SA Harness Racing Club at Globe Derby Park fighting to keep its on-course totaliser betting licence
The State Government is threatening to take away SA’s peak trotting club’s gambling licence because of its financial problems.
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The state’s peak harness racing club could be stripped of its gambling licence for trading while insolvent.
Liquor and Gambling Commissioner Dini Soulio has issued a formal warning on the SA Harness Racing Club (SAHRC), demanding to know why it should keep its on-course totaliser betting licence.
Mr Soulio wrote to the club after an investigation by Consumer and Business Services found numerous indicators that showed it was insolvent, including multi-million-dollar debts, repeated financial losses, lateness paying trade creditors and failure to lodge its tax statements.
Mr Soulio is now considering the written response from the club.
In a recent update to members, club president Ann Mowday confirmed the club had obtained a private loan facility of $3.5m from a Queensland developer, Kevin Seymour, to clear its debts.
That included a $1.5m loan from Police Credit Union, which last month became the subject of a default notice, and $1.9m owed to a club member, Geoff Easom.
Mrs Mowday said the club had also put into receivership a development company that owed it $2.5m from a 2018 land deal, GIC Globe Derby Park Ltd, in a bid to recover the money.
She told members that “with hindsight, this developer has not assisted the club”.
The club was seeking the payment of more than $400,000 in outstanding race meeting fees and rent from the sport’s controlling body, Harness Racing SA, which moved last month from Globe Derby Park to leased offices at Port Adelaide.
Mrs Mowday urged members to stand for the club’s committee at its forthcoming annual general meeting following the resignation of four committee members, three of whom quit in protest over the loan negotiated with Mr Seymour, a billionaire harness racing enthusiast.
Under the terms of the 12 per cent, three-year loan, all of the land owned by the club at Globe Derby Park – recently valued at $16m – was put up as security. Interest must be paid monthly.
Mrs Mowday said the club’s former president, Richard Miller, had been reappointed to the committee to enable a quorum to be reached for meetings.
Mr Miller was instrumental in negotiating the property deal with GIC Globe Derby which saw its sole director, Michael Vidale, receive the title to 5500sq m of land without paying the full amount.
The land deal was part of the CBS investigation into the club’s long history of financial problems.
In his letter, Mr Di Soulio said a forensic financial accountant, Hugh McPharlin, of Nexia Edwards Marshall, had found the amount outstanding by GIC Globe Derby would not have been enough to clear the outstanding loans to the Police Credit Union and Mr Easom.
Mr Di Soulio said Mr McPharlin’s report found that, as at August, the club’s “circumstances match several potential indicators of insolvency”.
These included:
SAHRC had a “history of annual operating losses with little capacity for such losses to be curtailed”.
THE club was experiencing cash flow difficulties and problems collecting debts.
IT was not complying with its taxation reporting obligations.
TRADE creditors were being paid outside of normal terms.
AUDITED financial statements were “materially overstated concerning the value of the land”.
THE statements contained notes describing “material uncertainty concerning its (the club’s) continuation as a going concern”.
Mr Di Sulio said a statutory default could occur if a licensee was found to be an unsuitable person for financial reasons.
“I am of the view that a statutory default has occurred as the licensee is no longer suitable to hold an on-course betting totaliser licence on the basis of its financial position,” he wrote.
“I will consider any SAHRC submissions and determine what disciplinary action, if any, to take.
“Disciplinary action can include the suspension or cancellation of the on-course betting totaliser licence.”
A spokesman for Mr Di Soulio said it would be inappropriate to comment as the matter was ongoing.
Mrs Mowday did not respond to a request for comment.
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