“A lack of fairness, confidence and commercial morality in the ATC’s company affairs” – Racing NSW releases letter to ATC

Racing NSW has published the letter it sent to the directors of the Australian Turf Club detailing why it was putting the club into administration saying it had formed the view that the board is in a state of dysfunction and questioning the “commercial morality” in the club’s company affairs.

The release of the letter, addressed to chair Tim Hale and copied in to the three other directors, was prompted, Racing NSW chair Saranne Cooke said, by the email the ATC sent out to its members after the directors had temporarily forestalled the administration action in the NSW Supreme Court on Tuesday.

Justifying the decision to publish the original letter and distribute it to participants, Dr Cooke said that Racing NSW was left with little choice.

“The only reason we are putting this letter out is because the ATC has today misrepresented the situation in a notice to its members,” she said.

“Racing NSW will continue to act in the best interests of the NSW Thoroughbred Racing Industry and we believe that the facts in the attached letter speak for themselves.”

The long and detailed letter, which runs close to 5000 words, said Racing NSW’s concerns over the financial circumstances of the ATC did not abate during the three-month show-cause process, but rather they intensified.

In its summary, the letter was withering in its assessment of the state of the ATC.

It said that its view was the ATC board had ceased to be effective as a governing body and that the directors had fallen short of the standard that a competent board would be expected to meet.

It raised concerns over the conduct of Hale, having queried him about his dealings with independent MP Mark Latham during the Select Committee inquiry into the sale of Rosehill.

The letter said Racing NSW believed that one or more of the directors of the ATC had breached their directors duties; one or more of the directors of the ATC had failed to comply with the ATC Code of Conduct and one or more of the directors of the ATC had acted contrary to accepted standards of corporate behaviour.

The latter also described the ATC board as being in a state of dysfunction and said the relationship of trust and confidence between Racing NSW and the ATC board had broken down.

In its final view it said “there is a lack of fairness, confidence and commercial morality in the ATC’s company affairs”.

“While Racing NSW has formed each of the views identified above, it considers that any one, or combination of more than one, of these conclusions justify the appointment of an administrator,” the letter said before informing the directors that Morgan Kelly of Ernst and Young has been appointed as administrator to conduct the affairs of the ATC. 

The ATC directors sought a legal injunction against the action, which was granted pending a hearing on Thursday at 11am before Justice Slattery in the NSW Supreme Court.

In a statement on Tuesday, the ATC directors re-affirmed their position that Racing NSW does not “possess the legal authority to remove the duly elected directors of the club or to appoint an administrator in their place”.

“The reasons we are taking this (court) action are clear and compelling,” a statement issued by Hale said.

Cooke said in the participants bulletin that it was determined to prevail in its bid to put the club into administration.

“The application by the ATC directors for an interlocutory injunction preventing the administrator commencing his important work will be heard by the Supreme Court on Thursday 18 December 2025,” she said.

“Racing NSW is opposing that injunction as it believes that it is critical that the administrator commence his work to rectify the serious financial issues faced by the ATC as soon as possible and that the financial position of the ATC not be allowed to deteriorate even further.”

Among the details raised by Racing NSW in its letter to the ATC on Monday were concerns that it would be called upon to honour the club’s debt guarantees exceeding $30 million, that the ATC’s engagement of KordaMentha had been too narrow in its scope and that the ATC’s forecasts on capital expenditure were “grossly inadequate”.

It also said the ATC board had “no cogent or structured plans in place on cost reduction, revenue growth, property sales and development”.

The veracity of a proposed ATC headcount reduction of 28 employees was also questioned by Racing NSW, as was a plan put forward to save $2.5 million on IT costs.

The accuracy of cash flow forecasts put forward by the ATC was also queried as was a budgeted increase in administrative costs.

Racing NSW also raised that the ATC had told it it had $2.1 million of costs related to the Warwick Farm “Inglis contract” capital works to be paid over the next two years and that the initial $10 million sale resulted in the ATC paying $30 million to service the contract.