusion.
  4. Given the information shared publicly, including the statement made by Mr Wehann Smith at the stakeholders meeting referred to above that Kenilworth Racing had to borrow funds to pay salaries for the last two months, it appears evident that there are reasonable grounds to believe that the company is financially distressed. Has the board of Kenilworth Racing complied with ss.129(7) of the Companies Act?
  5. If no, please explain why the board of Kenilworth Racing has not or believes it does not have to comply with ss.129(7) of the Companies Act.
  6. If yes, please provide the board of the NHA with a copy of such notification that would have been delivered to each of its affected persons?
  7. Has the proposal to dispose of all or a greater part of the Kenilworth Racing assets been considered and / or approved by a special resolution of its shareholder? In this regard, for the sake of clarity, please note that the question relates specifically to the assets of Kenilworth Racing and not the shares of Kenilworth Racing held by the shareholder.
  8. If yes, please provide us with a copy of all such notices and resolutions passed.
  9. The understanding is that the WCGRB must, in advance, approve in writing any encumbrance or disposal of any property that accrues to Kenilworth Racing. Have these approvals been obtained? If yes, please furnish us with copies of all such approvals.
  10. Have all Totalisator Operator License conditions with the WCGRB been complied with in order to give effect to any such proposed transaction?
  11. What funding has been secured to sustain Kenilworth Racing for the ensuing minimum period of six months? Please provide us with copies of all documents and agreements in support of your response.

It states in the letter that it appears to the board of the NHA that the open letter from Kenilworth Racing appears to signify a ceasing to conduct itself in a manner which conforms with legislation in force for the time being in the Western Cape and thereby in transgression with NHA Rule 44.3.

The NHA states that the Operator’s Licence held by Kenilworth Racing is up for renewal on 1 August 2022 and that the NHA cannot issue any written confirmation to the Western Cape Gambling & Racing Board to renew the licence, unless the above matter is fully addressed and warrants the renewal of the licence.

A deadline for a response by 19 May has been set and it is intended that a copy of the NHA letter,  together with KR’s written responses, will be shared with the WCGRB.


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