Yet another professional rugby team stands on the brink of extinction

Another South African union faces financial ruin as a result of the COVID-19-enforced lockdown. Sport Employees Unite, the workers union, revealed that the staff of the Falcons Company, the professional arm of the Falcons Rugby Union, have not been paid their salaries this month – writes Jan de Konig.

The cash crunch at the East Rand-based union comes as a result of the cancellation of the 2020 Global Rapid Rugby season.

Competing as the Malaysia Valke, based in the Malaysian capital Kuala Lumpur, the team used the Rapid Rugby tournament – funded by Australian billionaire Andrew Forrest – as their main source of income.

The Aussie Rugby Show – Ep 11

The Aussie Rugby Show – Ep 11

However, since the Perth-based venture was canned in April, there has been no income for the East Rand-based Falcons.

SEU CEO Piet Heymans said there has been a “lack of communication” from the acting Falcons CEO Ettiene de Lange regarding the situation.

He regards this as a “lack of respect”.

“In terms of section 129(7) of the Companies Act 71 of 2008, there is an onerous obligation placed on a board of directors of a company wherein if the board determines that a business is in fact in financial distress, they are to either adopt a resolution to commence with business rescue proceedings, alternatively, deliver a written notice to each of its creditors, employees, trade unions and shareholders, setting out, inter alia, its reasons for not voluntarily commencing business rescue proceedings,” Heymans said.

“Failure to adhere to provisions as set out in the act could result in a director or directors being held personally liable for all the debts of a company.

“All our members have debit orders that will be going off soon and had they been advised earlier by the Falcons about the financial position of the Falcons, they could have had time to make arrangements with their banks and creditors.

“The costs of these returned debit orders will run into thousands of Rands and we will claim that from the Falcons, Heymans added.

“We will consider all our legal options and then pursue our members’ interests at all costs.”

The Falcons’ cash crunch follows in the wake of the Southern Kings being placed into administration by SA Rugby, after a similar scenario unfolded at the Port Elizabeth-based franchise back in April.