An interrogation is under way to determine how the EP Kings ran into millions of rands in debt, resulting in its players and creditors not being paid.
The aim is to establish whether EP’s directors traded in a reckless and negligent manner.
The media is not permitted to report on the in-camera proceedings.
One of the two major issues to be looked at is why EP continued to contract players at exorbitant salaries when the beleaguered franchise was already effectively insolvent.
Players such as Schalk Ferreira, Sylvian Mahuza, Elgar Watts and Steven Sykes were earning between R1-million and R1.85-million a year.
The second issue is to determine what happened to the EP Rugby Union’s television rights fees of R28-million after 20 of its players signed 24-month contracts with SA Rugby Union (Saru) chief executive Jurie Roux’s company, SA Rugby Travel.
The interrogation started in the Port Elizabeth Magistrate’s Court yesterday.
Interested parties such as Roux, EP Rugby president Cheeky Watson, then Saru president Oregan Hoskins, then Saru deputy president Mark Alexander, Saru chief financial officer Basil Haddad and Sanzar chief executive Andy Marinos could be called to the stand over the next few days as an independent liquidator tries to establish exactly what went wrong.
EP Rugby Union (Pty) Ltd was placed in final liquidation by the Port Elizabeth High Court in August, with its debts totalling R58-million.
The legal proceedings date back to January, when a group of aggrieved rugby players took their employer to court.
A counter attempt by EP to convert liquidation proceedings into business rescue failed.
If EP’s directors at the time are found to have acted in a grossly negligent manner, a recommendation may be made for the creditors to go after its directors in their personal capacity.
And with EP’s assets valued at a dismal R69 000, this may be the more viable option.
While criminal charges may ensue, anything the witnesses say during the interrogation cannot be used against them at a later stage.