The operator of the Nelson Mandela Bay Stadium, Access Facilities and Stadium Management has broken its silence and commented Thursday on the pending legal action against it by the Nelson Mandela Bay Municipality.
The Council said it had instituted action against several companies and individuals in a bid to recoup some R300m it said "were spent illegally and misused".
"Summons was issued out of the High Court against Access and five others on 15 November 2016. The other individual defendants include Michiel Adrian Oberholzer, Chantal Du Pisani, suspended Metro Budget and Treasury employee, Nadia Gerwel, Andrea Wessels and her company Zeranza 299 (Pty) Ltd," executive mayor, Athol Trollip said in a statement Thursday.
"Summons was issued out of the High Court against Afrisec and others on 19 October 2016. The other individual defendants include Mhleli Tshamase, Metro CFO, Trevor Harper, dismissed Metro Contracts Controller, Songezile Nkanjeni and Metro Assistant Director in Contract Management and Legal Compliance, Nobuntu Mgogoshe," he added.
In a new development Thursday, Chief Financial Officer Trevor Harper, was placed on precautionary suspension pending the outcome of a probe by the Hawks into this and a host of other issues.
Criminal charges have also been laid by the Municipality.
Meanwhile, reacting to these developments, Access Facilities and Stadium Management CEO, Riaan Oberholzer, said they could no longer keep quiet while their 30-year reputation was being tarnished.
He said they had been quiet until now because the "Stadium is owned by our client, the Municipality; our business ethics, and respect for the reputation of the Stadium and our client, have dictated that we remain silent, particularly in 2016 as an election year."
The second reason for their silence, he said was that the "Stadium operator agreement contains a confidentiality clause which restricts our ability to comment in the public domain, a statute that we have rigorously adhered to for the past seven years that we have operated the Stadium".
The full statement from Oberholzer follows below:
On 18 November 2016 Access Management ("Access"), operator of the Nelson Mandela Bay Stadium ("Stadium"), received a summons for R211 million from the High Court of South Africa, issued on behalf the Nelson Mandela Bay Municipality ("Municipality"). On 23 November 2016 this information was reported on by the local media.
To date Access has made no media comment on this, or numerous other reports about our operation of the Stadium. We have done so for two important reasons:
"The Stadium is owned by our client, the Municipality; our business ethics, and respect for the reputation of the Stadium and our client, have dictated that we remain silent, particularly in 2016 as an election year; and
"The Stadium operator agreement contains a confidentiality clause which restricts our ability to comment in the public domain, a statute that we have rigorously adhered to for the past seven years that we have operated the Stadium.
Access can no longer stand by and have our proud 30-year track record in the South African sports industry, and our exceptional seven-year track record at the Stadium tarnished by baseless accusations and the incompetent analysis of the Stadium financial operations, and will take whatever action is required to clear our names.
Over the past 18 months Access has been acutely aware of a clear agenda to discredit us, led by senior role-players in the Municipality and related organisations. These actions have aimed either to enable other third-party stadium operators to be appointed, or are an attempt to pave the way for the Stadium to be managed internally by the Municipality. While the Municipality has the right to pursue this option, it cannot do so at the expense of Access's good reputation.
We have:
"been made aware of several Stadium-related meetings in the first half of 2016 between senior municipal officials - two of whom continue to play a key role in Stadium matters -where the topic of discussion was discrediting Access, while ensuring that we submitted a detailed Stadium operator request for proposal (RFP) - thus allowing them to gain access to our valuable intellectual property;
"twice found listening devices (bugs) in our offices and meeting rooms;
"faced a concerted effort to prevent Access from submitting our RFP in May 2016, to operate the Stadium in 2017 and beyond;
"provided confidential financial and electronic Pastel accounting records to a third-party company (EOH) appointed by the Municipality to investigate Access in 2016;
"responded to numerous out-of-the-ordinary requests for detailed financial and other information from the City Manager's office in 2016;
" faced baseless claims by the Nelson Mandela Bay Ratepayers Association (NMBRPA) and AfriForum regarding payments, made under instruction of the Municipality and in terms of our contract, to the EP Kings and Chippa Utd; and
"been investigated by the Auditor General, Deloitte Inc and the Hawks since 2013, in connection with the Municipality authorised and funded MBay MegaFest concert scheduled for May 2012, which never took place. We also instructed Grant Thornton to conduct an independent forensic audit into this event.
Despite this, on 25 November 2015, the Municipality submitted a letter of demand on Access to reclaim R11.95 million from the MBay MegaFest concert, and cancelled the Stadium operator agreement. Acting City Manager Mettler withdrew the proceedings on 18 January 2016.
Access has complied fully, promptly and in detail and has cooperated with all the investigations and requests for information listed above. We have received no feedback whatsoever, or any follow-up action.
Access was the only one of five South African stadium operators to successfully comply with the Stadium tender requirements and evaluation, and the Tender Evaluation Committee recommended in October 2016 that we be re-appointed as the Stadium operator from 2017.
However, on 6 October 2016, after this recommendation, Acting City Manager Mettler cancelled the Stadium RFP process, without providing a rationale for doing so, or following due process and first gaining Council approval.
At the time, Access decided not to take the matter further, and to co-operate fully with the Stadium operator handover process to the Mandela Bay Development Agency.
Now, after receiving the High Court summons we are reconsidering this decision, and reserve our right to contest it.
We further note that since May 2015 when Mayor Jordaan was appointed, Access has made numerous requests, both in writing and verbally, to meet senior Municipal leadership, as was the norm previously, not only to clarify the above situation, but to present our vision and plans for the Stadium, which is the Municipality's most valuable asset.
Since acting City Manager Mettler was appointed, Access has had one meeting - in January 2016 - after which he confirmed in writing on 18 January 2016 that further round-table discussions, preferably without lawyers, should take place. However, he has subsequently refused all requests to meet with us.
Furthermore, we have, and continue to work, closely with the Municipality's Budget and Treasury directorate to strictly adhere to the applicable Municipal legislation and regulations regarding financial management of the Stadium. This includes:
" annual preparation of a zero-based budget that is submitted to the Budget and Treasury directorate each April;
(This budget is then approved, or amended and Access is informed of the results after the budget-approval process. We have no input into this process after submission of our proposed budget.)
" once approved, Access adheres to this budget, submitting a monthly income statement to the Municipality, with every supporting invoice, as we have done for seven years;
" the Municipality approves these expenses and relevant payments are made, using the Municipality's seven-signature approval process - whereby all payments to be made are verified and it is ensured that both Access and the City are aligned to the approved budget;
" monthly management accounts are submitted to the Budget and Treasury directorates;
" quarterly reports are provided to the Budget and Treasury Performance Management Committee; and
" there is provision for ad hoc reporting to the full Council.
Access is audited annually by independent auditors Grant Thornton, and has received clean audited financial statements every year.
Access fully supports the Municipality's recent crackdown on corruption, but cannot allow ourselves to be falsely tainted and implicated.
We have never enriched ourselves or misappropriated any funds. As stated clearly in our affidavit submitted to the High Court in the Afriforum matter: "It is denied that there is any impropriety whatsoever on the part of Access…. Access has at all material times acted under the instruction of the municipality and in terms of the operator's agreement."
The summons for R211 million, makes it clear, once again that, despite full and transparent access to all Stadium financial records and seven years of working closely with the Budget and Treasury directorates of the City, we face a now familiar scenario - where the organs of state are being misused, or the Municipal Finance Management Act has been contravened by a lack of understanding of the Stadium operator agreement and financial processes. Fruitless and wasteful expenditure has, and continues to be, incurred by the Municipality on a baseless matter.
Access will continue to respond promptly and transparently to all legal requests for information, and will again, formally, request the opportunity to meet senior municipal leadership face-to-face, making the current approach unnecessary and irresponsible, both from a Stadium and Municipality public relations and financial point of view.
“We are no longer prepared to stand by while our reputation is tarnished”.
