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Court interdict halts public protector probe into horse-racing industry

Public protector Busisiwe Mkhwebane.
Public protector Busisiwe Mkhwebane.
Image: SANDILE NDLOVUIphotory

The public protector has postponed hearings into the horse-racing industry in Gauteng indefinitely after one of the interested parties obtained a court interdict.

“Phumelela Gaming and Leisure (PTY) Limited‚ obtained an interdict from the North Gauteng High Court in Pretoria on Monday afternoon to have the hearings postponed until further notice‚” public protector spokesperson Oupa Segalwe said on Monday evening.

Public Protector Busisiwe Mkhwebane said she had noted the court order.

“We have noted the court order. What is important is that the investigation itself has not been interdicted. Therefore normal investigative processes will continue. This means we will still hear from witnesses but not out in the open as it would have been the case with the public hearings‚” she said.

Phumelela approached the high court in Pretoria on Friday to stop the hearings which would have started on Tuesday.

It would have formed part of an investigation into alleged maladministration and improper conduct relating to a memorandum of understanding (MoU) between the Gauteng Provincial Government and the Gauteng horseracing industry‚ concluded 21 years ago. It led to the transfer of certain racecourses to Phumelela Gaming and Leisure.

What is important is that the investigation itself has not been interdicted

“The MoU sought to re-organise and restructure the industry into a single corporate structure‚ reduce the involvement of the [provincial government] in the sport and make the sport economically viable‚” Segalwe said in an earlier statement.

“Following the conclusion of the MoU and the dissolution of the Horseracing Development Fund‚ Phumelela was formed and listed on the JSE.”

The office of the public protector received complaints about the industry in the province in 2012 and 2013.

Phindi Kema alleged that the conclusion of the MoU was improper and constituted maladministration because it did not follow a parliamentary consultation process. She said this had led to a monopoly of the industry in favour of Phumelela and Gold Circle.

Kema alleged that‚ as a result‚ horseracing clubs in Gauteng and other provinces “handed over” racecourses to Phumelela for free‚ some of which were later sold for profit.

South African Grooms Association president Chophelikhaya Simoto alleged that during negotiations that to corporatise the industry‚ it was agreed that the Horseracing Development Fund would pay R17.5m to Phumelela for the benefit of grooms. He said Phumelela did not pay the money to the grooms.

Former Gauteng Gambling Board employee Hanif Manjoo alleged in 2013 that the provincial government “disregarded the legislative prescripts regulating the disposal of the government’s assets” when it was transforming and corporatising the industry.

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