Irish racing’s regulatory body was thrown into turmoil after a financial matter it described as being of “grave concern” emerged in front of the Oireachtas Public Accounts Committee on Thursday.
PAC was told the Irish Horseracing Regulatory Board’s chief financial officer, Donal O’Shea, who was due to be among a team of IHRB officials to appear in front of the committee, is on “a period of voluntary leave without prejudice to his position.”
In a dramatic departure from a prepared opening statement, the IHRB’s chief executive Darragh O’Loughlin told the committee how in the previous two days he had become aware of “a hitherto unknown issue in early 2022 which caused grave concern.”
O’Loughlin said a full independent review will be carried out into a matter he described as “financial in nature.”
He added that preliminary information has been given to the Department of Agriculture Food & Marine, the Comptroller and Auditor General’s office, and to Horse Racing Ireland.
O’Loughlin was asked if O’Shea’s voluntary leave was related to the matter but replied that he didn’t want to say anything that might prejudice the investigation.
IHRB officials were scheduled to appear in front of the Committee of Public Accounts to examine its 2021 financial statements including the retirement package given to the IHRB’s former CEO, Denis Egan.
Instead, the opening statement by O’Loughlin, who took up the CEO role last year, ensured the focus switched to revelations described as a bombshell by Fianna Fail TD Cormac Devlin.
“To describe it as a bombshell is not unreasonable in the circumstances,” O’Loughlin replied.
Under questioning by the committee, O’Loughlin said he only became aware of the issue on Tuesday morning when he and other officials were preparing to appear before PAC.
He said he disclosed the matter to all the relevant authorities as soon as soon as he could.
The IHRB is racing’s regulator in charge of integrity functions including anti-doping and race-day stewarding across the sport and industry.
It is funded through Horse Racing Ireland, the semi-state body that runs racing. This year’s budget allocation to IHRB is €15.9 million.
The body has come under fire in recent years on a range of issues including its anti-doping practices. However, an independent review recommended by the Oireachtas Agriculture Committee last year said the IHRB match international best practices.
Donal O’Shea was appointed chief financial officer to the IHRB in February of 2017. Prior to that he had worked with Glanbia.
O’Loughlin was asked if O’Shea had opted to take voluntary leave or being asked to do so. He said he preferred not to answer that question.
HRI’s chief executive Suzanne Eade was also present at Thursday’s hearing and said it was “an awful time” for the IHRB.
Asked if this controversy might present a future problem for HRI to secure public money to fund the IHRB, Eade said: “I think the main thing is we get to the bottom of the issue and get it resolved very, very quickly.
“There’s an urgency about this; it wasn’t on my to-do list last week. It will the only thing on my list now for a couple of weeks until we really get this under way.”
She said she didn’t know enough about the matter to speculate about a possible criminal investigation but that from what she’d heard to date she didn’t believe public funds had been misappropriated.
“What I would say is this is an industry that everybody works damn hard for, including members of this committee and the joint-Oireachtas. It’s an industry worth €2.5 billion. We have to protect it and get to the bottom of this quickly so there is no lasting damage,” Eade added.
The independent review is expected to be carried out by an accountancy firm. It is understood that any report that might emerge might take months rather than weeks to produce.
Separately, O’Loughlin also admitted that governance around a €384,870 termination payment to his predecessor in 2021 was “clearly not” what it should have been.
Egan, who spent almost two decades as CEO of the regulator, got an extra €141,880 (58 per cent more) than if the conditions of the early retirement scheme were strictly applied.
The IHRB has said the extra ‘golden handshake’ money came from its two constituent bodies, the Turf Club and Irish National Hunt Steeplechase Committee, and that no public funds were involved.
PAC heard that Egan didn’t have a contract of employment although O’Loughlin said he trusted the bona fides of those involved in the matter.
The issue originally emerged when the IHRB’s 2021 accounts, the first ever annual report issued by the regulator, were published and reported on by the Comptroller and Auditor General, Seamus McCarthy.
Fianna Fáil TD James O’Connor described the matter as “flabbergasting.” He also said: “Such a payment was not in the interests of horse racing in Ireland and was 58 per cent larger than should have been paid out.”
