A legal showdown is brewing between the PSL and former sponsors of the football body’s first division league, GladAfrica Engineers (GAE).
Sunday World can exclusively reveal that the PSL has filed court papers in the Joburg High Court to liquidate GAE in a bid to recoup R30-million it failed to pay to the organisation for the three-year sponsorship they signed about five years ago.
In the papers, which we have seen, PSL acting CEO Mato Madlala said GAE, whose sole director is Noel Mashaba, should be wound up because it was unable to pay its creditors.
Madlala said the PSL, represented by its chairman Irvin Khoza and GAE, represented by Khulna Lebese, signed a sponsorship agreement at the PSL’s offices in February 2019, to co-operate in promoting the interest of football, in particular, through an official and exclusive sponsorship of the NFD for a period of five years commencing on August 1, 2019 and terminating on July 31, 2024.
After signing the deal, the NFD was renamed GladAfrica Championship.
GAE, said Madlala, agreed to pay the PSL R150-million consideration fee in tranches of R30-million a year, inclusive of VAT.
The R30-million was supposed to be paid in three equal instalments of just under R9-million for the 2019/2020 season. More than R8.6-million, said Madlala, was supposed to be paid on August 5 2019, the same amount before November 30, 2019, and the final before February 28, 2020.
Madlala said in the event GAE breached the agreement, the PSL would give the company a period of 14 days to remedy the situation.
She said they also agreed that if GAE failed to remedy such breach within 14 days of written notice, the PSL would cancel the sponsorship agreement and claim damages from the company.
“The respondent breached the sponsorship agreement by inter alia, failing to make payment of the 2021/2022 consideration fee, which was due on or before February 2022,” read the papers.
Madlala said GAE wrote to the PSL on May 12 last year requesting the organisation to consider reducing the payment of the season to R5-million, which it intended to pay over a period of eight months.
She said the PSL responded on May 19, stating it would consider GAE’s request in the next executive committee meeting later that month.
Madlala said at the meeting, the executive body rejected GAE’s proposal .
She said the PSL wrote to the GAE on May 31 advising it that the fee for 2021/2022 was due, owing and payable by February 28, 2022.
She said the PSL also advised GAE to pay the agreed amount before the executive committee could consider the new proposal.
“Requesting that the respondent rectify its breach of the sponsorship agreement within 14 days by making payment of the sum of R30-million to the applicant,” read the papers.
After several meetings, which failed to yield any fruit, said Madlala, the PSL wrote to GAE on July 20 last year demanding the R30-million payment.
Madlala said the PSL further told GAE that if it failed to pay the amount within 14 days, it would be deemed to be unable to pay its debts as contemplated by the Companies Act.
“The respondents is indebted to the applicant in the sum of R30-million plus interest there on at the legally prescribed rate of interest (currently 10.50%) from June 1, 2022 to date of payment, both days inclusive.
“It’s respectfully submitted that the respondent’s failure to pay the applicant despite demand is cogent prima facie proof that the respondent is unable to pay its debts. Wherefore the applicant prays for an order in terms of the notice of motion prefixed hereto,” read the papers.
GladAfrica’s executive for corporate services Dulegang Maboi said: “GladAfrica is aware of an application launched by the PSL and rejects the allegations in the strongest possible terms. GladAfrica intends to oppose the application and will not comment any further.”
