In response to recent media reports and stakeholder concerns regarding a proposed equity transaction, SA Rugby has announced a governance review by an independent audit firm.
IN RESPONSE to recent media reports and stakeholder concerns regarding a proposed equity transaction, SA Rugby has announced a governance review by an independent audit firm. The review aims to confirm adherence to governance requirements surrounding the transaction and address any technicalities raised.
The executive council of SA Rugby convened on Friday to discuss these concerns, which primarily relate to a proposed investment by the ASG Group into SA Rugby’s commercial rights. The transaction did not secure the required 75% approval from the general council during a December vote.
The independent review will examine two specific elements of the transaction:
1. The establishment of Win by One (Pty) Ltd
- This Special Purpose Vehicle (SPV) was created as part of the transaction’s implementation plan, should it have been approved.
- Win by One (Pty) Ltd was 100% owned by SA Rugby and registered as a South African tax entity. Its purpose was to serve as a commercial entity shared between SA Rugby and its equity partner.
- The SPV was created following commercial best practices and under SA Rugby’s constitution. The CEO was temporarily named as the sole director as per customary practice for SPVs.
- SA Rugby clarified that Win by One LLP, an international entity established by ASG, is entirely separate and has no connection to SA Rugby.
2. Transactional costs and fee division:
- A maximum of 15% was earmarked for costs related to the transaction, including up to 5% for professional fees (eg legal, audit, and tax advisory).
- A success fee for brokers was initially set at 10% but later renegotiated to 8%.
- The division of the success fee among brokers would have been their responsibility.
- Despite the proposal not being approved, all governance protocols were followed in determining fees, and no payments have been made to brokers. Professional fees incurred will be covered by SA Rugby.
TRANSPARENCY AND GOVERNANCE COMMITMENT
The creation of the SPV and the negotiation of fees were conducted transparently and in compliance with SA Rugby’s governance policies. The organisation emphasised that the governance review will provide further clarity on these matters, and additional information will be shared once the review is concluded.
SA Rugby said it remains committed to upholding its governance standards and reassuring stakeholders of its compliance with all necessary protocols.