Western Province and Aerios head to final legal confrontation

Jilted former Western Province Rugby Football Union (WPRFU) commercial partner Aerios is taking another stab at squeezing money out of the beleaguered union at a section 417 hearing on Thursday.

After the Western Cape High Court liquidated the commercial arm of the union‚ Western Province Rugby (Pty) Ltd (WPR)‚ last December‚ Aerios was given the same rights as other creditors much to its frustration.

Aerios chief executive Costas Constantinou believes his company is owed in excess of R270m by the WPR and set about pursuing the money via a section 417 hearing.

It’s a staggering escalation since December when the High Court liquidation ruling stated: “It was apparent‚ however‚ that the company (WPR) faced a claim of about R70 million by Aerios in respect of amounts allegedly due in terms of their contractual relationship.”

No reasons for adding another R200m on to the claim have been made clear in the public domain.

A section 417 inquiry is a complicated process whereby witnesses are called and are compelled to answer questions‚ usually to determine if there was any misconduct in the original liquidation process.

This process exists as a last resort for disgruntled creditors because a liquidator usually comes into a process at an advanced stage when a company is already in financial trouble.

Aerios believes that WP Rugby (Pty) Ltd did not conduct its affairs in a proper manner and they are challenging the R8.5m valuation of the company‚ which was accepted in the liquidation process.

Among those compelled to give evidence at the hearing that could take days‚ if not weeks and which is being held in an undisclosed location‚ are representatives from WP including president Thelo Wakefield‚ chief executive Paul Zacks and former chief executive Rob Wagner.

Also believed to be under subpoena are senior figures at investment company Remgro‚ who provided bridging finance to WP last year when it was technically insolvent. Remgro subsequently continued to fund the union‚ but last week announced it would no longer be involved.

In a statement Remgro chief executive Jannie Durand said: “Remgro does not intend to respond to all the detailed allegations made by Aerios except to state that the liquidation process and our dealings with WPRFU were all conducted in an honest and legitimate manner.

“We are offended by the baseless allegations of insincerity and dishonesty. It is noteworthy that according to Aerios’s version every stakeholder involved in the liquidation process seems to have been plotting against them‚ including independent third parties like the judge‚ PwC and the liquidator.

“Remgro is aware of the section 417 inquiry that will be conducted and will cooperate with the process to the extent that we are required to do so.

“We confirm that our decision not to pursue an investment opportunity in the new commercial arm of WPR is informed by changes in the professional rugby environment and the regulations governing it.

“We confirm that our decision not to pursue an investment opportunity in the new commercial arm of WPR is informed by changes in the professional rugby environment and the regulations governing it.

“As a JSE listed company with significant investors like pension funds and collective investment schemes‚ Remgro was simply unable to justify the continued pursuit of this opportunity.”

- TimesLIVE