Cricket the latest victim of South African malaise

South African cricket is in a crisis due to a malaise that is fast becoming a national pandemic – euphemistically called poor corporate governance which, in many cases, has opened the door for corruptive measures, tender malpractices and other abuses that are undermining economic growth and which point to a lack of moral fibre in South African society.

Last week, Cricket South Africa (CSA) set up an independent review committee to investigate the unauthorised payment of R4.7 million ($641 000) in performance bonuses to 40 CSA employees following the 2009 Indian Premier League (IPL) tournament and International Cricket Council Champions trophy. The committee will be headed by former South Africa Chief Justice Pius Langa and assisted by forensic auditors from KPMG and Deloitte.

According to CSA, the bonuses include R1.77m ($241 000) paid to chief executive officer Gerald Majola and R1.45m ($198 000) paid to former chief operating officer Don McIntosh, with the balance being divided between the remaining employees.

In the wake of the announcement, Majola has decided to repay the total bonus paid to him until the investigation is complete. McIntosh, who resigned from CSA last month, told the Times that his resignation had nothing to do with the bonus.

The decision to probe the bonuses arose after the CSA remuneration committee indicated it had not authorised the payments. "As a result, the board of CSA, at a board meeting on 4 and 11 August, resolved to subject the entire matter to a comprehensive review by an independent committee," CSA said in a statement.

A written report on the matter has already been sent to Minister of Sport and Recreation Makhenkesi Stofile, and the committee will submit its own report to the CSA board once the investigation is complete. The committee is expected to begin its review in mid-September. CSA's final accounts for the year, which are to be adopted officially on 21 August, will accordingly reflect the investigation. (Source: www.cricket.co.za).

The 2009 IPL was moved to South Africa at the last minute due to security concerns in India. The hosting of the tournament resulted in a dispute between the IPL and the Gauteng Cricket Board (GCB), which manages the Wanderers Stadium in Johannesburg.

After the tournament ended, the GCB levelled allegations of mismanagement against Majola, the Board of Control for Cricket in India and the league. CSA responded by stripping the Wanderers of its international status. (Additional sources: www.cricinfo.co.za; www.cricket.co.za).

What is worrying here, is why CSA failed to inform the remuneration committee about it, and why the board of CSA wanted to pay Majola a bonus almost eight times his salary, and then finding out he already received a bonus of R1.77m from the IPL.

Another disturbing factor is that CSA wants to host a annual general meeting in private, with the media not invited to attend this, which seems a bizarre turn of events and something that would infuriate many of the members of CSA.

Perhaps the officials of CSA should cast their memory back 10 years, when Hansie Cronjé said at the public hearing in front of the King commission that he had decided to co-operate with bookmakers because it was “money for jam”.

The early indications are that Majola will survive this crisis because it is deemed a corporate governance slip-up, not a corruptive misdemeanour.

But the question remains: What message are the sponsors receiving? How sure will Standard Bank, MTN and SuperSport be that their investment in the development of future international stars is in good hands, and not being mismanaged due to sloppy and incompetent corporate governance actions?

CSA will have to act decisively to instil confidence in the minds of the sponsors and the player establishment, as well as in the hearts of the major stakeholders in South African cricket – the fans.