REVEALED | The list of events that led to the Valke’s rugby players being hung out to dry
A confluence of factors led to the Valke’s rugby players being hung out to dry.
The professional arm of the union applied for voluntary liquidation after failing to meet their financial obligations to the players‚ staff‚ their creditors‚ as well as the South African Revenue Services (Sars).
The advent of the Covid-19 pandemic helped dry up an already limited revenue stream‚ while financial mismanagement is also reportedly a contributing factor in their demise.
The writing was on the wall once the pandemic put paid to their participation in the Malaysia based Global Rapid Rugby‚ while the Currie Cup First Division’s cancellation further stacked the odds against the embattled company.
An insider who is familiar with the developments that led to their provisional liquidation explained the company had a fraught relationship with Sars.
“They had an existing cash flow problem. If you are not servicing that debt as regularly as you should with Sars‚ you are starting to skate on thin ice‚” said the source.
Their non participation in the Malaysia tournament exacerbated matters.
“If they were able to play Global Rapid Rugby they would have been able to plug a few gaps.
"That didn’t come off and now they are in trouble. The Global Rapid Rugby issue broke the camel’s back. The contract was for R10m but they only got R3m‚ so with a shortfall of R7m they were in trouble.”
Having filed for provisional liquidation means the matter is far from settled.
“When it comes to paying who is owed Sars is right in front‚” said the insider.
“Usually the employees are next in line to be paid. All the stakeholders have to be informed that the company has applied for liquidation. In that they have to disclose a lot of information.”
As for the players‚ some have already taken flight.
“Some players have moved on after requesting to be released from their contracts and they are left with around 25 players.
"At the end of August more players come off that list and the remainder at the end of September. The have fixed term contracts.
“In that sense the liability to the players is less than that of the staff who number 12. That includes the finance people‚ the coach‚ the physio‚ the team manager and so on.
“The harsh reality is the players and the employees are in a very difficult position.”