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The plot thickens.
Brumbies members launch action to unearth missing millions
Wayne Smith, The Australian: APRIL 5, 2016
A group of Brumbies’ 20-year members, backed by some of the presidents of the Canberra clubs, are about to launch a civil action in the Federal Court aimed at recovering some of the “tens of millions of dollars” missing from ACT Rugby’s coffers.
The action is aimed at past and present Brumbies directors and a range of individuals — understood to have been mentioned in the KPMG file that forms the basis of an Australian Federal Police investigation — who were meant to be acting in the interests of the Brumbies, seeking money lost, along with damages.
It is believed the action, which is expected to be launched later this week, will claim that directors breached their fiduciary responsibilities and/or were guilty of deceptive conduct and that money that should have flowed to Canberra club rugby from the sale of the Brumbies’ former headquarters at Griffith was not paid.
Ironically, although the action is geared, in part, at individual Brumbies directors, any money gained will go directly back into Brumbies coffers, once the litigation funder who is indemnifying the members has taken his cut.
The legal action is the latest instalment of the devastating internal conflict that has flowed from the Brumbies board’s decision to stand down chief executive Michael Jones on March 21. Jones the next day went to the Supreme Court with 120 pages of documents and hit the Brumbies board with a wrongful dismissal claim. Justice Richard Refshauge has reserved his decision but allowed Jones to return to work while gagging the board.
As a result, a meeting that was to have been held last night between the board and the Canberra club presidents was cancelled. The presidents had wanted to discuss a range of issues, of which Jones’ dismissal was only one, but it is believed chairman Rob Kennedy felt nothing meaningful could be discussed while the injunction remains in place.
Meanwhile, a whole range of Supreme Court subpoenas served on the Australian Rugby Union, University of Canberra officials, ACT government leaders and the Brumbies board for all their private emails and phone calls relating to Jones must be returned within 14 days.
Jones was acting on the directive of the board when he referred anomalies relating to the sale of the Griffith property and the subsequent decision to locate the Brumbies’ headquarters at the University of Canberra to the AFP for investigation.
Prior to the deal a sports consultancy business conducted a study checking the options of where the Brumbies could go once they had sold their headquarters. There were 28 options, the top 10 of which basically offered peppercorn rent, similar to the $1-a-year rent the Canberra Raiders NRL side pay for their facility.
The University of Canberra was not in the top 10. The explanation sometimes given was that UC had gone to the ARU to pay $500,000 a year for five years to basically buy the Brumbies, but that deal never proceeded.
Yet the Brumbies’ financial problems, which amounted at the time to about $2 million, should have been wiped out by the sale of their Griffith property. It was thought the club would make around $20m on the deal. Instead, it made $11.387m. The club then invested $7.2m in a UC building that it had no equity in.
Jones, though he was not at the club at the time, sought explanations about the deal when he joined the club in 2015 and when nothing plausible was forthcoming he went to ARU chief executive Bill Pulver who immediately recommended the matter be investigated by Phil Thomson of the code’s Integrity Unit.
Thomson, a former federal policeman, quickly realised that the matter was too complex for his unit to investigate, at which point KPMG were called in. KPMG recommended it be taken to the AFP, which it was, first informally and then formally — and all with the Brumbies board’s approval. Yet it has been Jones alone who has become a lightning rod for the storm that has blown up around the issue, with the Brumbies directors effectively now wanting to be rid of him and the problem.
It is understood that he went to the March 21 extraordinary board meeting believing he would be permitted to present a strategy for fighting the smear campaign directed against him, only for the directors to gag debate.
Within 14 minutes, the decision had been taken to stand him down. Precisely what that means, no one entirely knows.
The board justified its decision on the fact that he had given an inflammatory interview to ABC’s Grandstand on the previous Saturday but it emerged yesterday that Jones had learned just 54 minutes before going on air that the board was likely to withdraw its support and desert him.
http://www.theaustralian.com.au/spor...416cd333640461