ATC directors defiant as administration case is adjourned

Directors of the Australian Turf Club will remain in charge of Sydney’s sole metropolitan racing club for at least another 48 hours after the Supreme Court of NSW suspended the appointment of an administrator.

Tuesday’s ruling by Justice Michael Slattery will remain in place until the matter returns to court at 11am on Thursday.

After a three-month battle to remain independent after being issued with a show-cause notice by Racing NSW, the ATC was placed into the hands of an administrator on Monday by the state’s thoroughbred regulator.

The Racing NSW board sacked the ATC’s directors and instead empowered an administrator, Morgan Kelly of Ernst and Young, to oversee the affairs of the club which runs racing at Randwick, Rosehill, Warwick Farm and Canterbury. 

A committee would also be formed who the administrator would report to.

The decision, which Racing NSW deemed necessary because “the ATC board was unable to demonstrate it could develop and implement a strategy to improve the commercial performance of the club, or rectify the serious financial issues”.

ATC chair Tim Hale and his three fellow directors Caroline Searcy, David McGrath and Annette English sought an urgent injunction against Racing NSW’s ruling to place the club into administration.

Racing NSW’s representative Oliver Jones SC agreed at Monday’s hearing to not take any further action in the administrative process until Tuesday.

But that has been further delayed after a brief appearance between the legal representatives of the ATC directors and Racing NSW.

In a strongly worded statement issued shortly after Tuesday’s adjournment, in which the court ruled the administration be set aside until Thursday, the ATC directors reaffirmed their position that Racing NSW does not “possesses 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.

“The Australian Turf Club is financially strong and operationally stable. As of today, the club holds approximately $29 million in cash and continues to meet all financial obligations as they fall due. 

“Our balance sheet is supported by more than $400 million in land and property assets, including strategically significant holdings at Canterbury and Camellia, both of which have substantial long term value, particularly with appropriate rezoning approvals.

“It is also important for members to be aware that Racing NSW currently owes the Australian Turf Club $1,208,218.20 in outstanding payments, of which $799,467.70 is more than 120 days overdue. This amount remains a receivable of the club.”

Racing NSW sent a notice to participants on Tuesday afternoon, which included a copy of the original letter sent to the ATC on Monday.

“The only reason we are putting this letter out is because the ATC has today misrepresented the situation in a notice to its members,” the notice authored by Dr Saranne Cooke, Racing NSW chairman, 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.”

In the days preceding Racing NSW issuing the show-cause notice, the ATC board sacked its chief executive Matt Galanos and put Steve McMahon in his place in an interim capacity.

Member-elected director Ben Bayot resigned, citing his concerns about the club’s financial future, while independent director Natalie Hewson also quit.

Neither their positions, nor those of former chairman Peter McGauran, have been replaced, with the ATC prevented from further appointments while the show cause notice was in place. 

In Tuesday’s statement, the ATC directors said they had sought approval from Racing NSW to appoint a member-elected replacement for Bayot, which “has not been granted”.

“Throughout the show cause process, the ATC engaged openly, constructively, and in good faith. We provided detailed written submissions, extensive financial and strategic material, and independent expert advice addressing each issue raised by Racing NSW,” they wrote to members. 

“The board unequivocally rejects any suggestion that it has failed to develop or articulate a coherent and credible strategy for the club’s future. The board is firmly committed to defending the independence of the Australian Turf Club.

“The Australian Turf Club exists for its members. Your Membership rights, voting entitlements, and voice in the future direction of the club are fundamental.”