Skip links and keyboard navigation

    Media Statements

    Coat of ArmsMedia Release
    Minister for National Parks, Recreation, Sport and Racing
    The Honourable Steve Dickson

    Auditor-General releases Racing Queensland audit

    Minister for National Parks, Recreation, Sport and Racing
    The Honourable Steve Dickson

    Tuesday, July 10, 2012

    Auditor-General releases Racing Queensland audit

    The Auditor General’s report released today into separation payments made to four top Racing Queensland Limited (RQL) executives again showed the former Labor Government’s contempt for the racing industry.

    Racing Minister Steve Dickson said his initial reading was that serious questions were raised by the conduct of the former RQL Board, which included Labor’s handpicked racing Tsar Bob Bentley and AWU boss Bill Ludwig.

    “What we know is that in August 2011 the former Board of RQL agreed to alter the employment contracts of four of RQL’s top executives, including the addition of a ‘material adverse change’ clause and a 30 per cent salary increase,” Mr Dickson said.

    “On 26 March 2012, just two days after the state election all four executives resigned as employees of RQL, receiving separation payments totalling $1.858 million, including 14 month’s salary, redundancy payments, and their statutory leave entitlements.

    The Auditor General has concluded that:
    “The Board’s stated rationale for these contract variations was that they were required as a retention strategy for the four executives. This strategy proved to be ineffective in all but the short term, and cost RQL $1.458 million. A significant proportion of this cost is directly attributable to the 30 per cent increase in remuneration of each of these four executives that was also approved by the Board in August 2011.
    The inclusion of the ‘material adverse change’ clause changed the stated retention strategy into an exit strategy for the four executives. Taken together with the substantial increase in remuneration of the four executives, it is not evident that this approach was entirely consistent with the fiduciary duty of board members and company officers to act in the best interests of the company. The Board did not seek to obtain surety in this regard, despite the fact that it was raised as an issue for the Board to consider. It also failed to document key consideration that led to its decisions. At best this reflects poor governance practice.”
    “There can be no doubt that the RQL Board put in place extraordinarily favourable employment arrangements that delivered these executives the sweetheart deal of the century, a collective payout of $1.858 million upon their voluntary resignations.”

    “At a time when the racing industry was on its knees this money could have been used in any number of ways.”

    Other serious issues raised by the Auditor General included:

    • The executives getting a 30 per cent pay increase in remuneration with no independent benchmarking undertaken by the Board as to the reasonableness of the increase.
    • Retention payments for the four executives were not linked to the achievement of specific performance targets.
    • Two executives who stood to benefit financially from the change in their employment conditions were actively involved in the process. This clear conflict between their personal interest and the interest of the company was not satisfactorily addressed by the Board.

    Mr Dickson said the Auditor-General found little evidence in RQL’s Board minutes that the responsibilities of directors under the Corporations Act 2001 were actively considered by board members, particularly the requirement to act in good faith and in the best interest of the members of the company.

    “It is clear from the Auditor General’s report that the RQL Board acted with little regard for its fiduciary duty,” he said.

    Mr Dickson said that this sorry state of affairs was the direct result of the former Labor Government’s poor and reckless mismanagement of the racing industry.

    “The former Labor Government totally outsourced all responsibility for racing in Queensland, creating an environment in which the shameful events were allowed to occur,” he said.

    Minister Dickson said that the government was currently considering its position and would make further comment once it had fully digested the report’s findings.

    [ENDS] 10 July 2012

    Media Contact: Anna Hilton 0408 191 192