South African Rugby gets A $1 Billion US Cash Injection

Editor's notebook ADRIAAN BASSON, EDITOR-IN-CHIEF The R1bn SA Rugby equity deal... and an elephant called Jurie Two years ago, I published a column in this space titled "Has Jurie Roux captured SA Rugby?". Roux, the now former CEO of SA Rugby, and his employers weren't thrilled. He took me to the Press Ombudsman and lost because his complaint was filed late. Two years later, the question remains relevant to every rugby fan who holds SA rugby and the Springboks dear. This time, Roux's influence is evident in the latest controversy to hit the governing body of rugby in South Africa – a R1.4-billion private equity deal with the little-known Ackerley Sports Group from Seattle in the United States. A bit of background: in 2015, Stellenbosch University issued a summons against Roux, the former financial director of the university, to repay R37 million he had unlawfully transferred from the university's reserves to Maties rugby club. The money was used to pay the accommodation and fees of Maties players like Peter Grant, Juan de Jongh and Ernst Joubert. Because of his impressive track record at Maties, Roux was appointed CEO of SA Rugby in 2010. On Roux's request, the university agreed to remove the matter from the roll of the Western Cape High Court and from public scrutiny, and initiate a private arbitration chaired by a senior advocate. In December 2020, the arbitration ruled in the SU's favour and ordered Roux to repay the R37 million. Roux appealed. In December 2021, he lost again. The heavyweight appeals panel found some Maties money ended up in Roux's account. But still, Roux wasn't done fighting a legal battle, possibly because he didn't have R37 million in spare cash lying around. So he returned to the Western Cape High Court and asked Judge Vincent Saldanha to set aside the arbitration award in 2023. He lost. And Saldanha ordered Roux to pay back not only the R37 million but also interest and legal costs. By this time, Roux's bill probably stood at around R50 million. He applied for leave to appeal and lost again. His petition to the Supreme Court of Appeal is expected to be ruled on in the next few weeks. Meanwhile, his accomplice in the so-called "Sparries" (savings) scam at Stellenbosch, Chris de Beer, was convicted of fraud by the Bellville Commercial Crimes Court two weeks ago and handed a five-year suspended prison sentence. The National Prosecuting Authority allegedly made a deal with Roux's lawyers to allow the arbitration process to come to fruition before criminal proceedings were instituted. That day is coming closer. Meanwhile, Roux was merrily conducting his business at SA Rugby, a body with the backbone of an amoeba. Year after year, SA Rugby found excuses as to why they could not act against Roux despite the very serious allegations he faced. Then suddenly, at the beginning of last year, SA Rugby president Mark Alexander announced Roux would "amicably" part ways with SA Rugby, but "be contracted to complete the implementation of the mooted equity transaction, as well as the handover to his successor, who will be appointed once the equity negotiations are finalised". Those in rugby administration saw this as a cynical move to remove Roux's name from the SA Rugby letterhead, but he remained working at SARU House in Plattekloof. His package as a consultant remains a state secret, but is rumoured to be more than what he earned as CEO. Different ballgame For the past year, Roux was exclusively negotiating with CVC, a private equity firm based in Luxembourg, London and New York, to buy a stake in a new company in which SA Rugby would be the majority shareholder. The argument is that such a transaction will inject much-needed cash into SA Rugby and help establish the Springboks as a global brand. But suddenly, at the end of last year, Roux, Alexander and acting SA Rugby CEO Rian Oberholzer (the late Louis Luyt's son-in-law) announced to the provincial unions they were now concluding a deal with Ackerley Sports Group from Seattle, which owns stakes in American sports teams and Leeds United, that plays in the English first division. If CVC is a Porsche, Ackerley is a Kia Picanto (no offence to Picantos), also a car, but a completely different ballgame. Alexander, Roux and Oberholzer are passionately trying to convince the provinces they should go with Picanto's offer. The deal on the table is reportedly a R1.4-billion injection into SA Rugby. Still, it is entirely unclear what Ackerley brings to the Springboks or why Roux moved his loyalties from Luxembourg to Seattle. The deal gets even more murky with the revelation that Ackerley doesn't have enough money, but was shopping around elsewhere in the United States to fund the transaction. The country's four largest franchises, the Bulls, Sharks, Lions and Stormers, are now desperately trying to determine what is going on. Their hard-hitting letter to the SA Rugby bosses, which News24 revealed last week, shook the earth in Plattekloof. Remember that they are the key shareholders of SA Rugby who will have to pay the private equity partner its share before profits, if any, are divided between the unions. A key question in the franchises' letter to SA Rugby is finding out the transaction costs, commissions and success fees if the Ackerley deal is concluded. And herein lies the nub: the country's largest rugby clubs, all owned by private investors, know Roux desperately needs R50 million to repay Stellenbosch University or face a dire financial future. It is wholly reasonable for all Springbok fans to fear the private equity deal is not being brokered in the sport's best interests, but to line the pockets of a few individuals.