Legal steps are underway to regain a multi-million rand loan from the Golden Lions Rugby Union (GLRU) according to the Guma Tac group walked out on the union last year.
"We confirm that today [Tuesday] we have initiated legal proceedings to recover our loan from the Golden Lions," the Guma Tac group said in a statement.
Guma Tac, which is jointly owned by Robert Gumede and Ivor Ichikowitz, cut ties with the GLRU in June 2011, shortly before it was to have purchased a 49.9 percent stake in the union.
GLRU president Kevin de Klerk, said on Tuesday the statement was "filled with many half truths" and said the union had never been unwilling to pay back any money.
"They are entitled to pursue any kind of action, but it is their modus operandi trying to discredit us through the media," he said.
"We will defend such actions and we will let the legal process decide.
"This is absolutely nothing new for us and is an ongoing saga which began in June 2011. We find it completely deplorable and detest the manner in which this is being handled – publicly and by using the media as a battlefield”
"Using the media to gain acknowledgement and publicity in matters such as these shows a lack of knowledge of sporting ethos and codes and we find it very undignified.
"This matter will play itself out in the correct forum and we hope it can be resolved sooner rather than later so that we can finally dismiss the claims of 'bankruptcy' and 'liquidation' that have been floating around over the past few weeks."
Guma Tac said in a document leaked to the media last year that the GLRU owed the company more than R14 million in loans.
At the time, Gumede and Ichikowitz accused the Lions' executive of keeping the potential investors in the dark, preventing them from playing an active role in the union.
Guma Tac said on Tuesday the GLRU had faced "huge" financial challenges and could not pay salaries before negotiations to form an equity partnership came to an end.
"We provided the Lions with millions of rands to enable Kevin De Klerk's management to pay the salaries of the Lions' players and staff for both the months of December 2010 and January 2011," it said in the statement.
"Had the Lions failed to pay the players' salaries over this period, it would have led to the breach of players' contracts, which would have led to an exodus of key players, if not all.
"Furthermore, the loans enabled the Lions to sign top international players like Butch James and Lionel Mapoe and to pay the 24 amateur feeder GLRU clubs their GLRU grants."
Guma Tac said it had also funded the salary of Lions' conditioning coach Wayne Taylor, which was allegedly several months in arrears.
It said the GLRU had denied taking a loan from its former potential equity partner.
"This behaviour is a continuation of the bad faith which the Lions' executive... displayed in the negotiations regarding our rescue and investment in the Lions."
Guma Tac denied media reports that its lawyers had been in discussion with GLRU legal representatives regarding an arbitration agreement.
"It hurts us to have to turn to the courts to recover money that was loaned in good faith at a time when the Lions' bankers refused to extend further credit facilities and the Lions' president, Kevin de Klerk, turned to us in desperation to advance funds to pay, among other commitments, the Lions' players and staff."
De Klerk said the union had been in discussion with Guma's lawyers before the claims were made.
"It smacks of lack of understanding they have about the sport of rugby and ethos of the game. They are the ones that moved out," De Klerk said.
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The entire All Blacks apparel line has been updated for 2013/14. Check out the New Zealand All Blacks polo.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Gilbert Blitz 8S rugby cleat is a great cleat at a great price of $69.99. Get a new pair of cleats today.
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The All Blacks Performance t-shirt is black with hints of blue from the training jersey. Very Cool.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.