Remgro Sport Investments has given the Western Province Rugby Football Union (WPRFU) until July 6 to make arrangements to pay back loans of nearly R44-million — if South Africa's oldest union is unable to do so the Stellenbosch-based company will immediately call in the multimillion rand loans.
But the WPRFU has told its member clubs that all is well.
The company, a division of Johann Rupert's diversified investment company Remgro, rescued the country's oldest rugby union in 2016 when it faced imminent collapse after an investment deal went awry. The WPRFU has since made numerous promises to Remgro to repay the money it was lent, but has seemingly not kept them. The loans were used to pay staff and players.
Now Remgro has had enough of the WPRFU and it leadership kicking for touch, and has sent a strongly worded letter of demand to the union setting out four requirements that have to be met within the next few weeks. In the letter, Remgro says it "kindly" attempted to reach an agreement with the WPRFU "in the spirit of collaboration" and has been accommodating of the union's troubles "for the past 18 months".
If the WPRFU does not submit to Remgro's demands, the company says it will use "each and every legal remedy at its disposal without further notice to the union" to recover the loan.
WP Rugby can confirm that former WP Rugby (Pty) Ltd shareholder Remgro has not recalled their loans and that WP Rugby is in regular contact with Remgro with regards to its outstanding indebtedness to Remgro...WP president Thelo Wakefield in a letter to clubs.
But in a twist, WP president Thelo Wakefield has told the WPRFU's clubs, which in effect are the union's shareholders, a different story, telling them in a circular that all is well and a report on rugby website Rugby365 that creditors are "closing in" on the union is "misleading", "factually incorrect" and "speculative". Wakefield's letter of denial was sent to clubs the day after lawyers ENSAfrica sent the letter to the union with the subject line "letter of demand".
"WP Rugby can confirm that former WP Rugby (Pty) Ltd shareholder Remgro has not recalled their loans and that WP Rugby is in regular contact with Remgro with regards to its outstanding indebtedness to Remgro ... WP Rugby strongly denies that it is facing bankruptcy, that its creditors are closing in ..." Wakefield's letter to the union's clubs reads.
But Remgro, via ENSAfrica, makes it clear that it expects security for its loans to be in place within weeks, otherwise it will recoup the money through other avenues.
It insists that the WPRFU tables its letter of demand at a meeting of the union's general council and that it agrees to a document containing a series of resolutions, which includes an agreement that mortgage bonds on a number of WPRFU properties in Cape Town be registered in favour of Remgro. The meeting and acquiescence of the WPRFU must happen by June 24, in less than two weeks' time. The bond registration documents must be signed by July 6, in four weeks' time.
ENSAfrica says the union previously agreed to register bonds in favour of Remgro and "finds the unwillingness of the union to register a mortgage bond as security for financial assistance provided by our client to the union wholly unacceptable".
Attached to the letter are two draft resolutions, which Remgro wants adopted at a meeting of the WPRFU's council, as well as a draft of the union's agreement.
According to the agreement, Remgro extended loans of R7.51-million on November 3 2016, R7.51-million on November 25 2016, R19-million on December 22 2016 and R9.88-million to the WPRFU and its subsidiaries.
Wakefield said in a written statement: "There is no comment at this time, but there will be a statement on the matter at an appropriate time. It is our policy not to discuss our domestic matters, which are still under discussion in the newspapers. Once we have finally resolved this matter, we will issue a statement."
