IHRB staff at work at the races© Photo Healy Racing
Last Thursday morning’s Public Accounts Committee (PAC) hearing into the circumstances that led to Denis Egan, the former CEO of the Irish Horseracing Regulatory Board (IHRB), receiving €142,000 more in early retirement payments than the maximum allowed under the scheme he availed of was overshadowed by new revelations from his successor, Daragh O’Loughlin.
O’Loughlin dropped a bombshell in his opening statement when he revealed that in the course of preparing for the PAC meeting he had “become aware of a hitherto unknown issue that occurred in early 2022 which caused grave concern.”
O’Loughlin had met with a number of his senior colleagues in the IHRB on Monday afternoon at 4pm to prepare for Thursday morning’s PAC hearing. At that initial meeting it was decided to reconvene at 10.30am on Tuesday morning to pull together all the information that would enable himself and his team to answer any anticipated questions at the PAC hearing.
10 minutes into the Tuesday morning meeting, at 10.40am, O’Loughlin became aware of something (financial in nature) in the IHRB’s 2022 accounts that set alarm bells ringing. He immediately brought it to the attention of the Audit & Risk committee and the board of IHRB. He then contacted the Controller and Auditor General’s office, followed by Suzanne Eade, CEO of Horse Racing Ireland. The Dept. of Agriculture, Food & Marine was also brought up to speed.
On Wednesday the Board of the IHRB met and took legal advice on the matter. The board of the IHRB then commissioned a full review of the matter to be conducted by an independent firm.
In advance of Thursday morning’s PAC hearing Donal O’Shea, the IHRB’s Chief financial officer, in that position since February 2017, “went on a period of voluntary leave.”
Daragh O’Loughlin would not reveal any more details at the PAC hearing into this “grave matter” as he didn’t want to prejudice the outcome of the subsequent independent review into the matter.
We did glean a few more snippets at the PAC hearing. Suzanne Eade of HRI said about this “awful time for the IHRB” that she doesn’t believe from what she has so far heard of the matter that any public funds were misappropriated.
Considering 90% of the money that goes through IHRB’s books annually is public funds provided by HRI it would seem logical to conclude from Suzanne Eade’s interpretation of the matter that no money at all was misappropriated.
O’Loughlin went a fraction further when interviewed on RTÉ TV at the Curragh races on Saturday when stating that this “serious enough issue that did cause me a lot of concern” is relating to financial accounting and financial governance, “but what we are quite clear on at this stage is that we don’t believe there’s any misappropriating of public funds or it’s not a matter of any personal gain.”
It has also been revealed that Irish tax consultants, Mazars, on a recommendation from HRI, will carry out the financial review of the IHRB accounts that led to this issue.
So, what on earth could O’Loughlin have discovered in the 2022 accounts? And more importantly, if no public funds are involved and no one made any personal gain from this matter, how can it be of such “grave concern.”
It’s also hard to fathom how something that “related to governance around financial transactions” didn’t in some way result in someone or some entity making a gain.
Anyway, it will be quite some time before we finally get clarity on this extraordinary matter, so in the meantime it is worth focussing on what we do actually know about the financial governance, or the lack of it, at the IHRB.
On 11 May 2021 HRI agreed to extend an early retirement and voluntary redundancy scheme it had in place to cover its own staff, to also include those working in the IHRB. HRI would pay for any IHRB staff that availed of the scheme. This in itself seems an unusual step considering that HRI is a semi-state body and IHRB is an independent company, but as 90% of IHRB income is derived directly from HRI funding, perhaps it did make some sense.
This decision to extend the scheme to IHRB would have presumably taken place on foot of high level discussions between both organisations when a business case would have been submitted by IHRB. One would imagine the CEOs of both organisations were fully aware of these discussions, if not actively involved in them.
Exactly one month after the scheme was opened to IHRB staff, Denis Egan, the then CEO of IHRB, himself applied for the early retirement package. What is interesting here is that at least 6 members of IHRB staff applied to avail of the scheme, but at least 2 were rejected. A further 3 were approved for Voluntary redundancy, and Egan was approved for the early retirement package.
It seems strange that the CEO of the organisation would not only be one of the first to apply, but also have his application approved when others were rejected.
The application was made during a time when the IHRB was under unprecedented scrutiny following accusations by trainer Jim Bolger that the use of illegal drugs were widespread within the sport.
Whatever about the timing of Denis Egan’s departure, we do know that he walked away with a whopping €142,000 more than he should have under the terms of the scheme.
He trousered 58% more than he was entitled to under the rules of the scheme thanks to a top up payment made by his former employer the Turf Club. He hadn’t been in their employment for 5 years at this point.
I could understand Denis’ old mates at the Turf Club doing a whip around when they heard he was retiring to get him a new set of golf clubs, or a flat screen TV, but coming up with an amount that appears to equate to one year’s salary plus employers’ contributions is difficult to get your head around.
Bad and all as this payment looks, it wasn’t even given directly to Denis Egan as a parting gift. Instead the Turf Club paid the amount of €142,000 directly to his employer, the IHRB. The IHRB then added the money to his official early retirement payment of €243,000, bringing the grand total to €384,870. The IHRB, presumably knowing this had the potential to cause a stink, then disguised the Turf Club contribution in their annual accounts as “other income.”
The other three IHRB staff that received voluntary redundancy payments under the same scheme at that time must be feeling more than a little aggrieved to hear their old boss was treated very differently to them.
Ultimately, we’ll probably never know whether Denis Egan jumped or was pushed, but in the end the additional cushion of €142K certainly softened his landing.
It would be nice to think the Turf Club would issue a statement clarifying exactly what prompted them to make this extraordinary payment, but there’s probably more of a chance of Ryan Tubridy hosting the Late Late Show again.
With potentially the biggest revelations about the IHRB still to be revealed the lack of proper corporate governance within that organisation is already apparent and in common with RTÉ it’s hard to see how it can just carry on without major changes to both its culture and structure.
In an interview on RacingTV’s Luck On Sunday Daragh O’Loughlin mentioned that his contract as CEO of IHRB has six more years to run and he intends to use that time to “turn the ship around.” This might be a reasonable analogy in normal times, but in the case of this current crisis at IHRB it appears the hull has been breached, the ship is listing badly and the former captain has already left in a lifeboat. Turning the ship around may not be the best course of action under the circumstances.
Amalgamating IHRB within HRI would seem like a potential solution for the industry, but that may not be as straightforward as it might first seem. Under current legislation the sport is required to have an independent regulator and that stipulation is there for a good reason.
Whatever the long term fate of IHRB, when all the dust has settled I for one would like to think that Daragh O’Loughlin remains within the sport. His actions so far display a level of integrity and decisiveness that can only be an asset for the industry going forward.
