SAJC--report of inquiry into suitability of close associates - Portellos ...

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Inquiry into the suitability of certain close associates of the South Australian Jockey Club Report Mr Spear explained that, while he regarded some of the decisions as being quite good, he was uncomfortable with the process. In his view, some of the propositions accepted by the board had been poorly researched and lacked economic evaluation. Concerning the CEO’s contract, Mr Spear said that he had requested it in a board meeting and Mr Naffine, rather than putting the matter to a vote, had simply stated that he had signed a confidentiality agreement which he was not prepared to break. Mr Spear said that the late Mr Le Poidevin also asked for a copy of the contract, or to view it, and that this also was denied. Mr Spear affirmed that at no stage were any of Mr Ploubidis’ employment conditions, including his remuneration, disclosed to him or to the board generally. When told that Mr Naffine had given evidence that a decision had been made to disclose the remuneration number, Mr Spear indicated that this had not been done. On Mr Spear’s account, the closest he came to having any of the employment conditions disclosed was at a finance committee meeting where Mr Naffine referred to a 5% salary increase (in July or August 2008) taking the salary from $213 000 to $223 000. Mr Spear told the Authority that he first became aware of a young SAJC member recruitment drive at the September 2008 board meeting at which he noted a large number of people proposed for membership. Although a general statement had been made at earlier meetings about the need to improve membership numbers, he described it as “very, very general”—direct recruitment activity was not discussed. Mr Spear was not asked to sponsor any young SAJC members and he was not, at the time, aware of any other board member being asked to sponsor young SAJC members. He explained that he became aware of recruitment activity when he had been provided with a copy of the Lipman Karas Report. This occurred at a special board meeting. At that meeting, he read the whole of the report, cover to cover, as did Mrs Forrester-Jones. He was aware that fellow board member Bill Crabb had not read the report in its entirety (he had left the meeting to go to a yearling sale). He was unable to say whether Messrs Naffine and McLeay had read the report in its entirety. Mr Spear was asked about his raising of concerns with the membership approval process in February 2006. Those concerns arose out of him offering to assist one of his staff in nominating her son for membership. Mr Spear noted, when downloading the membership application, that there was no place for the proposed member to sign. Following the matter being raised by Mr Spear, arrangements were made for Mr Peter Pedler to brief the board. Mr Spear believed that following that briefing changes were made to the membership application process. Mr Spear was asked about the concerns he had with respect to the CEO’s ownership of shares in The Rewards Factory Limited. He explained that a friend had drawn his attention to a prospectus issued by The Rewards Factory, in which he noted that one of the top 20 shareholders was the S Ploubidis Superannuation Fund. He referred the matter to Mr Naffine, who in turn referred it to lawyers Minter Ellison. The Rewards Factory had been contracted to provide loyalty services to the SAJC. Mr Spear explained that his concern was to be satisfied that the CEO’s personal 24
Inquiry into the suitability of certain close associates of the South Australian Jockey Club Report superannuation fund had paid for shares in The Rewards Factory with its own money. He was also concerned to ensure that there was accurate reporting of related party transactions in the SAJC’s annual accounts. Mr Spear told the Authority that Mr Naffine, having received advice from Minter Ellison, had expressed the view that it had been unwise for Mr Ploubidis to acquire the shares, but that this was not completely illegal or in contravention of the Associations Incorporation Act. Mr Spear was asked what he knew of arrangements made between the CEO and Mr Naffine for Mr Ploubidis to be paid out his long service leave. Mr Spear stated that this transaction was never considered by the board. Mr Spear explained that he had become aware that payments of approximately $30 000 in aggregate had been made to Mr Ploubidis. His first concern was that these payments had not been reported to the finance committee or the board under an internal control process which required all payments in excess of $10 000 to be reported. Mr Spear had become aware that three separate cheques had been drawn in favour of and cashed by Mr Ploubidis. When he queried the purpose of the payments with Mr Naffine, he was advised that the payments had been in respect of long service leave, at the request of Mr Ploubidis. Mr Spear told Mr Naffine that it was illegal to pay out long service leave for an employee of less than 10 years service and Mr Naffine then sought legal advice, which concurred with Mr Spear. Mr Spear suggested to Mr Naffine, and Mr Naffine accepted, that the advances to the CEO should be formally identified as a loan secured against the long service leave entitlement. Mr Spear asked Mr Naffine to have this formally resolved by the board; Mr Naffine refused to do so. It was put to Mr Spear that, when asked about these matters, Mr Naffine had been certain that the board had considered the matter and that, if Mr Spear did not recall this, Mr Spear must have been asleep in the meeting. Notwithstanding this, Mr Spear was clear to the Authority that he had requested that the matter be dealt with by the board and that the chairman had refused the request. Mr Spear told the Authority that, following the March 2008 board meeting at which Mr Ploubidis had been reprimanded over the Rewards Factory matter, Mr Ploubidis had spoken with the late Mr Le Poidevin who, according to Mr Spear, had expressed great concern as to his personal safety as a result of that conversation. When asked why Mr Ploubidis might speak to Mr Le Poidevin in such a way, Mr Spear observed that, in the board discussion over the Rewards Factory matter, Mr Le Poidevin (who was a lawyer) had quoted a number of legal requirements relevant to the matter and that Mr Ploubidis would have seen Mr Le Poidevin as an ally of Mr Spear. Mr Spear indicated that he believed that he would not be intimidated were Mr Ploubidis to have spoken to him in the way he believed he spoke to Mr Le Poidevin. Mr Spear was asked about an observation, in the Lipman Karas Report, that he might have been so concerned with catching the CEO that his obligations to guide and monitor the SAJC may have been overshadowed. Mr Spear responded that he 25
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SAJC--report of inquiry into suitability of close associates - Portellos ...

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