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 principally through actions more or less voluntarily undertaken from within the industry through leadership shown by the racing controlling authority. While it is unfortunate for some that their roles in racing have ended earlier than they had hoped, the good news for racing is that lessons have been learned. It is also good for racing that no formal intervention by the institutions of the State was necessary to resolve the situation. As this report documents, what started as a potentially simple exercise of questioning the key players (including the new board members) with a view to approving a new board became an extended process as incidental matters became more significant. In the end, this lengthy process has yielded useful understandings and, in addition to approving the new board (formalised in May 2009), the Authority now has a sound basis for the regulatory process it will undertake and for recommendations to the Government. These findings and conclusions, and the facts on which they are based, are set out below. 2. INTRODUCTION 2.1 What this inquiry was about The Authority conducted this inquiry to allow it to have a proper evidence base for decisions about the suitability of the 9 members elected to the board of South Australian Jockey Club Inc, a racing club licensed by the Authority, at a special election held in April 2009. This election resulted from a “spill” of the board occasioned by the outcome of events arising from settlement of litigation between the SAJC and one of its board members, Bill Spear. On Mr Spear’s application, the Supreme Court of South Australia had injuncted the SAJC from announcing, at its 24 November 2008 annual general meeting, the results of the routine board elections for that year. In the hearings which followed the grant of the injunction, the Supreme Court heard allegations of irregularities in the recruitment of members to the SAJC in the second half of 2008 and in the manner in which those new members exercised their votes in the 2008 election. The matter was concluded by a settlement brokered by TRSA, the racing controlling authority for horse racing, under which the SAJC agreed to the commissioning of an independent report into the allegations of irregularities and to take such steps as might be recommended in that report. The report was undertaken by Adelaide law firm Lipman Karas. The Lipman Karas report identified a number of irregularities in the recruitment of young SAJC members and other shortcomings of corporate governance. Its recommendations, endorsed by TRSA, included the dismissal of the SAJC’s then CEO, Steven Ploubidis, the retirement from the board of its chairman, John Naffine, and its vice chairman, Travis McLeay, and fresh elections for all 9 seats on the board. 2
Inquiry into the suitability of certain close associates of the South Australian Jockey Club Report Under the SAJC’s licensing arrangements (described in more detail below, at page 4), the election of board members is subject to them being approved by the Authority. The approval criterion is suitability. In the normal course, this process routinely involves a police check and, should anything be noted, an interview. However, noting the circumstances in which the 2009 election had been called, the involvement as candidates of a number of people who had been candidates at the 2008 election and some continuing controversy over the election process, the Authority determined to hold an inquiry to enable it to form a view as to the suitability of those elected. The Authority made this determination prior to the completion of the electoral process. Following examination of the candidates elected and the principal actors in the events of 2008, the Authority had sufficient evidence to enable it to approve the board members-elect (as explained in the conclusions section on page 69). This approval was advised to the SAJC on 15 June 2009, 6 weeks after the election result was announced. This has enabled the new SAJC board to move on with its normal business processes in a timely way. As some matters which became apparent in the course of the examinations required explanation before the Authority could acquit its statutory responsibility to report, further examinations were conducted. The Authority has concluded the inquiry process by the delivery of this report to the Minister for Gambling on 23 July 2010. 2.2 Statutory background—report of exercise of inquiry powers In the legislative scheme for commercial gambling in South Australia, particular forms of commercial gambling are authorised by individual statutes with regulatory functions being undertaken by the Independent Gambling Authority and the Liquor and Gambling Commissioner. The Authority is established under the Independent Gambling Authority Act 1995 which, in addition to setting out its functions and powers, gives it certain coercive evidence gather powers. These are extracted in Appendix B. The powers include the ability to require people to attend under summons for the purpose of giving evidence under oath or affirmation. Those giving evidence must answer the Authority’s questions, even when the answer might tend to incriminate or when it would require the disclosure of information otherwise protected by legal profession privilege. (When privilege is claimed, the answers cannot be used in other proceedings.) Similar powers are available to commissions and boards of inquiry, as well as to the Authority’s regulatory counterparts in other jurisdictions. They enable the Authority to require people to disclose things which a court would not require in civil, administrative or criminal proceedings. The existence of these powers means that, in the event of their being a conflict between the public interest in the proper regulation 3
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