Vote of no confidence in current CSA Administration and Board

In view of the current financial status of CSA and the recent debacle regarding the Nation Road Director of the federation at the recent World Championships whereby the National Road Director sought payments from riders who sought his assistance as he was financed by a rider he coaches and not the National Federation.
The National Director also runs a private coaching company which is a conflict of interest with the position he holds with Cycling South Africa.
CSA is 4 million rand in debt and have no viable plan to negotiate the members out of this crisis.
It was also recently discovered that CSA availed of members insurance premiums to pay salaries and other debt .
Riders who also paid their membership fees after March are not insured.
This has been widely debated on Social media platforms and is now common knowledge within the Cycling fraternity in SA.
The time has now come for the cyclist's voice to heard and a vote of no confidence tabled against the current Board and Administration of CSA

Dear Colleagues

There has been a lot of debate regarding our situation and the Administration option. The reality is that we have a long list of creditors with no guaranteed funding to service the debt.

The breakdown of creditors currently is as follows:
Trade creditors R 276,779
Flight Specials R 353,964
REM R 236,795
Mazars R 114,000
Velotex R 482,732
Cannibal R 175,490
Total Trade R1,639,760

UCI R1,134,075
Affiliates R 765,380

Total liabilities R3,569,215

Monthly running expenses for operations are R174,838

Summary of ExCo and ManCo feedback received regarding the Administration option :
• administration is not the right option
• the route of administration may inhibit our (CSA) marketing /funding options as a federation although cycling per se will remain highly marketable. We just need to dig somewhat deeper to find the best alternative route
• Continuing to trade without any prospect of eliminating this insolvency is irresponsible and accordingly is not an option. We cannot just continue as before without taking action. We cannot just carry on incurring expenses, including salaries, rent and other operating expenses, without adequate income to cover them, let alone pay the creditors as funds become available. The situation is very serious and will not change without new sources of income. Not addressing it adequately is negligent and a dereliction of duty by those who serve on EXCO.
• continuing after the auditors informed us about being technical insolvent is a crime. Once the auditors signed off the history is set. We must review the business model. Currently we are only trying to defer the inevitable.
• We now have a Treasurer who EXCO and MANCO nominated, and is a qualified professional. We can certainly ask for clarification, but we need to listen and trust his judgement and opinion, else Mr Booth is unfortunately wasting his efforts

Feedback from our parent bodies:
• SRSA
o No response
• SASCOC
o Administration will be harmful to the image of Cycling SA and will turn potential sponsors away. We have to look at ways of rescuing the situation with funding
• UCI
o The UCI is a significant creditor of CSA but also, as the international governing body, needs to protect the image of our sport and make the appropriate decisions concerning CSA as a member Federation.
o The Federation’s - and hence the sport’s - image is already suffering to an extent, evidenced by the non-renewal of licenses for example. There is a risk that this image will become further damaged if a precipitous move into financial Administration is seen by creditors in the cycling family and elsewhere as a means of starting afresh by simply leaving old debts unpaid.
o The UCI also has a duty to consider the suspension of CSA due to its financial situation and a suspension may be more difficult to avoid with an immediate decision to enter Administration if there is not a longer term strategy in place. As you know, suspension might impact events scheduled to take place in South Africa and the Federation’s status on the international scene.
o Our current recommendation would therefore be to ask you to come to Bergen with a detailed action plan from the ExCo to reform and restructure CSA. Such action plan may have to involve financial Administration and should certainly address the current management structure of the Federation and the overall structure of the sport in South Africa. It should also address how the Federation’s creditors will be treated in the event of financial Administration.
o South Africa is a great sporting nation with a huge role to play in all of cycling’s disciplines and we assure you that the UCI will seek to support the Federation as it enters this process of change so that it emerges stronger on the other side.
We will be guided by the UCI to have a detailed plan of action to remedy our situation and to reform and restructure the Federation. I believe we have parts of this already with the action lists agreed to at the last ExCo meeting. We however need serious and committed action with these plans.

While we debate the Administration route, we need to have a plan to appease our creditors.

My suggestion is to follow the UCI’s recommendation and make the decisions after I have had the discussion with them. I take the possibility of suspension very seriously which I will address in my letter of response and further discussion with them.

We have put high level plans in place to address our shortcomings and reconsider our structures. These however will remain only paper plans unless we have a committed effort from all to make a difference. What progress have we made with our action list?

Workshop proposal
There is a proposal for a professionally run workshop from Apples Appleton(our streamit360.tv service provider) - see attached email.
This will give us a structured plan to address our issues but it comes at a huge cost. This option we have to consider seriously. Please provide your feedback on this proposal. It will require funding from the provinces or self-funding for attendees.

Thanks

William Newman
President
Cycling South Africa