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Fiji Government pays NZ$6m to own 51 per cent of Drua
By Chris Jones
Fiji Attorney-General and Economy Minister Aiyaz Sayed-Khaiyum has explained why the Government has invested NZ$6m for a 51 per cent stake in the Fijian Drua Super Rugby franchise.
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Sayed Khaiyum told Parliament the New Zealand Rugby (NZR) did not want Super Rugby teams run by the rugby union of a particular country while another compelling reason was to ensure any failure of the franchise would not impact on the Fiji Rugby Union.
The Fiji Times report Sayed-Khaiyum said the NZR required an independent entity which led to the formation of Counter Ruck Pte Ltd, which owns and operates Fijian Drua.
Sayed Khaiyum said one of the conditions was it required a minimum of $NZ3 million equity or debt. “The rationale, of course, was to set up a separate private company to keep the financial affairs of the rugby union away from the team that is going to participate in the Super Rugby competition, because of any financial failures that may occur.
“Because these competitions are extremely expensive and if it is going to put additional burden to the rugby union, we could have the entire structure within that individual country collapse. That is why they have to keep that as separate entities.”
When Counter Ruck sought the government to fund the Drua franchise, Sayed-Khaiyum stated the government couldn’t award a grant to a private corporation because taxpayer dollars were involved. After seeing the economic benefits of a Fijian club competing in Super Rugby, he said the government chose to become an equity owner.
“We also saw the economic advantage in terms of the competition and how Fiji of course is going to be the home base for Drua, at least not now but later on it will be. We saw the economic benefits and we also know rugby is a very, very important part of our national psyche,” said Sayed-Khaiyum.
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“We then said that we could become an equity holder. In that way we could actually give the $6 million but in return get shares for it as we do in other companies.
“So which is what we have done and as a result of which we get 51 per cent of Counter Ruck, we have already disbursed $3 million, the second lot of $3 million will be disbursed by December, 2022.
“We have said that in time to come, the Government could of course divest its shares, get back its money but what we would have done would have had the Drua team up and running and a good company will be running it too.”
