http://www.theaustralian.com.au/spo...d/news-story/0641d42f9d968efca194033db31dab63
Former Eels directors to be disqualified
Former Parramatta Eels chairman Steve Sharp.
- The Australian
- 12:00AM April 11, 2017
The headaches for the former board of the Parramatta Eels are just beginning, with the NSW clubs’ regulator now proposing full disqualifications of four ex-Eels directors who were sensationally removed from the club last year by the state government.
The Australian understands the ex-directors set to be disqualified from the NSW club industry are the Eels’ former chairman, Steve Sharp, its ex-deputy chairman Tom Issa, and fellow ex-directors Peter Serrao and Geoff Gerard.
News of the proposed disqualifications comes as Parramatta have formally confirmed the biggest annual loss by a club in the history of the NRL, an extraordinary $12.44 million, in the wake of the Eels’ alleged rorting of the league’s salary cap.
It is understood that “show cause” notices were drafted yesterday for the proposed disqualifications of Sharp, Issa, Serrao and Gerard by the NSW Independent Liquor and Gaming Authority (ILGA). It is believed the issuing of the notices is likely to be formally announced today.
It is understood that a separate letter has been sent to the Parramatta Leagues Club flagging possible further sanctions for the club.
Under the NSW Registered Clubs Act, there is provision for Parramatta to be potentially fined hundreds of thousands of dollars for its alleged breaches of the act in the salary cap scandal.
The act also deems that if directors of a licensed club are considered to be not “fit and proper”, they can be disqualified for up to three years from being a director of any club in the state. A spokesman for ILGA last night declined to make any comment.
The notices relate to the former directors’ alleged roles in the Eels salary cap affair, one of the biggest scandals in Australian sport. The directors issued with the show cause notices will be given 28 days to respond. If the notices are not successfully challenged, the former directors could be suspended for up to three years from being a secretary or member of the governing body of any licensed club in NSW.
The issuing of the notices comes as the NSW Police Fraud and Cybercrime Squad’s Strike Force Rhodium — established to investigate frauds that the Eels used to cheat the NRL salary cap — is understood to be cranking up its preparations to make more arrests in coming weeks in relation to the Eels. There is no suggestion any of the four directors were involved in any acts of fraud.
But it is understood the timing of the issuing of this week’s notices is entirely unrelated to the issuing of police charges against former Eels CEO Scott Seward late last week.
The Australian understands there has been much discussion within the clubs’ regulator before proceeding with the notices, about whether ILGA had the authority to issue the sanctions to Eels directors in their capacity as board members of an NRL club.
While the Eels’ parent company, the Parramatta Leagues Club, is governed by ILGA, the NRL club itself technically does not come under the jurisdiction of the body. However, the regulator ultimately received high-level legal advice that it did have the power to issue the sanctions. This advice was given because of the unusual previous situation at Parramatta where there was a “mirror board” at the leagues club and the Eels NRL club, with Sharp and Issa the former chairman and deputy chairman of both boards.
Because of the mirror boards structure, and the fact that members’ funds at the $80m a year leagues club were allegedly being squandered to make illegal third-party payments to players, it was deemed that ILGA did indeed have jurisdiction over the matter.
The NSW government took the unprecedented action of sacking the entire Parramatta board in July last year, because it was deemed it had “ceased to be effective as a governing body” in the wake of the salary cap scandal.
The leagues club’s extraordinary record loss for the year is, by some margin, the biggest-ever in the NRL. It was unveiled in the newly released annual report by CEO Bevan Paul in the wake of the $1.12m in fines and penalties against the club, a sponsor exodus, massive legal fees and forced player terminations.
The 2016 season continues to hang over the club. Well into 2017, it continues to search for a main front-of-jersey sponsor and other corporate support. Paul said: “The impact of Eels’ governance issues on the company finances ... has translated into the Eels costing members $12,442,145 in 2016. These losses are unsustainable.”
