Horseracing at Turffontein. Picture: RUSSELL ROBERTS
Horseracing at Turffontein. Picture: RUSSELL ROBERTS

Public protector Busisiwe Mkhwebane will be holding public hearings into alleged improprieties related to the corporatisation of the horseracing industry in Gauteng.

The hearings will start on September 4 at Mkhwebane’s offices in Pretoria. They will form part of her investigation into alleged maladministration and improper conduct relating to a memorandum of understanding (MoU) between the Gauteng Provincial Government and the Gauteng horseracing industry‚ concluded 21 years ago. It led to the transfer of certain racecourses to Phumelela Gaming and Leisure.

"The MoU sought to re-organise and restructure the industry into a single corporate structure‚ reduce the involvement of the [provincial government] in the sport and make the sport economically viable‚" said public protector spokesperson Oupa Segalwe on Wednesday.

"Following the conclusion of the MoU and the dissolution of the Horseracing Development Fund‚ Phumelela was formed and listed on the JSE."

Parliament’s labour portfolio committee said earlier this month it was "not impressed" with the living conditions of grooms at the Randjesfontein training centre in Midrand, which the committee visited after a grooms’ protest in June.

The committee has formally requested that the labour department conduct "thorough inspections in the entire horseracing industry to ensure compliance with the laws of the country". The office of the public protector received complaints about the industry in the province in 2012 and 2013.

Phindi Kema alleged the conclusion of the MoU was improper and constituted maladministration because it did not follow a parliamentary consultation process. She said this led to a monopoly of the industry in favour of Phumelela and Gold Circle. Kema alleged that as a result‚ horseracing clubs in Gauteng and other provinces "handed over" racecourses to Phumelela for free‚ some of which were later sold for profit.

South African Grooms Association president Chophelikhaya Simoto alleged that during negotiations to corporatise the industry‚ it was agreed that the Horseracing Development Fund would pay R17.5m to Phumelela for the benefit of grooms. He says Phumelela did not pay the money to the grooms.

Former Gauteng Gambling Board employee Hanif Manjoo alleged in 2013 that the provincial government "disregarded the legislative prescripts regulating the disposal of the government’s assets" when it was transforming and corporatising the industry.