Financially troubled SA Harness Racing Club pays thousands on consultant to secure $2 million loan
The state’s peak harness racing club has paid a consultant $6000 a month to secure a loan of $2 million – despite already owing $3.1 million and facing insolvency.
North & North East
Don't miss out on the headlines from North & North East. Followed categories will be added to My News.
- Special report: How Globe Derby Park got in so much strife
- How to make the most out of your Advertiser subscription
The cash-strapped operators of Globe Derby Park have been paying a consultant $6000 a month and have secured a $2 million loan while facing insolvency over debts of $3.1 million.
SA Harness Racing Club (SAHRC) members were due to vote on the loan at a special general meeting last week, which was deferred because of an official investigation into president Ann Mowday.
Four members of her committee complained when Mrs Mowday called the meeting without their authority before using a public relations agency to release a brochure and video attacking harness racing’s peak body.
Mrs Mowday used the material produced by Hughes PR to accuse Harness Racing SA of trying to put the SAHRC into voluntary administration while owing $359,000 in outstanding race meeting fees and rent.
She also told members the club had obtained a loan of $2 million at 12 per cent interest from a private investor which could be used to recover $2.4 million owed by a property developer.
GIC managing director Michael Vidale had been given until March 27 to pay the money for a block of land on Port Wakefield Rd he bought from the club in 2018.
Mr Vidale was given the title to the land before making full payment after the club rejected another offer of $5 million in cash from Peregrine Corporation, owners of the OTR chain.
The land is near a site where the SAHRC wants to develop a new entertainment complex, despite losing $4.6 million over the past five years through its existing facilities.
The club has been working with a consultant, Hospitality Management Team Pty Ltd, for several years to develop a proposal for a new gaming and hospitality venue.
Under the terms of a formal agreement obtained by The Advertiser, the consultancy’s director, Bill Cochrane, has been paid $6000 a month since last July.
Mr Cochrane, a former Central District footballer, was instrumental in negotiating the club’s new loan, which involves putting up most of Globe Derby Park as security.
His agreement – signed by former club president Richard Miller and Mrs Mowday – states that he must be paid a lump sum of $40,000 if the club is put into voluntary administration.
In her video and brochure, Mrs Mowday urged members to block any move by Harness Racing SA to have an independent manager appointed.
“Let me be clear, if the club is placed into voluntary administration you, as members, lose all control of the future of your club,” she said.
“Decisions will be made by an external administrator whose first responsibility will be to creditors including financiers.
“The ongoing viability of harness racing at Globe Derby Park will come a distant second.”
Mrs Mowday said one of the club’s biggest creditors, Police Credit Union, already had said it would exercise its rights over its assets if voluntary administration proceeded.
“A likely scenario would be the sale of some or all land at Globe Derby Park,” she said.
Mrs Mowday said there had been “significant misinformation, largely spread by Harness Racing SA” about the club’s financial position.
“As can be seen from our financials, if we push for payment from those who owe us money we can have a clean slate and focus on the future of racing at Globe Derby Park,” she said.
Mrs Mowday did not respond to requests for comment.