ORFU bailed out of financial crisis

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By Steve Hepburn on Sat, 28 Jan 2012
Rugby | Otago | ORFU

Brent AndersonThe Otago Rugby Football Union has been bailed out of its financial crisis by the New Zealand Rugby Union, with a loan and the appointment of a change manager.

The NZRU revealed yesterday it had appointed former Bay of Plenty chief executive Jeremy Curragh as a change manager to help the union with a recovery plan.

The ORFU has recorded losses of nearly $4 million in the past five years and is likely to report another significant loss next month. It was forced to turn to the national body for assistance.

Its financial difficulties are summed up by the revelation, confirmed by the Otago Daily Times yesterday, it could not afford to pay the $5000 entry fee to play in this month's national sevens tournament in Queenstown.

NZRU provincial union and community rugby general manager Brent Anderson said the national union had been kept up to date with the financial challenges facing the board of Otago rugby.

"For some time, we have been aware of the financial problems facing Otago rugby. It's important to remember this is an incredibly stressful time for the union, the board and the staff," Mr Anderson said.

"That's why we have been working with Otago to help them get a clearer picture of their financial position.

"There have been no forensic auditors or accountants. The NZRU has provided personnel support to Otago to help them assess their current situation and to look for viable solutions for the future.

"Jeremy Curragh has been appointed as a change manager to help the union with a recovery plan. As well as picking up responsibility for the appointment of Jeremy Curragh, we have provided Otago with a loan in order to give them breathing space to help them resolve their financial difficulties."

The NZRU declined to say how much had been lent to the Otago union.

Curragh, who has already started working with the ORFU, helped Bay of Plenty when it faced a $700,000-plus loss in 2007, turning the union into profit within three years.

He was also called in to assist Cromwell businessman Stuart Heal in helping to sort out Southland rugby last year when it faced a funding shortfall.

In Southland's case, a new board was elected, a new chief executive was appointed and expenses were cut.

The Otago union has not replaced general manager Richard Reid, who left at the end of November.

Otago chairman Wayne Graham could not be contacted for comment.

Earlier this week, Mr Graham described the finances of the union as "tender". The union would report a loss and it could not afford to post a loss, Graham said.

The union is facing a debt of $1.2 million which it has to repay in the middle of the year.

It sold Carisbrook to the Dunedin City Council in 2009 but still had a debt of $1.2 million.

The union's debt was not cleared despite the Dunedin City Council paying $7 million for the ground.

 

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The penalty is?

Submitted by russandbev on Sun, 29/01/2012 - 9:20am.

Farsighted, you ask a perfectly reasonable question to which the reply is "absolutely nothing".  The whole saga of the new rugby stadium at Awatea Street has been shown to be based upon the premises of lack of transparency at one end of the paradigm to deliberate falsification at the other.  It is quite clear to anyone that looks at the ORFU values for a second, that these are based upon the operation of Carisbrook as a rugby venue.  The instant that Farry announced that a new roofed stadium was going to be built at Awatea Street, these values relating to Carisbrook went out the window along with the bank's reasons for continuing to advance money to the ORFU.

Many of us have seen for years the structure of this tower of cards which involves the ORFU or the Highlanders - and the ORFU's own auditors have consistently pointed it out.  The fact that elected people within the DCC and the ORC have now duplicated the financial mess and placed the burden on the ratepayers is a scandal of immense proportions.  Maybe farsighted, the question should be, just why did the likes of Chin, Brown, Noone, Bezett, Collins, Acklin, Guest and of course the late Walls, not clearly see, or want to see, the stupidity of their decisions?

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What is the penalty?

Submitted by farsighted on Sat, 28/01/2012 - 4:26pm.

What is the penalty for making a deliberately false submission on a Council's Annual Plan?

The ORFU submission in support of the new Stadium read:

""... It has been argued the Union will not be contributing to the cost of the new stadium. This is false. The Union, subject to satisfactory arrangements with the Carisbrook Stadium Trust, will be transferring ownership of Carisbrook to the trust. This represents a book value of $18,650,095, made up of land $418,000, buildings $13,244,098 and hospitality suites to the value of $4,987,997."

This was made at a time when the Union knew that it had serious financial problems.  The valuation of Carisbrook done not two years later gave a value of $7 million in total. The ORFU is not contributing financially to the stadium.  The ORFU is not even an anchor tenant of the new stadium.

The only sentence in the entire submission that appears to have any merit now is: "This is false" 

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The missing million

Submitted by Save Our City on Sat, 28/01/2012 - 11:42am.

The Dunedin City ratepayer unwillingly gave $7 million to the ORFU but only $6m is accounted for. Where is the missing million? Why does the ODT continue to ignore this question from many of its readers?

Now we have heard "less than responsible" decisions were made at that time. If the ticket was clipped or the money misappropriated then it is time for the whole story to be made public.

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Questions on the ORFU

Submitted by russandbev on Sat, 28/01/2012 - 11:14am.

The questions that the ODT should be asking and publishing the responses to, in relation to this story, are:

Why did the DCC enter into a mutual suicide pact with an organisation that has clearly shown through its audited accounts to be insolvent?

If the DCC paid the ORFU $7m for Carisbrook why did the ORFU financial statements show that $6m was received?

What total funding have the ratepayers paid directly or indirectly through any DCC owned company such as Delta to the ORFU over the last 10 years, and what is the justification for doing so?

By getting into bed with a business that, according to its own auditors, has no grasp of the basic fact that in order to survive its costs must be less than its income, the DCC has shown that its financial competence matches that of the ORFU and the Highlanders.

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