Public Accounts Committee may quiz HRI after €389,000 loss to liquidated company
Horse Racing Ireland could be called upon by the Public Accounts Committee (PAC) to explain the loss of €389,000 that arose after the company that used to undertake its cash-in-transit services went into liquidation in 2019.
In August 2019, HRI was named as one of numerous creditors of Business Mobile Security Services, the holding company of Senaca, which was responsible for the transport of Tote takings, along with gate receipts and cash takings from Leopardstown, Fairyhouse and Tipperary.
At the time, HRI was seeking the return of €539,000 in cash, and the final sum written off in the 2019 accounts came to €389,000.
On Friday, HRI's chief executive Brian Kavanagh, who insisted the authority would be happy to explain the figures, said: "During the liquidation there was money allocated to certain creditors, so that's the net figure.
"We were obviously not happy to lose any money like that, but when you weighed up the costs that would be involved in taking it further, it was the only outcome on offer really."
The 2019 accounts also noted a loss of €2.064 million in relation to its investment in the Curragh’s new ownership entity, in which HRI now holds a 35.29 per cent equity share, up from 33 per cent.
Kavanagh has previously stated its total investment in the Curragh venture was €36m, which comprises a €12.5m grant and the remainder in shareholding. Its 2019 write-off in relation to the Curragh Racecourse Limited saw total losses rise to €4.523m.
"That is a trading loss, which is absorbed by the Curragh shareholders, of which HRI is one," Kavanagh said.
"It is a trading loss during the course of its redevelopment and for 2019, its opening year. It is taken account of in the overall funding plans for the Curragh and it is accounted for in any financing figures we have spoken about before.
"Now, you'd like to see it come down quicker, and it has come down. It's not uncommon for a company in a set-up situation to incur losses and, but for the Covid intervention, the Curragh is on target to return to profitability. I'd be hopeful it will return to profitability this year.
"Those losses are funded at this point, so the idea would be that any surpluses generated by the Curragh in the future would be for reinvestment in the Curragh, its facilities or its business."
As for the increased shareholding, which began with HRI, the old Turf Club and private investors holding 33 per cent each, Kavanagh explained: "It depends on the balance of investment put in by the various shareholders. The level of shareholding changes as a result of that.
"Further monies were put in by some and not others, so the balance changed as a result of that. The Turf Club wouldn't have put money in, so it changes relative to the funds that were put in. Their holding has decreased."
Sinn Fein TD Brian Stanley, who chairs the PAC, said of the cash-in-transit loss: “It is explained in the financial statement and in the comptroller and auditor general's notes that a disclosure has been made by HRI that an incident occurred where a financial loss was suffered in relation to cash-in-transit services whereby the service company went into liquidation while holding cash relating to HRI.
“The situation and the explanation leaves the committee with a lot of unanswered questions and some reservations regarding the HRI’s level of internal controls. It is welcome, however, that subsequent to this incident a review was carried out on the effectiveness of internal controls in March 2020. Following our correspondence with the HRI, the PAC may wish to invite the body to attend the committee.”
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