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Majola’s bonus may be recovered by civil action

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Old 09-03-2012, 08:18 PM   #1
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Pretoria - The Nicholson Inquiry says bonuses paid to Cricket South Africa (CSA) boss Gerald Majola and his staff members may be recovered through civil proceedings in a court of law.

Last year, Sports Minister Fikile Mbalula set up a ministerial committee chaired by retired Judge Chris Nicholson to investigate the financial affairs of CSA. The report has already been handed over to Mbalula.

Briefing reporters in Pretoria on Friday on his inquiry’s findings, Judge Nicholson said the amounts of money paid to Majola, his former chief financial officer, Don McIntosh, and other staff members may be recoverable in civil proceedings.

“The transactions that underlay these payments may be voidable at the instance of the company and those responsible may be liable to compensate the company for any loss it may have incurred.

“As McIntosh has resigned no disciplinary enquiry can be held in his case. Regard should be had to recovering the bonus paid to him by civil action in the courts.

“We also believe there is a prima facie case of non-disclosure concerning the bonuses and irregularities with regard to the travel and other costs,” he said.

Nicholson said the committee had recommended that an independent disciplinary enquiry should be appointed.

As there are provisions in Majola’s contract for suspension for 180 days pending the conclusion of the disciplinary enquiry with pay, Nicholson said the CSA Board should consider such for two reasons.

“Firstly, it would allow a pro-forma evidence leader or prosecutor free access to all the witnesses and documentation at CSA and secondly, it would be in Majola’s own interests to give him time to prepare his defence, unfettered by his normal duties,” he said.

With regard to unauthorised traveling expenses, the committee believes that Majola has been most remiss in asking CSA to pay for travel and other expenses for himself, his wife and his children, that did not relate to CSA business and they should not have been paid.

The committee is of the view that there is a prima facie case that Majola contravened the Companies Act in that he had failed to disclose the said bonuses appropriated to him, McIntosh and other senior members of staff.

“We also dealt with unauthorized travel and other expenses incurred by Majola. Clause 11 of his employment contract provides for reimbursement of his out of pocket expenses, which have been ‘approved by the Board or are incurred in accordance with principles determined by it from time to time’. However, it is clear that he should incur the expense and then justify such with vouchers.

“Majola also conceded that the travel expenses for his children were not supposed to be paid by CSA. Again, the committee is of the view that there is a prima facie case of non-disclosure and corporate abuse, with regard to the travel and other costs,” he said.

Part of the terms of reference of the committee related to investigating whether any provisions of the criminal law were breached and whether prosecutions should be instituted.

Nicholson said section 238(2) of the Companies Act provides that breach of the disclosure provisions in terms of sections 234 is an offence and section 441(1)(e) provides the penalty.

“These matters should be referred to the office of the National Director of Prosecutions for investigation. Such investigations should also include whether any provisions of the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004) have been contravened.

“Section 10 provides that any person who is a party to an employment relationship and who, directly or indirectly, accepts from any other person any unauthorised gratification including money, whether in cash or otherwise is guilty of the offence of receiving unauthorised gratification.

“This would apply to both Majola and McIntosh,” he said.

The bonus investigation relates to the hosting of two major cricket tournaments by South Africa in 2009, following the political unrest in Pakistan and India.

These were the IPL, held from 18 April 2009 to 24 May 2009 and the Champions Trophy, held from 24 September 2009 to 5 October 2009.

An independent internal auditor, reported that a pool bonus of R2 732 172.00 had been received for the IPL tournament; and an amount of R1 131 062 had been paid to Majola and R797 999 to McIntosh as bonuses.

Since the Nicholson inquiry has concluded its investigations, it is now the prerogative of Mbalula as to how to implement the findings and the recommendations of the committee. - BuaNews
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