Explained: Is rugby in the Eastern Cape being rescued?

Cheeky Watson isn't laughing anymore.  Photo: Michael Sheehan/Gallo Images.

Cheeky Watson isn't laughing anymore. Photo: Michael Sheehan/Gallo Images.

The Eastern Province Rugby Union under Cheeky Watson is bankrupt and under administration. Things are changing now but how?

The Eastern Province Rugby Union (EPRU) is known as the hotbed for black rugby talent.

But it’s been a depressing few years in Port Elizabeth as controversial president Cheeky Watson’s reign led to the liquidation of the union and an exodus of players.

The South African Rugby Union (Saru) was even roped in last year to take over as administrator of the union.

However, earlier this week, it was announced the EPRU will be in the hands of local administrators again after it adopted a new constitution.

What does this mean and how did it come to this?

This should help.

What is the current status of the EPRU?

Technically, it’s still Saru that runs the union with executive council member Monde Tabata serving as administrator.

The union will only run independently once new officers have been elected at a general meeting.

A call for nominations is expected later this week.

Will Cheeky Watson stand for re-election again?

No.

He tendered his resignation on Tuesday.

The father of former Springbok flanker Luke is one of the main reasons why the EPRU are in this mess.

How did the EPRU become bankrupt?

It’s actually quite simple – years of poor financial management.

The union actually never really had a solid foundation to work with after Saru confirmed in 2012 that the Kings would play in the following year’s Super Rugby tournament.

It’s alleged by the Nelson Mandela Bay Ratepayers Association that the metro council gave R120 million of ratepayers’ money to fund operations over four years.

The problem is that doesn’t count as investment, merely funds that fill gaps.

Who requested the liquidation order?

It was the players themselves.

The group of 36 individuals split into two groups and with the help of My Players, the official player’s association, they got legal representation.

They argued the union owed more than R20 million in salaries and numerous players were left destitute.

It got so bad that the players had to accept food vouchers at one stage.

Wasn’t there talk of Watson getting a sponsor?

He alleged that an investment of R200 million was in the pipeline.

Exactly why an outside party would commit to the biggest sponsorship in South Africa’s rugby history with such a dysfunctional union is a mystery.

It turned out to be a doomed plea for more time.

But the mysterious investor rumours didn’t stop there?

Funnily enough, no.

Before the EPRU was liquidated, they first applied for business rescue.

In its application, the union stated the UK-based Integrated Sport would invest R80 million over four years.

It turned out the company was run by a bankrupt businessman, Chris Wishlade, who also didn’t bother to actually register the company.

The liquidation order was granted after that.

How are EP and the Kings actually still playing?

EP managed to play in last year’s Currie Cup on the back of a R6 million bail-out from the metro municipality.

Saru controls the Southern Kings Super Rugby franchise.

They are forced to do so because they are legally obliged to ensure the Kings play in the tournament – it’s part of the competition agreement.

Saru could be sued by various parties if they didn’t.

Is the liquidation ongoing?

Yes, Saru says it will run parallel with the establishment of a new administration.

How will EPRU be financially viable?

Saru in December passed a change to its constitution allowing unions to have private equity partners that own 74% of the union.

It is hoped that proper private investment could save the EPRU.

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