The Free State auditor general says contracts to stage events at the Phakisa Raceway, such as the MotoGP, were in all likelihood not legally binding as there was no Board to run the track.

The Free State auditor general says contracts to stage events at the Phakisa Raceway, such as the MotoGP, were in all likelihood not legally binding as there was no Board to run the track.


CARtoday.com reported on Friday that Phakisa had cost the province nearly half a billion rand over five years for a return of just R7,7 million. This led the Free State government’s Public Accounts Committee to launch an investigation into the finances of the Raceway, in Welkom, and its former CEO, Bobby Hartslief.


With no board, as required by law, the legality of all contracts, salaries and deals with the management of Phakisa Raceway since 2000 is in question.


Webster Mfebe, the MEC responsible for Phakisa, walked out of the legislature after the motion for a forensic audit and special investigations unit probe was tabled.


Later interviewed by SABC, Mfebe said he was currently fulfilling the duties of the board and legislation had been passed allowing him to do this until a board had been appointed.


The Free State auditor general (AG) says the forensic audit is ready to look at why the track had to be resealed after only four years of usage, questionable tax payments of over R1 million, the massive gap between expenditure and income and the granting of TV rights for the grand prix.


Another worry is that contracts and tariffs are still being approved despite Phakisa having no Board. Ben van Niekerk, the auditor general, says the activities are still going on and "because there is serious doubt as to the legality of these contracts and tariffs, what will happen if there is an accident and claims are made?"


Van Niekerk says it's not only the public accounts committee who are raising questions: "We are getting lots of allegations from the public about Phakisa, they are being treated as confidential until they are investigated but they include some very serious allegations."


The AG will also investigate claims by GP rights holders Dorna that the contract to host the 2004 GP is valid. And who will pay the licence fee of over R36 million, as the Free State government has refused to foot Phakisa’s bill any longer?


Meanwhile, Bobby Hartslief, the former CEO of the Phakisa Raceway, said he would assist in the investigation. Hartslief, who stepped down a few weeks ago, earned an annual salary of R532 000 despite moving to Colorado Springs in the USA in 2000.


He resigned as CEO of Phakisa last month after testifying before the public accounts committee. He added that Phakisa was a Free State government creation and they must do whatever they feel necessary to resolve unanswered questions.

Original article from Car