Sport

Analysis: What the audit report reveals about Majola and Cricket SA

By Khadija Patel 4 August 2011

Sascoc has advised Cricket South Africa to appoint an independent person to suggest the best way forward for the cricketing body after a forensic audit revealed there had been some business going on behind the scenes that was just not, well, cricket. By KHADIJA PATEL.

The report  by KPMG found there had possibly been irregular conduct in CSA with respect to the Companies Act and the fiduciary duties of directors. It is a mouthful of legalese, but what the report really does is vindicate CSA president Mtutuzeli Nyoka. Earlier this year, Nyoka accused his CEO, Gerald Majola, of lying to him about bonuses paid to CSA staff.  Majola reacted in an angry huff and Nyoka subsequently received a vote of no confidence from the CSA board.

An overwhelming majority of the 11 affiliate presidents on the CSA board supported a motion of no-confidence in Nyoka and it would only take the South Gauteng high court to order  CSA to reinstate Nyoka after finding that the decision to remove him from his post was unlawful. The department of sports and recreation is happy to allow due process to take its course at Cricket SA confident the right decisions will be made. However, what remains to be answered is how Majola was able to receive these golden handshakes with such complacency.

The audit report indicates Majola withheld information after receiving bonus payments for hosting the 2009 Indian Premier League and the ICC Champions Trophy tournaments. This had been done despite receiving bonuses from CSA for the same work. Between May 2009 and May 2010, Majola received four bonuses totalling R4,150,387. Two of these bonuses were not declared to the appropriate CSA sub-committees.

The Board of Control for Cricket in India (BCCI), acting on behalf of the IPL, confirmed to KPMG that Majola had indeed negotiated the bonuses on behalf of CSA subsequent to the tournament. A massive 70% of the IPL bonuses paid by CSA to its staff was paid to Majola and IPL Tournament director Don McIntosh. These bonuses were paid from CSA funds at a time when the BCCI owed CSA more than R25 million. Majola, it would seem, was in an almighty hurry to get his bonus and was unable to explain to the auditors why exactly the bonuses had been paid with CSA funds. The BCCI insists it had nothing to do with how the bonuses were allocated. McIntosh told the auditors bonuses were calculated on the strength of “the extent of the involvement” of an individual in the IPL tournament hosted in South Africa. The auditors found “Majola and McIntosh worked hand-in-hand and jointly calculated, determined and authorised the IPL bonuses without deferring to any other CSA official or body. They consequently determined and calculated their own bonuses.”

To what does Majola ultimately direct his loyalty, his own bottom line or the greater good of cricket in South Africa? The audit report says this about Majola’s divided loyalties: “It can be stated that a director has the duty to act at all time in a bona fide manner for the benefit of the company. A director would be in breach of his duty if he acts in a manner that benefits him.”  The report further finds that the “conduct of Majola offends the terms of a director’s fiduciary duty” and recommends that “CSA obtains legal action relating to the possible contravention of a  director’s fiduciary duties, to advise whether such breach would constitute undue enrichment on the part of Majola to the detriment of CSA and whether this requires further action”.

Jo’burgers may remember how the Wanderers was punished with a lack of international fixtures for a short while after the Gauteng Cricket Board had sulked about how their suite holders were remunerated by the IPL. The GCB contended that Majola was on the pay roll of the IPL and was looking out for their interests and not of South Africa. When Majola was questioned about the allegations, he vehemently denied receiving a “commission” from the IPL, but failed to disclose as well that he had received a handsome bonus from the Indian cricket league.

To the applause of his minders at CSA, Majola did reveal he had negotiated bonuses for “his staff”, but at no point did he reveal his bonus.

Sports minister Fikile Mbalula has shown some understanding of the gravity of the report by choosing to reserve comment until CSA reports to him. The future of CSA remains tenuous and international tournaments will deservedly be subjected to much more scrutiny. It appears Cricket South Africa has been a cash cow well milked by Majola. DM

 


 

Read more:

  • Majola ‘disappointed’ in media in Sport24;
  • Time for CSA to straighten up in IOL Sport;
  • SASCOC lends CSA a hand in Sport24;
  • Gerald Majola ‘lied’ – audit in Sport24;

Photo: Cricket South Africa (CSA) CEO Gerald Majola (L) and Gary Kirsten (R) arrive for a news conference in Johannesburg, June 6, 2011. REUTERS/Siphiwe Sibeko.

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