Mass resignations at the NHRA

ota yes my info too currie in hyde out moodley can only be replaced if a suitable candidate can be found. what confirms your view of re arranging the deck chairs and funnily enough supports susan rowett that this is just a coup is that the new constitution retains the nom comm. so 5 people get to choose who to nominate as directors. talk about a closed shop. that said the big shots have clearly said they put up the cash and are obviously determined to have their people driving the bus. so the major breeders are the major owners are the operators and the regulators not to mention the bookmakers. unfortunately the reality of racing is it is a sport not a business and is finacially unviable all over the world and is increasingly going to become completely reliant on the main owners largesse. so this is the new normal. cant wait for a legislate wylie hall type finish in the july between three horses one in aquamarine one in black one in yellow and purple. see the regulator pick the pickles out of that one.

NEWLY APPOINTED NATIONAL BOARD DIRECTORS


In terms of Chapter 4 of the Constitution of The National Horseracing Authority (NHA) the Nominations Committee (NOMCO), consisting of Messrs M Currie, G Bortz, A Rivalland, Mr G Ahmed and J Kinsley, has nominated the following candidates to fill the vacant positions on the National Board. The vacant positions are due to the recent resignations of six directors.

1. Mr Mark Currie in terms of Clause 15.1.1 of the Constitution

Mr Currie is a qualified Chartered Accountant and holds the position of Group Chief Risk Officer of the Investec Group having been employed in various roles for 32 years at Investec.

Mr Currie is the former Chairman of the Thoroughbred Horseracing Trust, the former co-chair of Kenilworth Racing and a former Director of the Racing Association (now known as the Racehorse Owners Association).

Mr Currie has been actively involved in the Horseracing Industry in South Africa and has held colours since 1994.

Mr Currie recused himself from NOMCO when deliberating his nominations to the National Board.


2. Mr Laurence Wernars in terms of Clause 15.1.1 of the Constitution

Mr Wernars is the Chairman of the Studio 88 Group of Companies.

Mr Wernars is also heavily invested in the sport of horseracing for over 30 years and is the owner of over 100 horses in training and owns over 100 broodmares and yearlings. He has served on the board of the Racing Association (now known as the Racehorse Owners Association).

Mr Wernars has previously served as a National Board Director from 10 December 2019 to 13 October 2020.


3. Mr Barry Reardon in terms of Clause 15.1.1 of the Constitution

Mr Reardon is a practicing Attorney at Millar and Reardon Attorneys since 1982. He was appointed as Commissioner of Small Claims Court in 2015 and currently serves as a trustee on various testamentary, inter vivos and charitable trusts.

Mr Reardon has been a colour holder since 1 August 1989 and up until 2021, he was also a registered breeder.


4. Mr Brenden Fegen in terms of Clause 15.1.1 of the Constitution

Mr Fegen is currently a Colour Holder and has been a Colour Holder since 18 February 2021.

Mr Fegen is a self-employed businessman in transport and contracting business working with Citrus Farmers, Dairy and Apple Farmers having started the business in 2013.

Mr Fegen is a keen racing enthusiast and holds individual and partnership colours since 18 February 2021.


At its Board meeting convened on 2 October, the above nominations were approved unanimously by the current Board.

Mr Currie has resigned from his position on the Nominations Committee as the Owners’ representative and a replacement shall be announced in due course.

Subsequent to the above appointments, a further board meeting was called, and at that meeting, it was once again unanimously voted that Mr Mark Currie be appointed as the incoming Chairperson.

The NHA congratulates all new members of the Board and appreciates their willingness to guide the organisation at this current juncture.

These appointments are with immediate effect.



Vee Moodley
Chief Executive

To all members of the NHRA and the racing community.
In my final letter as Chair to members dated 30th September (and prior to my resignation becoming effective), I explained to members that there would shortly be a requisition by a group of stakeholders for a SGM to consider their proposed constitution.
We were duly notified on the 8th October by the NHA that the requisition had arrived on 6th October, and on 27th October the formal notice and supporting documents were sent out to members. In a cover letter, Chairman Mark Currie explained that the board had suggested some changes to the proposed constitution which the concerned stakeholders group had then accepted.
Before I deal with the proposed Constitution, I would like to raise concerns about the process followed for the SGM. The NHA, as the regulator, is the rule maker and rule enforcer of the industry. The Board need to ensure that the right processes are followed - it is their fiduciary duty to follow the Constitution, Rules, and good governance. They owe this to the members and the industry, yet it is disappointing that the SGM process undertaken by the Board is flawed in two respects:
The Chairman has stated that following the boards suggestions, “amendments [were] made … to the proposed constitution” by the stakeholder group, which means that this proposed constitution put to members is different to what was requisitioned. It’s clear from his cover note that the Chairman knows the requisition could not be rescinded, but, on the same reasoning, what was requisitioned cannot be altered by the Board. The Board are bound by the Constitution to call the SGM to vote on what was received; not what has been altered by them. The correct procedure would have been for the Board to put the requisitioned proposal forward to the members and added their own items to the agenda to deal with “Board supported proposed amendments”.
The Board should act act in accordance with the terms of the Constitution and the principles of good governance for the NHA status as a voluntary association. It is clear from clause 26, that any alteration, amendment or addition needs to be decided by a special resolution for each change. It should NOT be all in one resolution. Of course, it’s not the Board’s fault that the requisition was put forward in an inappropriate format, but the Chairman states his support for the resolution. He is wrong to give this support : what should have happened is that the Board should have ensured that members be given the opportunity to vote on separate resolutions. This would allow members to vote differently on each item - vote FOR certain items but AGAINST other items.

In my letter of 30th September, I stated my opposition to the draft constitution from the stakeholder group. The proposed constitution for the SGM differs slightly to the draft that I saw, however I stand firmly by my earlier opinion. Now that the proposed constitution has been published and members have had a chance to study it, I would like to formally and publicly record my strong opposition to it and to give the reasons for my opposition. I have tried to cover the main points and in sufficient detail - but without making it too long.

Concerns for the independence and autonomy of the NHA as regulatory body.
Close inspection of the proposed constitution reveal numerous clauses giving oversight and influence to operators over the running of the NHA thereby reducing its independence, plus other clauses putting constraints and limitations on the powers of the Board thereby reducing its autonomy. The stakeholder group say their proposal is fine because they are not putting direct operator or other licensee representatives on the Board (but do not mention there could be a part-time employee of an operator on the board - see below). However, the proposed composition of Nominations Committee (NomCo) with a domination by licensees, the elimination of a direct appointee by owners, the reduction in quorum and the fact that NomCo would be selecting AND appointing directors will allow operators SIGNIFICANT INFLUENCE over the appointment of Directors. It would be naive to think that Directors so appointed would be immune to partisan influences.
Nominations Committee (NomCo). The thinking behind the current composition of NomCo (owner appointee, operator appointee and combined trainer & jockey appointee and two board members) was that every stakeholder would participate in a democratic process to have a say in the nomination of directors and ensure that board members have input to ensure the right skills etc.
The proposed Constitution would have NomCo stakeholder appointees consist of two operator appointees and one trainer appointee. - NO owner appointee. There are approximately 3,000 owners who thus would NO LONGER have the right to appoint a member of NomCo.
Appointees of licensees of the NHA thus have a significant position of strength on NomCo given that the proposed quorum is three and the other two members of NomCo from the Board would themselves have been appointed by these very same licensee appointees on NomCo. It would be naive to think that directors appointed by such a committee would be immune to partisan influences.
The current Constitution requires the appointment of a director to be RATIFIED by the current Board who are bound by their fiduciary responsibilities to act in the best interest of the NHA to achieve the objectives, which makes the Board responsible for having directors who are skilled and competent. The proposed Constitution gives the power to NomCo to appoint directors by a simple majority without ratification by the Board or by the Members. This is a concern because it puts all this power in the licensee appointees who have their vested interests, and moreover who do not have any fiduciary responsibility to act in the best interests of the NHA. Members of NomCo need not even be members of the NHA, and thus are NOT necessarily bound by Constitution and Rules.
Having two Directors on NomCo gives only nominal comfort - given that they themselves would have been appointed originally by these very same licensee appointees and also because proposed Clause 15.9 makes the quorum of NomCo to be 3. This is too small and makes NomCo liable to an abuse of power by licensees, who can just exclude the director members of NomCo by virtue of holding a quorate meeting on their own.
NomCo would be entrenched, controlling the Board, and members having NO SAY AT ALL.
Board composition and independence. With such a licensee dominated NomCo, there would always be perceived doubt about the independence of any director appointed by it. However there are further concerns about various proposed changes :
Proposed 16.8.3 now would allow a PART-TIME EMPLOYEE OF AN OPERATOR to serve as a Director. Having an employee of a licensed entity on the Board weakens independence and autonomy of the Board, and gives perception of undue influence by licensee.
The proposed changes means that there is no longer a 3-year waiting period required before a holder of a licence or an excluded position (eg an employee of an operator) can be eligible to serve on the Board. This also gives the perception of less independence.
The Board is at the mercy of the NomCo to fill vacancies. The Board should have the power to co-opt in the event of NomCo failing to fulfill its duties.
Proposed Clause 18 titled “Stakeholders Rights” gives the operators and the TBA the right to know the dates of Board meetings, to raise matters with the Board and to engage with the Board. Currently there are numerous routes for these entities to engage with the NHA on matters. I am not aware of any request in the past ten years from the operators or the TBA to meet with the Board, and such request would certainly have been acceded to. The problem is that introducing these clauses gives the perception that the NHA is beholden and under the sway of those that it licenses, and thus that it is not independent.
Licensing of operators. Unsurprisingly the stakeholder group have made changes to reduce the regulatory power of the NHA over the operators. The NHA board has power to “grant, subject to such terms and conditions it may impose” licenses to operators and racecourse, however the proposed constitution DOES NOT ALLOW the BOARD to suspend the licence if the operator breaches those terms and conditions or even if it breaches the NHA rules. Clause 19.3.7 only allows the Board to revoke or suspend the licence if i)the operator gave false information in the application, ii)if the provincial gambling licence has been revoked, or iii) if the operator is convicted of an offense of provincial legislation. So even if the operator breached one of the terms and conditions of his license (eg having photo-finish camera, cameras for stipes, scales etc) or was in breach of the rules (eg by not having a working clock), the NHA board would not be able to suspend the license. This is a significant and unacceptable reduction of the power of the NHA to be an effective regulator of racing.
Proposed Clause 13.3 and clause 13.6.1.1 allow AGM agenda items to be proposed by racing operators (non-members) and require NHA to give notice of AGM to racing operators. This gives perception of undue influence by operators who are licensed by the NHA.
The proposed constitution includes clauses relating to the composition of a Rules Committee. Given that making of Rules is a key function of the regulator, the Chair of the Rules Committee should surely be appointed by the Board and NOT the licensee-dominated Nominations Committee. This usurps the power of the Board and gives the perception of undue influence by the licensees.
A key part of the regulatory function of the NHA is the appointment of inquiry and appeal panels. The proposed Clause 20 gives the operators the right to receive notice of possible candidates, to put forward candidates and to attend Board meetings and engage meaningfully on these appointments. Allowing operators to influence and interfere appointments to panels is undue influence by licensed operators - and indeed would weaken the ability of the NHA to inquire into a breach of the rules by an operator.

Concerns with functionality
Current Clause 6 lists all the wide powers of the NHA as a whole that it has to fulfill objects, and Clause 16 lists the powers of the NHA board which includes quite a lot of Clause 6 but not all. Proposed constitution now has clause 6 and clause 19 which both list powers of NHA Board. Clause 6 should remain as currently as being ALL the broad powers of the NHA (whether they vest in the Board or elsewhere). For example, Clause 6 should say that the NHA has the power to appoint inquiry boards, appeal boards etc - these boards are not appointed by the Board. Likewise the NHA needs to have the power to have a NomCO (as it does currently) to deal with the nomination of directors. Another example is the power to impose penalties which needs to be a power of the NHA as a whole because its through the inquiry/appeal boards that the NHA imposes penalties.
Clause 6.22 deals with the remuneration of the various inquiry and appeal boards BUT it omits to include remuneration of Prohibited Substance Inquiry Board.
Proposed Clause 8 does not include the current clause covering the class of ex-officio members. The effect of this is that the directors appointed as independent/non-racing directors are NOT automatically Members and thus NOT bound by the Constitution and the Rules. ALL directors should automatically be bound by the Constitution and Rules, and constrained to uphold the objectives of the NHA.
Proposed Clause 10 allows membership and voting to certain classes of juristic entities in addition to real people. This is counter to the traditional membership ethos and open to abuse.
The proposed constitution has all the Board directors resigning and new appointments being made. There will therefore be a board of directors having simultaneous terms of office which gives continuity issues because it is likely that there would be no board and thus no directors on NomCo when their terms of office end after the AGM in 2028.
Proposed Clause 21.3 giving power to legal officer to co-opt person to inquiry/appeal board is unwise as it could be open to abuse. The Board is perfectly able to make any short-notice / urgent appointment decisions in a virtual meeting, or by round robin.
The proposed Constitution removes the Board’s current power to constitute an inquiry board for a specific matter, and there may be specific circumstances where the Board would need to.
Concerns with drafting
There are various drafting errors of spelling and grammar, which show unsatisfactory level of care and attention given the importance of such a document for the industry. Some examples:
proposed Clause 10.9.3 - jurisdiction instead juristic
proposed Clause 13.2 and 14.2 are poorly worded about the notice period required for a members meeting. Proposed Clause 14.2 purports to make 13.2 apply to SGM, but actually 13.2 only applies to AGM.
proposed Clause 16.1 - does not make sense to say "minimum of 7 … 8 of whom …” must be appointed
proposed clause 19.3.1.4 refers to prescribing procedures to inquiry and appeal boards but it omits to include Prohibited Substance Inquiry Boards

Conclusion
The NHA needs to be independent, strong and solely motivated to uphold the integrity of racing. If commercial priorities of those with vested interest are allowed to overpower sporting integrity, we will not have fair and clean racing, and the industry will decline.
In my view, the proposed constitution would facilitate the capture of the NHA by licensees and its adoption would severely compromise the independence and autonomy necessary for the NHA to fulfil its role as a strong regulator safeguarding the integrity of the racing industry. A weakened NHA, with its structures dominated by partisan interests, would not maintain the high level of independence required and expected for the self-regulating status of the racing industry.
For these reasons, I have voted NO to the Special Resolution.
I urge all members to consider the matter very carefully and to make up their minds. We are the members and it is up to us decide the future of the NHA and the South African racing industry.
Kind regards
Susan

Susan Rowett
Life Member NHA