SA Rugby puts Southern Kings into voluntary liquidation
At a time when SA Rugby is mourning the massive loss of Monde Tabata – a man who has done more than most to try to salvage the Southern Kings – the company has been placed into involuntary liquidation.
Respected SA Rugby board member Tabata died this week due to Covid-19 related complications.
The Southern Kings have generally been in a sea of financial trouble since their inception, but when the Greatest Rugby Company in the Whole Wide World (GRC) acquired a 74 percent stake in the franchise, it seemed like it had turned a new corner.
It wasn’t to be as financial issues dogged the franchise and these came to a head during the Covid-19 lockdown period where financial commitments were not met timeously.
With an accumulated debt of R55m and no prospects of income for the rest of the year, SA Rugby and the Eastern Province Rugby Union had to come to the hard decision of liquidating the Southern Kings.
EPRU board chairman Andre Rademan said the franchise had hit the wall financially and there was no way out.
SA Rugby had resumed control of the franchise in June after the GRC was unable to meet its financial obligations. The Kings had already withdrawn from domestic rugby for the rest of the year with a view to save money, but Rademan said the players have been informed of the decision.
The liquidation of the Southern Kings company means the Eastern Cape, the hotbed of black African rugby, is again left without a Super Rugby or Pro14 franchise.
“The hard fact is that the Kings are insolvent, with significant debts and zero assets and it would have been reckless of the board to continue to trade,” Rademan said.
“It’s continuation would have required loans from the EPRU and loans additional to the R45m that the company already owes to SA Rugby.
“In the absence of any rugby in 2020, and without any guarantees as to income prospects for 2021, it would have been financially irresponsible of the shareholders to have pumped in further funding.”
SA Rugby president Mark Alexander said the Kings are a necessity in SA Rugby and serve a massive developmental purpose, but their financial issues can’t be wished away.
“The history of the Kings has been one of expectation and anticipation but unfortunately the parallel story of commercial failure couldn’t be wished away any longer. The debts the organisation has accumulated over the years are considerable and in the current environment the only certainty was that they would grow,” Alexander said.