Garda fraud probe into liquidation of cash transit firm that cost Horse Racing Ireland €398,000

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A FRAUD probe is under way into the liquidation of a cash transit firm that cost Horse Racing Ireland €389,000,an Oireachtas committee was told.

he garda bureau of fraud investigation of Office of the Director of Corporate Enforcement (ODCE) is looking at the matter.

It was an “unfortunate situation”, said HRI chief executive Brian Kavanagh, who earns €190,000 annually.

Fianna Fáil TD Paul McAuliffe asked how the transit company had “managed to take ownership of the goods” it was carrying, including cash floats and proceeds from the tote and racecourse betting from a number of meetings that should have been lodged to HRI’s benefit.

Mr Kavanagh said the sums involved had not been insured, as cover could not be obtained. He said tax clearance certs were coming in from the company on a monthly basis, yet when it was liquidated there was a liability to the Revenue Commissioners of €670,000.

Speaking this morning at the Dáil Public Accounts Committee, Mr McAuliffe suggested the same thing could happen again.

Chief Financial Officer Suzanne Eade said there were policies in place and the new provider had been “bang on in terms of our requirements”.
Members asked about the diversion of money allocated in 2017 for the installation of CCTV cameras in racecourse stables and operational areas, given a high-profile doping case that came before the courts.

HRI allowed the money to be used for an online licensing system for trainers, of whom there are 600 around the country.

This was done on foot of an application from the IHRB, the regulatory body for horse racing in Ireland.

Verona Murphy, Independent TD for Wexford, said HRI had “made such a big deal” about obtaining the CCTV allocation in the first place, asking it was now disappointed in light of events.

Mr Kavanagh said hindsight was ‘great wisdom,’ adding that a tender had gone out last month for the installation of CCTV at all racecourses. He agreed HRI could have insisted that the money be spent for its allocated purpose.

Ms Murphy suggested it was a “terrible indictment” because the HRI knew CCTV was needed to protect the integrity of the sport. The CEO replied: “We would defer in the first instance to the regulator in that respect.”

Mr Kavanagh said there were 35,000 runners in Ireland in the last year surveyed, and 4,000 doping tests carried out, of which 11.8pc proved positive. He accepted there had a spike in positives when a new lab came on stream.

But he added: “A majority of the cases would have involved medication routinely given to the horse but not out of their system in time. That’s a venial sin.”

Separately the committee heard how Irish horse sales to overseas buyers collapsed by 35pc last year as a result of the Covid pandemic.

The value of sales plunged from a value of €165m in 2019 to €106m in 2020, while Brexit means the sale of yearlings and other equines becomes a VAT and customs event.

Large-scale sales events were switched out of Ireland to Britain last year, instead of being carried out at Goffs or Tattersalls here, the Public Accounts Committee was told.

Horse Racing Ireland is now to introduce an incentive scheme for overseas buyers this year, to link one purchase with a discount on a second in Ireland.

It is intended as an aid to breeders, said Mr Kavanagh, pointing out that 92pc across the country have five mares or fewer.

Brexit was ’a worrying development’ because Ireland exports 60pc of the horses we produce every year, “and while those exports go to 33 countries, by far the largest market is the UK.

“The two industries are practically interlinked. If you look at racing in the UK today, almost half the horses running will be Irish, and almost half the jockeys will be Irish jockeys.

“We had free movement of horses between Britain, Ireland and France before Brexit under a tripartite agreement that has now gone,” he said.

“Britain has become a third country, so the movement of horses between the countries becomes a VAT event, it becomes a customs event, and there’s new EU animal health law and phytosanitary requirements in terms of veterinary certification, and details that need to be checked before a horse can move between a third country and the EU.”

HRI is endeavouring to smooth the passage as much as possible, because there are 25,000 horse movements a year between Ireland Britain and France every year, “the most intense movement of equines anywhere in the world.”

Mr Kavanagh said: “It’s key to our trade is that we can have easy access to our markets, and there’s not additional cost associated with that. The breeders are the main people affected because they’re selling these horses to UK owners and trainers, and they’re breeding the horses for that market.” He pointed out that a lot of British breeders sent horses to Ireland to be covered at stud, being a valuable source of income for stallion owners but also for veterinary services that and a whole host of related economic activities.

“It was very simple before Christmas but is now more complicated. There are big challenges and it’s a real amber light for our industry, the impact that Brexit is having on the market for Irish horses in the UK.”

Online Editors

Source: Irish News