'News knew of Storm rorts'
TOM REILLY
July 20, 2010 EXCLUSIVE
SENIOR News Ltd executives were told of salary cap breaches at the Storm as early as February but did nothing to address the problem, the rugby league club's former acting chief executive Matt Hanson has alleged.
Mr Hanson's claims contradict News Ltd's version of events and call into question statements by the company's chief executive, John Hartigan, that News became aware of the breaches only in mid-April, days before the scandal was made public.
Mr Hanson claims he alerted the Storm board member Craig Watt, who is also the chief financial officer of News Ltd's publishing division in Victoria, on February 23, telling him he had ''inherited some big problems with the salary cap''. In mid-March Mr Hanson also allegedly contacted the News Ltd employee and club board member Frank Stanton - who replaced him as acting chief executive - and informed him that the Melbourne club was about $700,000 over the cap this year and was being investigated by the NRL.
Mr Stanton allegedly replied that he had dealt with salary breaches at the club before, and told Mr Hanson: "You just need to play it with a straight bat and try to get through it [the NRL audit]."
Mr Hanson - who was labelled a ''rat'' by Mr Hartigan last week - also rejects claims by the News Ltd boss that he assisted an investigation into the club's finances in only a ''very limited way''.
On April 23 he met auditors from the accounting firm Deloitte. At that meeting he discussed the breaches at the Storm and detailed his conversations with Mr Watt and Mr Stanton, he told the Herald. Subsequently he also responded to written questions from the investigators.
''If a record of that conversation wasn't included in the Deloitte report, then why not?'' Mr Hanson said. ''And if it was, why wasn't it mentioned in the News Ltd summary handed out last week and why did John Hartigan say I only co-operated in a limited way?''
Mr Hanson's lawyer, John Sinisgalli, who attended the April 23 meeting, said the Deloitte report had to be made public.
''I was surprised when John Hartigan described Matt's co-operation with Deloitte as 'very limited' because there was no suggestion from them that Matt's co-operation was anything but complete,'' Mr Sinisgalli said.
News Ltd, which owns the Storm as well as half of the National Rugby League, maintains it became aware of the salary cap issues only in the week before the scandal broke on April 22.
At a news conference last Thursday, Mr Hartigan said he was unaware any News Ltd directors had knowledge of breaches before he did.
Mr Hanson tendered his resignation on April 22 but this was rejected by the Storm's directors. He was then suspended on full pay until last Thursday when Mr Stanton contacted him to say he had been sacked.
Mr Hanson told the Herald he believed it was important to set the record straight. ''When you see your photo on the front page of the paper under the headline 'Rats face jail' you think, 'What's my mum going to think when she sees this? This is not the person who I am.' ''
A News spokesman, Michael Sharp, last night insisted Mr Hanson put no figure in conversations with the company's directors or to Deloitte. He confirmed the conversation in February but said it related to issues of which Mr Hanson had already informed the board. ''Matt Hanson informed the entire Storm board that the club was in dispute with the NRL over four salary cap issues relating to 2009.
''Hanson informed the board that these were technical breaches in early February and he believed all these issues could be successfully resolved with the NRL.
''Frank Stanton and Craig Watt were unaware of any other salary cap issues before the NRL informed them of major problems shortly before April 22. To suggest otherwise is defamatory.''
