The 12th of January 2015 saw the One Hundred and Thirty Third Annual General Meeting of the National Horseracing Authority. I think a hundred and thirty three years of anything is something to be proud of, so it would be remiss of me not to take the opportunity to thank all the folks who keep the wheels turning.
I know AGM’s are not generally known for their entertainment value (sadly all too evidenced by general attendance numbers), but the appointment of Adv Joubert as Chair seemed an excellent one. He has an impeccable CV and I felt he acquitted his debut meeting exceptionally well. It was therefore a shame to hear that he was to be replaced after only a year, and the positive energy and focus that was so in evidence at last year’s meeting seemed somewhat lacking this time round. But change is perhaps not always a bad thing and as Darwin said, it’s not necessarily the strongest that survive, but those most adaptable to change.
Participation, or lack of it, raised its head early on, as a number of the Board were not in attendance and membership was so thin on the ground that the meeting had to be delayed until Vanessa Moodley could be roped in to form a quorum. It’s rather a shame that so few people bothered to turn up and a distinct air of disinterest and apathy seemed to pervade the meeting.
Agenda
There were 5 agenda items including the confirmation of the 2014 AGM and SGM minutes, the Chairman’s Report (the CEO’s report was not an agenda item), the Financial Statements, the appointment of the company auditors and the consideration of any other business, which included a number of items by arguably two of the most active members, Adv Brett Maselle and Mr Steve Reid.
Minutes
It would be fair to say that Dr Len Konar is well versed in the art of corporate governance and he had substantial input as to the style and format of the AGM minutes, but these were agreed without too much fuss. There were a few minor administrative corrections to the SGM minutes, but again, these were accepted fairly readily.
Chairman’s Report
Adv Joubert is an articulate and compelling speaker and took us through the goals he had set for his tenure as Chair. The first of these was improved management within the NHA, which had been achieved with the appointment of an HR officer as well as the appointment of David McGillivray as Racing Control Manager, who was tasked with raising our Stipendiary standards. Unfortunately Mr McGillivray has left the organisation for financial reasons, but has left a legacy in the work he left behind. He has also endeavoured to make himself available for consultation until a suitable replacement is appointed.
The second point was to improve the efficiency of the core functions of the NHA. Adv Joubert made the point that the integrity of racing paramount and therefore that as the industry regulator, the NHA’s integrity should also be above reproach. However, high standards do not come cheap and the escalating running costs, most of which are currently borne by the operators, became something of an on-going theme during the meeting. Adv Joubert felt that bowing to costs could only lead to a compromise in integrity, but increased running costs would have a negative effect on the operators. Accordingly, an MOU has been signed by all parties, to consider alternative mechanisms for the funding of regulation of horseracing. This will come into effect over the next few months.
Other factors addressed included the handicapping system, which underwent considerable scrutiny with the 6 point rise in Merit Ratings, the subsequent reversal of the decision as well as several workshops to review the systems we have in place. After extensive review and consultation, the decision was taken to remain with the system we have. The restricted race issue was also addressed with the implementation of 3 logs: one without restricted race earnings; one to include international stakes earnings; and a third to include all stakes including restricted races and international earnings.
Laboratory equipment has been upgraded. Another area that had been addressed was that of race day medications. It has been decided to dispense with the ‘3 strikes, you’re out’ approach and to replace it, a 10-page set of guidelines have been drawn up which should provide greater clarity for trainers, greater consistency in the application of penalties and also a better risk profile for contraventions. This document was felt to be the biggest advancement in improving the core functions. Other contributions were the assistance of the RA in helping trainers with the recovery of outstanding training fees.
Financial Statements
Rather unexpectedly, the review of the financials provided some lively issues. Adv Brett Maselle produced a startling allegation of that there has been a misappropriation of R1,47 million from the Trainers’ and Riders’ Benevolent Fund. I am not as familiar with the rulebook as Adv Maselle, but was interested to hear that there is a rule (Rule 98) which deals specifically with the management of a Benevolent Fund for trainers and riders. The rule originally stipulated that ALL fines and forfeited deposits collected by the NHA were to be transferred directly to the Benevolent Fund. However, this was amended in 2013 and the portion reduced from ALL to 20%. Adv Maselle produced a printed supporting document and the Board agreed to investigate the matter.
Another interesting item to result from the Financial Statements was the fact that the preparation of the finances was outsourced to a third party to save on costs. The appointed party is in fact Phumelela’s CFO, Andreas Heide.
Dr Konar raised a number of corporate governance issues with regards to the preparation and presentation of the financial statements, to which the auditors responded that they had not had sight of the first 35 pages of the annual report. Dr Konar pointed out that external auditors should be evaluated on a regular basis and the auditors then had an opportunity to motivate their reappointment. Rian du Plessis interjected on behalf of the operators that while it was desirable to comply with transformation and corporate governance, the NHA was only accountable to members and the operators and that costs needed to kept in mind. The auditors were reappointed, with Dr Konar and Adv Maselle abstaining from the vote.
Any Other Business – Adv Maselle
As expected, a number of issues were raised under the AOB banner. Adv Maselle’s query as to why the report generated by the review into the 6 point Merit Rating hike and subsequent reversal was not made public. Robin Bruss gave an illuminating summary of the review process and stated that while MR’s had been raised before without objection, the furore caused this time required a response. Extensive review showed there to be a discrepancy between local and international ratings, due to ‘slippage’, so while the 6 point hike was reversed, going forward increases will be made incrementally in order to bring SA ratings into line with foreign racing jurisdictions. With regard to the report, it was felt that the necessary consultation had been done and publication of the report would only create additional, unnecessary debate.
The on-going issue of the International Jockey Challenge was raised again with regard to a number of issues raised by Adv Maselle. Mr du Plessis spoke on behalf of the Operator to ask whether there were hidden agendas behind the matter and if so, whether action should be considered against members.
The appointment of Larry Wainstein to the NHA board was queried as he is not a board member of the RA. When the matter was debated, the version of the Constitution that Mr Pillay was working from, seemed to be incorrectly worded to Adv Maselle. This matter will be looked into further.
A query regarding the publication of voting lists was answered with the fact that lists of people qualified to vote were drawn up in the past, although these lists were not titled ‘voting lists’. Issues surrounding the publication of SGM minutes other correspondence were addressed in writing. In response to the issue of the Operator funding of the NHA, Mr Pillay stated rule 100.1 (‘Every Racing Operator shall pay to the National Horseracing Authority an amount equal to its share of the annual costs of the NHA as set out in the NHA’s budget as approved by the National Board’). However, he confirmed that engagements were presently taking place that may result in these rules being changed in time to come.
Any Other Business – Steve Reid
Mr Reid cited concerns over a number of racing control issues. He asserted that our Stipes do not object as often as they should, showing that international jurisdictions reflected much higher numbers. Mr Witts-Hewinson explained that the publication of high numbers of objections may lead to the perception that the sport isn’t clean, which had led to the ‘Admission of Guilt’ system instead.
With regard to the lack of permanent NHA personnel in Kimberley, costs were cited as the overriding stumbling block. Rian du Plessis spoke on behalf of the Operator to say that Kimberley was the most expensive centre and that most local racing is running at a loss. However, alternatives may be considered.
The status of Smanga Khumalo’s legal challenge came under discussions and members were informed that the matter is on-going. Subsequent to the original inquiry and hearing, Mr Tarry produced an affidavit recanting his original evidence. Mike de Kock, who was not present at either the inquiry or the hearing, has also submitted an affidavit stating his opinion that he found nothing wrong with Khumalo’s ride. The NHA are taking legal measures to have these affidavits struck from the evidence. It is hoped that the matter may be heard in April or May.
By this time it was getting late and the meeting was drawn to a close. On behalf of all the members, Mr Costa thanked Adv Joubert for his long service to the NHA, both as a board member as well as in the role of Chairman.
The Board were originally scheduled to meet directly after the AGM to elect a new Chairman, but it was decided to defer the election until a later date.
In conclusion
The day’s proceedings ran a little over 2 hours and it was hard going in places, with even seemingly serious issues struggling to find traction or much in the way of a reaction. A point that came across very clearly was that lack of sufficient funding was compromising the NHA’s ability to function efficiently and contrary to last year’s assurances, the funding relationship between the NHA and the operators is clearly NOT an easy one.
It got me wondering what the official purpose of an AGM really is. A quick search suggested AGMs provide an opportunity for members, the general public and the committee to take a broad overview of an organisation’s current direction, financial health and confirmation of its purpose. It is a platform to appoint members into key elected positions and perhaps most crucially, it functions to provide an opportunity for office bearers to interact with the membership, answer questions and seek their views. In other words, in a correctly functioning meeting, it should allow for across the board participation.
It was a shame that so few people were prepared to even turn up, nevermind stand up and make themselves heard. An organisation can only be as strong as its members and I hope something can be done to encourage more active participation going forward.
