TRUSTCO has threatened the Namibia Rugby Union (NRU) with the termination of an N$18 million sponsorship.
The six-year, N$18-million deal is aimed at promoting sevens rugby in Namibia.
Trustco had committed N$3 million a year for the NRU, of which N$2,5 million would go towards the hosting of an annual international sevens tournament and the rest for the national sevens team and the development of the domestic sevens league.
But the marriage is now on the rocks, with Trustco accusing the NRU of breach of contract and sources in the rugby fraternity saying the sponsor wants to renege on the deal.
NRU insiders say Trustco also wants to dump a debt of close to N$1 million on the financially troubled rugby union.
The debt relates to air travel fees for the Namibian sevens team to Dubai in December and accommodation for international teams at a local hotel for the sevens tournament hosted by NRU in September last year.
In a letter dated February 17 2010, Trustco Group International Managing Director Quinton van Rooyen accused the NRU of breach of contract and demanded the immediate repayment of a loan of N$228 000.
Trustco also threatened not to pay any outstanding debts that emanated from their relationship, including the September rugby sevens tournament.
The termination clause in the agreement states that when the agreement is cancelled any debt incurred during the agreement will be the responsibility of the NRU.
N$800 000 is owed to the Safari Hotel for providing accommodation during the sevens tournament and N$228 000 is owed to Sky Travel for the national rugby sevens team’s trip to Dubai in December.
Van Rooyen accused the NRU of being in breach of contract for “incurring expenses in our name without our consent”.
In the letter, Van Rooyen accused the NRU of failing to pay N$140 000 to Trustco by the end of January as part of a N$228 000 loan it owed to Trustco. The sponsor insisted on the immediate settlement of the full amount.
NRU insiders who spoke on condition of anonymity said that the sponsorship deal had turned into a heavy debt burden for the cash-strapped NRU.
Accusations of over-expenditure during the September tournament and failing to “present an acceptable budget” to Trustco are also levelled against the NRU.
But those in the know say the NRU’s responsibility stopped at organising the event, and the business side of the event, such as marketing and promoting the tournament and managing the finances, was left to Trustco. Neither the NRU nor Trustco this week wanted to shed light on the current status of their relationship.
Van Rooyen said the parties were discussing the matter, adding that a statement would be issued as soon as the matter was finalised. “It is in the interest of Trustco, the NRU and in particular Namibian rugby that a practical solution be found as soon as possible,” he said.
NRU president Buks Bock said he could not say anything for now, as they were still waiting for the NRU to enter into talks with Trustco.
What lessons for the Kenya Rugby Football Union from the Namibia experience?
0 Comments:
Post a Comment