Phumelela to challenge 'unfair and biased' Public Protector report in court

Public Protector Busisiwe Mkhwebane.
Public Protector Busisiwe Mkhwebane.

Phumelela Gaming and Leisure is to challenge the Public Protector's report on her probe into the corporatisation of the horseracing industry in Gauteng, saying her findings have caused it to suffer reputational harm.

In a statement released on Friday, Phumelela said it was disputing the findings by Advocate Busisiwe Mkhwebane, which it claimed were unfair and biased, and would seek to have the report reviewed and set aside in the high court.

“These observations and findings have caused Phumelela to suffer reputational harm. It is pertinent to note that the Public Protector refused, prior to issuing her final report, to give Phumelela access to the evidence upon which her findings were based or to afford Phumelela the opportunity to question witnesses who gave evidence. Phumelela has been advised that this constitutes a breach of the provisions of the Public Protector Act,” Phumelela spokesperson Colleen Goodman said.

She said Phumelela’s legal advisers had recommended that the company apply to the high court to have the Public Protector’s report reviewed and set aside as “she acted in a manner which is unconstitutional, contrary to the principle of legality and outside of her powers”.

“She acted in a procedurally unfair, biased and capricious manner,” said Goodman.

In a report, titled 'Corporatisation of thoroughbred horseracing in Gauteng ', that was officially released last month, Mkhwebane said Phumelela had tried to stop her office from releasing the report.   

“Phumelela were hell-bent frustrating investigators and interdicting them not to investigate these allegations.  They’ve asked the Public Protector not to release the report - they have been throughout the investigation of this matter hell-bent on frustrating it by asking that I do not release the report without them having questioned and cross-examined the witnesses who assisted in the investigation,” said Mkhwebane in the report.

Phumelela, which controls horseracing in seven of the country’s nine provinces, has been the beneficiary of a memorandum of understanding (MoU) between the Gauteng Economic Development department and the Gauteng Horse Racing Industry. The MoU, signed in 1997, was to re-organise and restructure the business of the racing industry “into a single corporate structure which will be listed on the Johannesburg Stock Exchange”.

As a result of this MoU, according to Mkhwebane, Phumelela has received R711m from the Gauteng Gambling Board since its formation more than 20 years ago.

Goodman said it had been widely reported that the Public Protector had released a report into allegations of maladministration and improper conduct in connection with the corporatisation of the South African thoroughbred horseracing industry.

“The report sets out the findings of the Public Protector in respect of four issues relating to the corporatisation process and despite the fact that the Public Protector concluded that three of the four issues investigated by her were unsubstantiated, she directed President Cyril Ramaphosa, the premiers of all provinces, the minister of sport, the minister of trade and industry and the Gauteng Gambling Board to take wide-ranging remedial action, the majority of which is entirely unrelated to either her findings or to the only substantiated complaint,” said Goodman.

She said while “purportedly” acting as mediator, the Public Protector had proposed, in writing, that Phumelela make a payment of R10m to one of the complainants for “pain, suffering and public humiliation” and for “relinquishing her plans and interests” in respect of the Arlington Racecourse, which is owned by Phumelela. 

“Phumelela rejected this proposal because no legal justification exists for such a payment. The Public Protector stated that the rejection of a payment that, to her knowledge, had no basis in law was 'regrettable'. It is also noteworthy that none of this complainant’s complaints were substantiated.”

Goodman added that despite the Public Protector convening public hearings to hear further evidence, it had never invited Phumelela to the hearings. “Phumelela was compelled to approach the high court for an urgent order postponing the hearings, in order to afford it an opportunity to test the evidence and to make submissions in respect thereof. The Public Protector has constantly misconstrued the high court’s order as an interdict when it merely postponed the hearings.”

Phumelela said it had cooperated with the Public Protector’s investigation since it commenced in 2013 and had submitted large volumes of documents and information to her office. “The Public Protector appears to have disregarded most of this relevant information in coming to her conclusions. In addition, she has accused Phumelela of constantly frustrating her investigation. Phumelela denies this.”

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