Thabang Moroe, Cricket South Africa’s former CEO, was found to have breached the Companies’ Act several times, bringing the organisation into disrepute and failing to act in its best interests, according to a forensic report, the summary of which was made public on Monday morning. The report also listed incidents in which CSA’s acting president Beresford Williams, the entire CSA board and former independent board member Iqbal Khan were in contravention of the Act.
The full report remains under restricted access with CSA’s lawyers, Bowman’s, and anyone who wants to view is required to sign a non-disclosure agreement (NDA). That includes members of the South African Sports Confederation and Olympic Committee (SASCOC), the umbrella body under which all sports federations in the country operate. SASCOC has demanded to see the full report and that CSA’s board and executive step aside while it conducts an investigation into CSA’s administrative and legal affairs. CSA’s refusal to grant SASCOC’s requests had them referred to the country’s sports’ ministry last week and could still result in further action.
Sports minister Nathi Mthethwa met with CSA last week and gave them until Tuesday to comply with SASCOC. CSA is also scheduled to appear before the parliamentary portfolio committee for sport, art and culture tomorrow, and the forensic report is expected to be among the main topics of discussion.
Moroe was also found to have not kept CSA’s board informed of developments at the Western Province and North West unions, the two affiliates with which CSA exercised step-in rights, including the dissolution of the provincial boards. In the Western Province case, Williams and Khan were both found to have had a conflict of interest by being present at a meeting in which CSA approved a loan to Western Province, thereby contravening the Companies’ Act.
The most serious findings against Moroe relate to finances. He used his CSA credit card for irregular purchases of alcohol to the value of R64,830.50 (USD 3,952 approx), and acquired the services of a company (listed only as Service Provider X) for R3,019,244.82 (USD 183,068 approx) without following procurement procedures. The report also found that no service from that company was delivered to CSA, and oversaw a commercial deal with Global Sports Commerce (GSC) for the MSL, which resulted in major financial losses for CSA. While no details are available in the summary of the report about Service Provider X or the kind of service it was due to provide to CSA, more is known about GSC.
The company is headquartered in Singapore and has offices in Johannesburg and it is the official broadcast and commercial partner for the MSL, which means that it was part of GSC’s job to on-sell television rights for the MSL. A due diligence report was not presented to CSA’s board on GSC, and Moroe and former chief operating officer Naasei Appiah (who has been dismissed and is appealing) had also failed to obtain a bank guarantee from GSC. CSA’s board approved the agreement with GSC without the due diligence report and has been found to be in breach of their fiduciary duties while the agreement with GSC led to losses of R12,370,691 (USD 754,135 approx) over the 2019 MSL season. Moroe was found to have failed to “act with the degree of care, skill and diligence that may be reasonably expected of a person carrying out,” his function (that of CEO) in relation to the deal. CSA also entered into a production agreement with GSC, which was initially only for the inaugural edition of the MSL but was renewed for four more years.
The process of securing that deal was also improperly conducted, according to the report, thereby adding to Moroe’s contraventions.
CSA has not been able to “investigate, corroborate or clarify in its totality” the report as yet, according to a statement by John Mogodi, a non-independent director on CSA’s board. “While we are not claiming the report to be inaccurate, it is important to understand that the forensic analysis is a single-sided report, and not all of the individuals or parties mentioned, have had the opportunity to provide responses to the findings as yet,” Mogodi’s statement read. That indicates CSA may yet conduct further enquiries before acting on the report.
However, CSA decided to release the summary of the report following weeks of pressure. The board said of its decision to release the summary of the report: “[Following] requests from the Ministry of Sports, Art and Culture, South African Sports Confederation and Olympic Committee (SASCOC), members of the media, and concerns from sponsors and employees about the contents of the Fundudzi Forensic Report, CSA has, with legal counsel, decided to make a summary forensic report available to all stakeholders, including cricket-loving members of the public, via the media and other distribution channels.”