Sharks' financial misconduct woes [Sunday Independent (South Africa)]
(Sunday Independent (South Africa) Via Acquire Media NewsEdge) THE KwaZulu-Natal Sharks - a globally revered rugby franchise - has been rocked by serious allegations of financial mismanagement.
The alleged breaches emerged in a disciplinary hearing into allegations of "serious misconduct" by a senior staff member of the Sharks.
A 47-page report described as "highly sensitive", which was leaked to the Sunday Tribune this week, details a litany of apparently unethical financial practices spanning more than a decade.
Claims of irregular payments for "deserving" staff members, gifts and bonuses, free luxury stadium suites, inflated bonuses, free cars, nepotism, poor accounting and large unauthorised handouts were all part of the mix.
A source close to Sharks (Pty) Ltd said that several months ago a forensic investigation had been initiated as part of a good business practice to ensure sound financial management within its business.
Said one Sharks board member who asked not to be named: "It is in the public interest that we have a squeaky-clean operation.
"As a global icon, The Sharks are accountable to their supporters and the next generation of supporters to be honest and above reproach." The disciplinary charges that were brought against Leigh Heard, the Sharks (Pty) Ltd's financial manager, were based, the Sunday Tribune was told, on the results of the forensic investigation.
The primary allegation against Heard was that, on being awarded an expense allowance, she used the account to process personal expenses, thus avoiding VAT and PAYE.
Among the charges put to Heard were that she instructed the salaries department to pay her a special payment of R92 136, and a further amount of R143 500.
Accountants called to testify at the tribunal suggested she was not authorised to give such an instruction, nor entitled to these amounts.
Other allegations included buying goods for her home, including a TV, with VAT on the purchase being paid by her employer.
Earlier this year, the Sunday Tribune was able to hint at the fact that a newly appointed Sharks board, headed by former Springbok and Sharks rugby captain John Smit, had found on his appointment as chief executive that there were certain issues within the administrative arm that needed to be sorted out.
Heard, who was found guilty of gross negligence and summarily dismissed from the job she had held for 12 years, claimed she had worked in a climate where illegal practices were rife.
She told the Durban tribunal, set up to probe suspected irregularities, she was only doing what everyone else in the Sharks administration was doing. And that was to bypass the taxman wherever possible.
In her defence, Heard said she was being unfairly targeted, and asked why other so-called infringements, like scouting fees sanctioned by Sharks (Pty) Ltd, were acceptable, whereas hers weren't.
Other infringements, she said, included image-rights payments to some players in the Sharks' squad and the non-payment of taxes by members of the board for honorarium allowances.
She said that, while she conceded what she did was wrong, it did not make her unfit for office, as she could refund any taxes that might be due.
She admitted income tax documents should have been issued to all board members receiving honorariums, but she had been told not to issue them.
She said it was not her business or her place to go ahead with it, as she "wasn't part of the men's club", and was just the "chick in finance".
Although she knew things weren't right from a tax point of view, she had no voice to challenge the previous regime, whom she claims would not have looked on her favourably if she had done so.
Giving evidence before the tribunal, South African businessman and chairman of the board for Sharks (Pty) Ltd Stephen Saad said he had been sought out for his business and financial expertise.
He said 2013 was a tense time for the business, with John Smit taking over the reins.
Saad further said that Leigh Heard was also upset about Smit's appointment as the new Sharks chief executive, as she felt that she should have been given the job, because her "safe pair of hands" would keep things running.
Early last year, the Sharks operation had received a tip-off from a whistle-blower alleging "all sorts of financial irregularities".
"I initially thought that this was a grudge against Leigh Heard, and never imagined that any of the allegations could be true," Saad said.
"The offences were very serious, and had irretrievably damaged the trust relationship." A spokesman for The Sharks said they believed the independent chairman's sanction of summary dismissal was justified.
Meanwhile, Heard has referred a dispute of an unfair dismissal to the CCMA.
The Sunday Independent (c) 2014 Independent Newspapers (Pty) Limited. All rights strictly reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
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