The Cape Town Club, one of SA’s oldest “gentlemen’s” clubs, is facing financial ruin against a backdrop of internal ructions.
|||Cape Town - The Cape Town Club, one of the country’s oldest “gentlemen’s” clubs, is facing financial ruin against a backdrop of internal ructions.
And in a last-ditch bid to save it, on Monday night members will vote on whether to pay a levy of between R37 500 and R48 400 (depending on the membership grading), according to an internal memo which describes the club as “hopelessly illiquid”.
If the 121 paid-up members don’t agree to the increases, they will then vote on whether to sell Leinster Hall, its national monument home in Gardens, to a buyer who will allow them to continue leasing the premises.
The club’s precarious financial situation was detailed in a letter to members. In the tradition of “a gentleman never tells”, the letter was marked as private and confidential. It makes it clear it presents “a picture of a bleak house”.
The club’s membership fees for 2013/14 have already been spent. And with an overdraft of R200 000 and short-term loans from members totalling R1 million due shortly, as well as a monthly shortfall of R150 000, the club requires nearly R3.8m to stay afloat. The premises need repairs of about R2m.
According to the memo,
the club, formed by a merger of the City Club (founded in 1878) and the Civil Service Club (founded in 1858), and inaugurated by then-Reserve Bank governor Tito Mboweni, is in “the worst financial position ever in its long history”.
Describing itself nowadays as being “fully integrated”, with “no special rules or categories of membership for female members”, the club counts among its members the former leader of the opposition, Colin Eglin, who is the club’s president; Clive Keegan, a former Cape Town mayor who is an ex-chairman of the club; Cape Town mayor Patricia de Lille; foreign consuls and ambassadors; as well as military officers and professionals.
The club’s first black member was the then-minister of foreign affairs, the late Alfred Nzo, and its honorary members include former presidents Nelson Mandela and FW de Klerk, Archbishop Emeritus Desmond Tutu, and Western Cape premier Helen Zille.
According to the letter to members, there is concern that if the hefty levy is agreed, it may send more members fleeing, leaving those who remain with an even higher bill, along with substantially hiked membership fees. The most popular membership category is likely to cost R23 000 next year.
The club, it appears, is a house divided.
The letter blames the dire financial crisis on years of membership fees that were too low, allowing the wrong sort to join – a “subversive and disruptive group of people who evidently neither understood the ethos of our club, nor were they loyal enough to sustain their membership in the face of a more apt level of subscription”.
The letter also refers to “major management disruptions” caused by a “group of dissident members who incessantly and antagonistically slagged off the club’s general manager, its board members and many ordinary members”, and who “wished to take over the club for their own purposes”.
It says this group “distracted” the board from the financial crisis last year, and then voted against a proposal to increase fees by 30 percent. In addition, it accuses the group of launching a campaign to spread “hindering misinformation to anyone who would listen – even to non-members”.
An ex-chairman of the club, Business Report Cape Town bureau chief Donwald Pressly, said he was among those who voted against the fee increase last year.
For that, he said he had been “severely punished and vilified for being a whistle-blower”.
“We warned nearly a year ago that the business model was unsustainable. It now looks like the building will be sold. I now smell a very stinky rat. Who is it, one must ask, is going to benefit from the process?”
He and another member, corporate governance expert Martin Hess, had sent an e-mail detailing their concerns to members. They used a year-old membership list which included some former and lapsed members.
As a result the two were suspended, and have since resigned from the club.
But not before the club’s attorney accused Pressly of being “deviant” for entering the club’s premises during his suspension.
Asked to comment, Cape Town Club board chairman James Sedgwick said the club was private, and that its correspondence had been marked private and confidential. If he did make any public comment, it would only be after tomorrow’s meeting, he said.
“It is up to the members to decide. Anything can happen in a private meeting of members.”
Air of luxury turns out to be a thin veneer
THhe Cape Town Club has a reciprocal arrangement with similar establishments abroad and elsewhere in South Africa, such as the Johannesburg Country Club, the Inanda Club, the Durban Club and the Kimberley Club.
The club’s walls are hung with portraits of prominent South Africans of yesteryear and memorabilia; the library boasts a collection of Africana; and many a cabinet minister has discreetly briefed club members on matters of national import.
Members, clad in the relaxed dress code of “elegant open-neck lounge shirts and tailored slacks” get to network in the Great Room, which has a “Rhodes bar”, and a lounge opens on to a generous-size veranda overlooking a garden. Until recently members and guests were served by a barman, Johannes Sethole, who recalled serving Jan Smuts.
But the air of timeless luxury has turned out to be a thin veneer as membership has dwindled from more than 500, and money has become scarce.
Weekend Argus