The board member, a block beside a track and the $1 land transfer

Standing in the family room of a three-bedroom home backing onto the racecourse at Bathurst as it went under the hammer, Saranne Cooke appeared as if she were any other property investor.

The Racing NSW director, who has since become the powerful organisation’s first female chair, was the sole prospective buyer at the June 2021 auction, and after the property was passed in with only a vendor’s bid, she negotiated a price of $985,000.

An overhead shot of the property at 270 Gilmore Street in Kelso.Credit: Nearmap/Michael Howard

Cooke, however, was not there to purchase the block for herself. While the property was acquired in her name, eight months later it was transferred to Racing NSW for $1.

The land deal has raised questions about whether the racing regulator should have been more transparent during the acquisition of the property.

The deal is being examined by NSW Gaming and Racing Minister David Harris after it was brought to his attention by independent upper house MP Mark Latham at a Macquarie Street parliamentary hearing.

Latham, a vocal critic of Racing NSW and its chief executive, Peter V’landys, has questioned in parliament whether the transactions meet the “impeccable standards of integrity” required by the statutory body, which operates at arm’s length from the state government but whose board members are appointed by the minister.

Saranne Cooke has been on the Racing NSW board since 2015 and became its chair last year.Credit:

Cooke, a professional director who lives in Bathurst, said she bought the block, which has a second house on it, as an agent for Racing NSW, the regulator and commercial operator of the state’s $3.3 billion thoroughbred racing industry.

In the parliamentary hearing, Latham questioned whether the transaction was an attempt to dodge stamp duty, though he offered no evidence to back up the suggestion. Cooke told the Herald stamp duty had been paid by Racing NSW.

She also said she did not receive any payment for her part in the transactions, which she said had been approved by Revenue NSW.

The property, at 270 Gilmour Street, Kelso, was among dozens that Racing NSW bought around racetracks and elsewhere at a cost of more than $125 million over the past decade.

A year earlier, in September 2020, records show Racing NSW outlaid $1.35 million for an 11-hectare strip of land with a three-bedroom house just two doors down, at 252 Gilmour Street.

It was purchased directly from the vendor, unlike the 2021 sale, when the owner and real estate agent had no idea who Cooke was really buying the property for.

“I only discovered her position with Racing NSW after the sale went through,” said Bathurst selling agent Mitchell Bestwick.

“She didn’t disclose a lot of information, but some buyers don’t. Not everyone wants to tell an agent everything. I didn’t go digging around in her history and background – I took it on face value.”

Diane Butcher, who sold the property adjoining Bathurst’s Tyers Park Racecourse to Cooke, said she “felt there was something cagey about the whole thing”.

Her uneasiness was such that she told her neighbours Cooke’s name and particulars after the sale “just in case they were approached to sell their places”.

The house at 270 Gilmour Street, Kelso, which Cooke bought in her name after an auction in June 2021.Credit: Pip Farquharson

“I just can’t understand that she took the tactic that she did instead of just being upfront,” she said.

There is nothing illegal about Cooke’s failure to disclose her connection to RNSW, and there is no obligation on buyers to offer this information. Latham, however, asked Harris in parliament if it was ethical for a board member to purchase a property and then transfer it to the organisation for which she is on the board for $1 in what he called an “extraordinary property arrangement”.

Harris told the hearing he was “not sure we can investigate ethics, but we’ll look at the whole issue”.

Racing officials had also been interested in the nine-hectare property between 252 and 270 Gilmour Street, but its owner did not want to sell.

Cooke said Racing NSW had “acted appropriately at all times” and the non-disclosure of it as the real buyer of 270 Gilmour Street was executed via a bare trust structure used to keep the identity of the “real purchaser … confidential”. According to Racing NSW, the strategy was devised to try and avoid it being run up on the price at auction.

“I received legal advice both from Racing NSW solicitors and my personal solicitor. Nothing unethical was done, as the method used is a common practice in real estate transactions,” said Cooke, who became deputy chair of Racing NSW in December 2021 before the $1 land transfer.

“Revenue NSW is the only party to whom a bare trustee owes a legal obligation to disclose details of a bare trust arrangement in such a circumstance. The relevant disclosures were made to Revenue NSW in this instance.”

She said Racing NSW paid the stamp duty on the initial $985,000 purchase when she bought it, and gained an exemption from Revenue NSW from paying a second time when the turf body took over the title.

Racing NSW acquired two properties next to Bathurst’s Tyers Park Racecourse, in 2020 and 2021 respectively.Credit: Pip Farquharson

Derwent Coshott, a senior lecturer at the University of Sydney and an expert in sale of land contracts, said the justification for using the trust appeared “deceptive”.

“The trust is a legitimate legal device used to obscure who the real beneficial owner is, but the idea it was done for confidentiality reasons is completely spurious because ultimately the property was transferred to Racing NSW,” he said.

“Confidentiality is you want to keep something private because you don’t want someone to know about your confidential affairs. For a business, it might be that you’re protecting a trade secret. But this is not about confidentiality – it’s about trying to hide something from the vendor.”

Helen Bird, a corporate governance expert at Swinburne University, said it was an unusual approach for such an entity, but there was no requirement for the real buyer to have been disclosed by Cooke as a director.

“I can’t see any particular reason to be concerned this creates a governance problem, presuming that they did make the proper disclosures and approvals of their actions at board level [and] providing the government approved the action,” she said.

Racing NSW says it has bought properties around tracks to safeguard the future of the industry.Credit:  Pip Farquharson

Neil Matthews, a conveyancing lawyer in Sydney’s eastern suburbs, said bare trust structures were sometimes used by publicity-conscious clients looking to maintain their privacy.

“I am not sure why a statutory body would use this structure, but it may have been because Racing NSW was making a number of acquisitions in the area and did not want the land-owners to gain additional bargaining power,” he said.

According to Racing NSW, it was the first and only time it had deployed such a manoeuvre to add to its property empire, and it had mostly steered clear of auctions, concerned that it would end up paying a premium.

Racing NSW has maintained it was the beneficial owner from the outset and had collected all income from tenants in the property, even though it was put on the rental market while still in Cooke’s name.

Asked whether it was appropriate for a director of a statutory body such as Racing NSW not to have been transparent with the seller, a spokesperson for Harris said the Minns government was committed to ensuring the racing industry operated with the highest probity standards.

“Racing NSW is an independent body not subject to direction of the NSW government,” the spokesperson said.

“The Thoroughbred Racing Act 1996 and Racing NSW board code of conduct include obligations for Racing NSW members regarding conflicts of interest and disclosure of pecuniary interests.

“The minister has sought advice from the department.”

Racing NSW has been busy in the property market in recent years in a plan it says has been designed to “future-proof” an industry that directly employs more than 90,000 people in the state.

Its assets include farms and blocks adjacent to racecourses, which Racing NSW says it has sought to establish a buffer from development and to protect and improve stabling and training facilities and track layouts.