In a letter to all members of the KZN Racing Association Chapter, KZN Regional Chairman Moga Pillay calls for opposition to Resolution 12. The letter carries a Gold Circle letterhead, and asks for opposing proxies to be faxed to the official Gold Circle fax number in Durban.
It is my view that the letter is misleading, and clearly shows Pillay’s lack of understanding of the intentions and good faith of the merged Shareholders Agreement signed by the KZN and the Western Cape. The lack of leadership seems to be an ongoing challenge for Gold Circle.
Let me use this opportunity to place on record the status quo in terms of the Shareholders Agreement and to highlight the good faith intended in this agreement.
When the clubs decided to merge the intention was that no party would piggyback on each other. At the time the Durban Turf Club, Clairwood Turf Club, Pietermaritzburg Turf Club and Western Cape Racing Clubs were individual entities it was decided that each one would hold a share and hence the 75% – 25% split. This pro rata equity position was not introduced based on commercial science but rather to expedite and implement the merger without trying to merge the three Natal Clubs before consummating the Shareholders Agreement. The merge of the three Natal Clubs was seen to be time consuming and difficult and hence the reason it was understood that this disparate equity arrangement would never be held against the Western Cape and for that reason a Grandfather clause was introduced where an 80% majority was needed to effect any material change such as sale of properties, etc. The commercial aspect to this agreement was defined in Clause 23.2 of the Shareholders Agreement, which apportions the stakes payable in the Western Cape in relation to KZN (58% in KZN and 42% in the Western Cape). The 58% – 42% was a agreement which realistically defined the revenue contributions at the time.
Whilst it is encouraging to note that the board is not opposed to the restructuring of the business, this response to Mr Pillay’s letter is intended to correct the misguided interpretation. I believe that every member has the right to apply their mind and to vote with their conscience.
HASSEN ADAMS
