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The legal dispute between KwaZulu-Natal’s Finance MEC Belinda Scott and Ladysmith bingo operator Percy Shabalala over licences he was granted by the province’s gambling board has turned nasty.
Now Shabalala, owner of Poppy Ice Trading Pty (Ltd), which operates Great Bingo, has written to Premier Willies Mchunu accusing Scott – who is involved in two High Court actions challenging the licenses he was awarded in January 2015 – of a conflict of interest in the horse racing industry, over which her ministry holds political oversight.
Shabalala claims that Scott’s decision to challenge the board’s award has cost him more than R30 million in lost business as it has prevented him from extending his Ladysmith operation and opening up a new one in Vryheid. He also claims that Scott has been instructed to settle the matter by the premier’s office but is refusing to do so.
In the letter, written to Mchunu’s predecessor Senzo Mchunu on April 18 this year, Shabalala claims that Scott had confirmed the appointment of two board members – former Finance MEC Peter Miller and Advocate Nigel Hollis – despite objections because of their relationship with bingo operator Gold Circle.
Shabalala claims that both Miller and Hollis had been members of Gold Circle, while Hollis had acted as a legal advisor to Gold Circle in preparing its licence applications to the board.
Hollis had also acted as counsel for the People’s Forum Against Electronic Bingo Terminals, which was a co-applicant with Scott in an application in the Pietermaritzburg High Court against the board and the province’s bingo operators to have the award of their licences revoked.
“It was pointed out to the MEC that the appointment of Hollis and Miller as members of the board would lead to, at the very least, a sensible possibility of the undesirable situation where their personal interests would be in conflict with their fiduciary duty to the board. Despite the aforesaid objections, the appointment of Hollis and Miller was approved by the MEC,’’ Shabalala said.
Shabalala says that while the two may have resigned from Gold Circle, the “association’’ with a major player in the gambling industry remained.
Shabalala also claims that Scott’s husband and his family were “embedded’’ in the racing industry and were members of Gold Circle and that she should never have accepted a portfolio that involved gambling or horse racing.
“My view is that the MEC is in a position where her interest has placed her in conflict with her duties as the administrator of gambling as well as her duties set out in terms of the Public Finance Management Act (PFMA). I recommend an investigation into the extent of the conflict and the appropriate sanction,’’ he said.
Shabalala also said that Scott dragged out a settlement process which Mchunu’s own legal advisers had recommended and called for her to be “redeployed’’ as she is not fit and proper to command her current portfolio.
In response to a series of questions from City Press, Scott confirmed that she and her husband – who is a racehorse breeder based at Nottingham Road – are members of Gold Circle but that this was disclosed to former Premier Senzo Mchunu when she was appointed in 2014.
She said they received no benefit from Gold Circle beyond those which ordinary members received and that she had not favoured the organisation in any way.
Scott said Shabalala had made repeated attempts to “tarnish my good name and reputation and I accordingly reserve my rights in this regard.”
She said Hollis and Miller were appointed after “an extensive probity conducted by an independent body’’ and that both “add value’’ to the functioning of the board.
“I believe that the members in question bring important skills and experience to the board, and that the board benefits from their membership,” she said.
Regarding the court action challenging the licence award, Scott said she had not seen any directive from the premier’s office ordering her to withdraw and that she believed the decision lay with her office.
“I do not believe that the legal department (of the premier’s office) has the authority to instruct me to do so. I am the Member of the Executive Council to whom the function of gaming and betting, and the administration of the Act, have been assigned. In my view the former board’s decision was irregular and illegal and should be set aside. It would not be appropriate for me to ignore the illegality,’’ Scott said.
Gill Mostert, spokesperson for Gold Circle, said it would “be wrong for Gold Circle to respond to any questions that relate to individuals.”
Hollis did not respond to calls and an email from City Press at the time of writing.
Ndabe Sibiya, spokesperson for Mchunu, said the premier was “applying is mind” to the matter and was consulting with all role players to find a way forward.
Asked whether Mchunu wanted the court cases settled, Sibiya said the premier preferred not to comment further.
