Government believes it has a case against Majola

Gerald Majola is said to be studying the Nicholson Inquiry's report. Photo: CSA website

By Nthambeleni Gabara

Pretoria – The ministerial committee of inquiry into the financial affairs of Cricket South Africa (CSA) says there is a prima facie case that CSA boss Gerald Majola contravened the Companies Act by failing to disclose payment of his bonuses.

The chairperson of the committee, Judge Christopher Nicholson, briefed reporters in Pretoria on Friday about their investigations that had to encompass whether the bonus payments were made in contravention of any law in general and the Companies Act in particular.

“The committee is of the view that there is a prima facie case that Majola contravened Sections 234, 235 and 236 of the Companies Act in that he had failed to disclose the said bonuses appropriated to him, chief financial officer, Don McIntosh and other senior members of staff,” he said.

The committee was set up by Sports Minister Fikile Mbalula following complaints that the internal hearing and forensic audit by accounting firm KPMG had failed to yield results relating to the bonuses paid to Majola and other staff members.

As a result of a political election in India and unrest in Pakistan in 2009, two cricket tournaments were staged by CSA in South Africa.

These were the IPL, held from 18 April 2009 to 24 May 2009, and the Champions Trophy, held from 24 September 2009 to 5 October 2009.

The committee was required to investigate and report on possible maladministration in the CSA in relation to the payment of bonuses to officials in respect of the IPL and Champions Trophy as well as the circumstances surrounding those payments.

According to the ministerial committee, Majola concluded and signed on behalf of CSA Heads of Agreement with the Board of Control for Cricket in India (BCCI) for staging of the IPL tournament.

“It appears only Majola was a party to the review and conclusion of this contract on behalf of CSA even though the initial agreement made no provision for payment of bonuses, it transpired that Majola had surreptitiously negotiated the payment of bonuses with the IPL in a meeting in London during June of 2009.

“These were paid with the monthly payroll run of CSA on 22 July 2009 and the relevant employee’s taxes were deducted,” he said.

Nicholson said Majola then advised CSA President Dr Mthuthuzeli Nyoka that he had negotiated with the IPL bonuses for his staff and that the IPL had indeed paid bonuses to his staff.

However, the retired judge said Majola failed to inform Nyoka of his own negotiated bonus, as arranged with the IPL and also refrained from providing Nyoka and members of the Remuneration Committee (Remco) with the Schedule of Payments relating to the IPL agreement misleading Nyoka in the process.

Nicholson said Dr Nyoka became aware of the true facts of the bonuses when an independent internal auditor, reported that a pool bonus of R2 732 172 had been received for the IPL tournament; and an amount of R1 131 062 had been paid to Majola and R797 999 to Don McIntosh, the Chief Operating Officer as bonuses.

“Majola freely conceded that he had not complied with the provisions of Sections 234 of the Companies Act in not disclosing the bonus, but pleaded ignorance of them.

“His broad denial was contradicted by the extensive evidence of his corporate experience, including the fact that he is a director of seven other companies.

“He also advocated good corporate governance in terms of King 1 and 2 on a number of occasions, which should have exposed him adequately to the essence of the said provisions.

“Before the committee, Majola conceded to a general knowledge of the duty to disclose. Majola gave evidence that it was McIntosh, the chief operating officer, who determined the bonuses and drafted a schedule of them on his computer.

“He did so because he was a quasi-tournament director and therefore senior to Majola with regard to the bonuses.

“McIntosh, on the other hand, maintained that Majola determined the bonuses and that McIntosh merely generated a schedule of them, on the instructions of Majola. The latter signed the schedule and the payments were made on 22 July 2009.

“As a result of Majola’s deliberate concealment of the IPL bonuses, “normal” company bonuses were paid with the approval of Remco of CSA to Majola and staff in May 2009 and in May 2010.

“Had Remco been aware of the IPL bonuses that had been paid to Majola and CSA staff, the said normal bonuses would not have been considered, alternatively they would have been greatly reduced by Remco,” he said.

The committee addressed two broad issues firstly the payment of bonuses and secondly any structural defects in the administration of CSA.

It was tasked to provide recommendations to the minister as to how to address any problems they have identified. – BuaNews