‘A whole heap of spin’: Moves to oust rugby directors in Rebels fallout

Suburban rugby clubs have banded together in a bid to oust most of the Rugby Victoria board as the fallout from the collapse of the Melbourne Rebels continues.

Rugby Victoria directors who approved a $400,000 loan to the now-defunct Rebels – which the grassroots clubs claim endangered the future of the sport in the state – will face a vote of no confidence after the clubs forced a special general meeting.

The Rebels form a huddle at the end of their final Super Rugby game.Credit: Getty Images

A letter sent to Rugby Victoria president Elizabeth Radcliffe and interim CEO Anthony Wright on Tuesday, and obtained by this masthead, calls for a meeting to “test support for the members of the Rugby Victoria board”. It names current directors who were on the board at the time of the decision to lend $400,000 to the Rebels in the weeks before it entered voluntary administration.

The letter was signed by five clubs – the required number to trigger a special general meeting where a vote of no confidence can be put to members. Those clubs are the Brimbank Bucks, Casey Crusaders, Melton Warriors, Racing Rugby Melbourne and Wyndham Rhinos.

The Melbourne Rebels played their last game in Super Rugby last weekend after Rugby Australia rejected a rescue deal put forward by a consortium led by former Qantas chair Leigh Clifford.

Wyndham club president and letter signatory Ean Drummond told this masthead on Wednesday the clubs had longstanding issues with Rugby Victoria – the governing body for rugby in the state –which had been exacerbated by the collapse of the Melbourne Rebels.

What the letter from rugby clubs says

• “The directors unanimously voted to loan $400,000 to the Melbourne Rebels (in addition to the monies already owed) and have put the future viability of Rugby Victoria in jeopardy.”
• “That there is no clarity as to the status of the Centre of Excellence, its funding, nor, if and when, it will be complete. Nor is there clarity on implications of loaning money granted for the Centre or Excellence to the Melbourne Rebels which breaks Grant Guidelines.”
• “That the Directors of Rugby Vic, as the Shareholder of the Melbourne Rebels, were seemingly unaware of the financial state of the Rebels despite numerous press reports as the dire financial situation. It was their responsibility to be aware of the situation.”

Source: June 11 letter to Rugby Victoria bosses

“There’s just been a whole heap of spin and lack of transparency [from Rugby Victoria]. It’s purely on the strength of the volunteers, the parents and the players to grow the grassroots game,” he said.

The four other club signatories either did not respond or declined to comment.

It is not the first time Rugby Victoria has faced scrutiny. In February, this masthead revealed the governing body had not filed annual reports to the consumer regulator since 2018, despite being legally required to do so.

Rugby Victoria had been the sole shareholder of the Rebels since 2017 until it entered voluntary administration in January. Administrators from auditing giant PwC went on to find the Super Rugby club had a
$23 million debt bill, with just $17,300 in the bank and a handful of assets.

The letter sent on Tuesday claimed the $400,000 loan has “put the future viability of Rugby Victoria in jeopardy”. It is tipped to get back just a fraction of the loan.

The letter also blamed Rugby Victoria for a “lack of clarity” around the use of funds for the ongoing construction of a Rugby State Centre for Excellence, and for being “seemingly unaware” of the Rebels’ dire financial state despite media reports.

Asked about the loan last month, Rugby Victoria president Radcliffe – who was elected to the position in March – said in a statement to this masthead: “Rugby Victoria formally loaned the Melbourne Rebels $400,000 to pay club staff and player wages just before Christmas.Two hundred thousand dollars of the loan was repaid within days, and we anticipate the remaining amount will be repaid in full.

“The amount that is owing will be covered, in part, by the [Deed of Company Arrangement] and any remaining amounts will be dealt with in consultation with the consortium. Once any shortfall is quantified, RV will need to cover that amount by fundraising and is in preliminary discussions about this.”

But three rugby sources, who declined to be named because payments to creditors have not been finalised, claimed Rugby Victoria may be forced to hand back the $200,000 repayment, if it is found to be what administrators term a “preferential payment”.

The Rebels owe Rugby Victoria $312,000. Under the terms of the DoCA, it will recover about $47,000 of that amount. However, if Rugby Victoria is forced to hand back the repayment, it will be owed a total of $512,000, and will recover around $76,800 of that.

The Rugby Victoria board did not respond to questions sent by this masthead, or the allegations outlined in the letter, but released a statement: “Rugby Victoria recently received a request for a Special General Meeting from five of our community clubs. We will be discussing the matters raised therein with all our members and we will respond appropriately in as short a timeframe as possible.”

Drummond, who has run Wyndham since it switched from rugby league to union in 2004, said Rugby Victoria must be held to account.

“Us clubs who are members of Rugby Victoria should have been more assertive, rather than rely on these people. We should’ve asked harder questions years ago. If we weren’t getting reports properly, we should’ve made demands to demand transparency. The clubs have a certain role to play to ensure the transparency to run its course,” he said.

“Victoria does need and deserve an elite rugby union team. But it needs to be run right and not the way it’s been run previously.”

Rugby Victoria did not respond when asked whether it would be forced to hand back the $200,000.

A Rugby Victoria spokesperson disputed the date of the meeting when the loan was approved. The letter claimed it was approved at a general meeting on November 20, but the spokesperson said the decision was made in December.

According to the administrator’s report, November 20 was also the day the tax office hit Rebels directors with director penalty notices amounting to $7.8 million of unpaid tax debt.

DPNS are orders that make directors personally liable for the tax debts of the companies if they go unpaid. The administrator’s report, handed down in April, outlined that total liabilities owed to the ATO have ballooned to $11.8 million.

Rugby Victoria and the Rebels operated under two separate boards. However, then-RV president Neil Hay and director Owain Stone also sat on the Rebels board.

The pair did not seek re-election in March.

Asked about the loan, Stone told this masthead: “I recall we recused ourselves whilst the final discussion and vote was held.”

Hay did not respond to requests for comment.

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