Minister of Sport and Recreation South Africa, the Hounorable Mr Fikile April Mbalula's press statement in the backdrop of the report of the Minister's Committee of inquiry into the affairs of Cricket South Africa (CSA)

16 Mar 2012

The Director-General of Sport and Recreation South Africa; Mr Alec Moemi
Ladies and gentlemen of the media
Fellow South Africans and sports-loving people

Things being equal today would have been an ideal day for all of us to be following the Super 15 Rugby, the build up to the derby between Kaizer Chiefs and Pirates, the cricket test between South Africa and New Zealand from our television screens in the comfort of our own living rooms or from the grand stands of our magnificent stadiums. 

However circumstances beyond our control have conspired and dictated that we converge here this morning to set up a remedy for the cancer diagnosed by the Ministerial Committee of enquiry into the affairs of Cricket South Africa. These circumstances are a constant reminder that there can be no normal sport under abnormal circumstances.

We converge here imbued by a deep sense of patriotism and inspired by our undying love of the game. We are Mindful of our duty and responsibility to discharge our historical mission for the all-round transformation, development and unity of purpose within sport and recreation in South Africa. As we have stated on numerous occasions that our primary duty is, among others, to promote transparency and good corporate governance in sport. When these principles are violated and not upheld by federations, by a confederation, by a government, by any organ or individual in the republic of South Africa, the law must take its course. 

We are all equal before the law. It does not matter whether you are a Minister, a Chief Executive Officer, a President, a member of the royal family or a commoner. We are all subject to the same law. Institutions and offices enjoined and directed by the law to carry out certain responsibilities must not shy away from their responsibility by looking away when allegations of corruption and deviation from the law are made. Sticking our heads in the sand like ostriches when we are called upon to act is tantamount to cowardice, dereliction of duty and most importantly acting as such will be presiding over a failed state and moribund institutions.

The genesis of the problems currently bedevilling Cricket South Africa can be traced back to 15 April 2009, when Cabinet was approached by CSA to support the hosting of the Indian Premier League in South Africa due to the instability in India and some of the Indian Islands at the time. The Cabinet approval was obtained after Cricket South Africa's decision to step in when Pakistan and Sri-Lanka were unable to host the 2009 Championship Trophy.

This approval was in keeping with South Africa's provisions of the Constitution that enjoins South Africa to promote friendly relations with the international community. As we all will remember, we had a highly successful Indian Premier League Tournament from 18 April to 24 May 2009. This event had major economic spin-offs for the country. The International Cricket Council (ICC) and Cricket South Africa were rightfully commended for a job well done.

However, you will also recall that in the aftermaths of the Indian Premier League (IPL) Tournament in our shores, there has been a torrent of serious allegations and an avalanche of counter allegations about bonuses which were irregularly allocated to the Chief Executive Officer (CEO), Mr Gerald Majola, the then Chief Financial Officer, Mr McIntosh and the rest of the senior Cricket South Africa staff.

These allegations were first brought to my attention as the Minister of Sport and Recreation by my predecessor Dr. Reverend Makhenkesi Arnold Stofile as he was exiting the Ministry. The allegations were further amplified by a dossier submitted to me and the Deputy Minister of Sport and Recreation, Mr Gert Oosthuizen by the then President of Cricket South Africa Dr. Mthuthuzeli Nyoka. Reports from Cricket South Africa on what has become known as the Khan Commission were submitted to my office to inform me of their findings and recommendations.

The South African Sport Confederation and Olympic Committee (SASCOC) reported on the matter at the numerous meetings and engagements we had. Ex-cricket administrators, individuals, civil society and companies responsible for sponsoring cricket also made representations and requested the Ministry to intervene with a view to resolve this protracted imbroglio.

Fellow South Africans and ladies and gentlemen of the media, cognisant of the enormous challenges confronting cricket, on and off the field, I threw the main units of the Ministry and the department behind efforts to resolve the impasse as speedily as possible. I personally spent many hours in meetings with Mr Majola and Dr. Nyoka at various stages appealing for unity and the resolution of this conundrum for the sake of the game. 

I have on a number of occasions attended Cricket South Africa Board meetings were I repeatedly appealed for the Board to attend to the allegations and simmering leadership crisis. Officials from the Ministry and Department spent inordinate hours in meetings with Cricket South Africa, with Dr. Nyoka and Mr Majola to carry the mandate of finding a resolution to the unhealthy and vitriolic leadership contestation, barrage of allegations and counter allegations of corruption. So determined the Ministry was to find a resolution to the extent that the South African Sport Confederation and Olympic Committee received a formal request from the Ministry to mediate between the opposing forces.

In this regard we need to underscore the fact of the involvement and impartiality of South African Sports Confederation and Olympic Committee (SASCOC) during the mediation was brought into serious question. The former President of CSA, Dr. Nyoka believed that some CSA Board Members would not act impartially due to their membership of SASCOC Board and/or association with SASCOC. On our part we allowed SASCOC to play its role in the resolution of the impasse in this regard. 

In spite of all the interventions we had made the problems persisted unremittingly. In the midst of this we were approached by civil society organisation who were planning to boycott cricket games if the corruption allegations made were left unattended. We had to contend with appeals from current and prospective sponsors who were threatening to withdraw sponsorship as they stated they cannot continue to fund a body beset by allegations of corruption, unhealthy leadership battles, vitriol and venom spilling over into the media and public domain. 

We appealed to business and civil society not to turn their backs on cricket as this will not only hurt brand cricket, but the withdrawal of funding would hurt the players so deeply. The question was, who will then put a stop to this ugly spat, allegations and counter allegations, bruising court battles, threats to people lives and police cases opened? After a lengthy process of reflection and agonising on the course of action to be taken in order to lay the ghost of the Cricket SA saga to rest, a decision had to be made. 

At a point when I was ‘suffering from consultation fatigue'- for I had to consult the President, the Ministers of Justice and Constitutional Development, of Finance and other Cabinet colleagues, we decided on how to proceed.

On 4 November 2011, we announced the appointment of a Ministerial Committee of enquiry to conduct an investigation into the affairs of Cricket South Africa ("CSA"). The Committee was chaired by Mr Justice Robert Chris Nicholson, and with him Mr Freeman Nomvalo, the Accountant-General of the Republic and Ms Zolisa Zwakala, the Chief Director: Internal Audit Support in the National Treasury.

The Committee was appointed in accordance with Treasury Regulation 20 issued in terms of the PFMA, Act 1 of 1999 and section 13(5)(a) of the National Sport and Recreation Act, No 110 of 1998, as amended ("the Act"). The Treasury Regulation deals solely with the remuneration of Committees of Enquiry, and the Act refers to intervention by the Minister in a dispute where such a dispute is likely to bring a sport into disrepute.

1. The terms of reference of the committee were as follows:

• To investigate and report on the reasons for the failure of Cricket South Africa (CSA) to adhere to certain recommendations of KPMG and legal counsel,
• To investigate and report on maladministration in CSA in relation to payment of bonuses to officials in respect of the IPL,
• Whether the said bonus payments were made in contravention of any law, in general, and the Companies Act in particular, and, non-compliance with legal requirements or the KPMG report,
• To investigate and report on any irregularities discovered during KPMG's investigation,
• to analyse any documents relating to its terms of reference and to do the necessary interrogations on the basis thereof,
• To enquire into, and assess and report on the effectiveness and efficiency of the current administration of CSA, and in particular identify all aspects of the current administrative system which allows for and encourages undesirable or illegal practices,
• Enquire into and report on the degree of compliance by CSA and its staff with applicable laws,
• Recommend ways to eliminate deficiencies identified, and
• To recommend systems, practices and procedures to improve the administration of CSA.

2. The committee delivered its report, and advised the Minister as follows:

• the CSA Board failed to take appropriate action in relation to the KPMG report and senior counsel opinions
• that there is a prima facie case that Mr Majola contravened sections 234, 235 and 236 of the Companies Act in that he failed to disclose the said bonuses appropriated to him, and the CFO and other senior members of staff
• the alleged transgression should be referred to a disciplinary enquiry so that there is compliance with labour legislation, and that pending the referral to a disciplinary enquiry, CSA should recommend the immediate suspension with pay of Majola
• the CSA should appoint an acting CEO pending the outcome of the disciplinary inquiry, and
• the CSA Board must ensure that the reputation of CSA is not further endangered by disregarding the recommendations.

We welcome the report and stand by its findings and recommendations and expect full implementation of the recommendations.

In its report, which I believe was made available to media and public and is also available on the Department of Sport and Recreation SA website, the Committee made recommendations about findings that must be investigated by the National Director of Prosecutions and the South African Receiver of Revenue. 

The committee make specific recommendations about how CSA must recover the bonus pay outs and irregular travel expenses for families. The Committee made ground-breaking recommendations on the future governance model for CSA based on international comperative research and practice.

The committee also informed the Minister that it believes that Cricket South Africa Board failed to take appropriate action in relation to the KPMG report and senior counsel opinion. The committee went further to state that "We believe that for the reasons we have referred to Cricket South Africa was not sufficiently independent and principled to take the necessary action against Majola".

The Ministry of Sport and Recreation would like to inform all South Africans and sport-loving people of our country that we have now come to a watershed moment in the normalisation of the upheaval in cricket. The findings and recommendations of the Committee corroborate findings and recommendations that were made by KPMG and by two senior counsels. That being the case the Board of Cricket South, if it has any moral compass and understands its fiduciary duties, must in its meeting tomorrow do the right thing as Judge Nicholson advised.

The Board must conduct an open and brutally frank introspection about its role in the deepening crisis within cricket and ask themselves the question whether after so many blunders, they would be able to command the respect of all people within the sector and the respect of all South Africans over and above? Is it not time for the Board make way for a new leadership that will take Cricket South Africa to new era of hope and clean governance?

The Board must take immediate steps to translate the recommendations into action and their meeting tomorrow will be a litmus test of the extent to which the Board put the interest of Cricket above their own individual interest. The Board must tomorrow send a clear message to the country that they are man and women of honour by leaving no stone unturned in the process of disciplining wayward staff members. 

No more time for cover-ups! That time is over and to prove this that this is not a threat, if the Board fails to implement the recommendations of the committee, the Government and the people of South Africa will show them how it should be done and how it should be done in the interest of sport and cricket in particular in our country.

We want a blow by blow account on the implementation of each single recommendation and that for whatever reason the Board find that they cannot implement a certain recommendation, I need to know why? South Africa needs to know? Who? Why? And What are we protecting. Is it the country? The athletes? Is it individuals. If it an individual or individuals our immediate response is no. If it is cricket and the country we will work with you and support you to get popular support, international recognition and sponsorship.

I have now handed a copy of the report to both the Board of CSA and to the Board of SASCOC. I have given the Board of CSA up until 9 April 2012 to apply its mind on the findings and recommendations of the Committee of Enquiry. We have indicated that they should inform the Minister by this date on how they will proceed in the light of the findings and the recommendations.

We thank Justice Nicholson, Mr Nomvalo and Ms Zwakala for the sterling work they have done to the sports fraternity and to the Republic. We are encouraged that they have worked diligently and independently in the execution of their mandate.

Thank you.

Issued by Sport and Recreation South Africa, March 16 2012

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