THE State Government invested $5 million in a sports betting company that its liquidator says was insolvent at the time.
Now Government-owned agency TOTE Tasmania is set to lose its $5 million plus another $510,000 which was unsecured.
Former premier David Bartlett and then-treasurer Michael Aird and the TOTE Tasmania Board approved the investment in the Canberra-based company Sports Alive in 2009.
The investment gave TOTE a 25 per cent stake in Sports Alive’s parent company Bet Worldwide Pty Ltd in December 2009, and TOTE chief executive Craig Coleman was appointed chairman.
Sports Alive collapsed in August with total liabilities of $12 million.
In his report, liquidator Hamish MacKinnon said “based on the above [Sports Alive’s audited figures] the company was insolvent from at least 2008”.
“I am bemused that TOTE Tasmania and the ACT Gambling and Racing Commission [the regulators] were not aware of the financial position,” he told creditors.
Mr MacKinnon is investigating whether directors traded while the firm was insolvent.
Mr Coleman said TOTE Tasmania had commissioned an independent due diligence report regarding Sports Alive before making its investment.
• HAS TOTE CUT ITS OWN THROAT?
Kim Booth MP
Greens Racing spokesperson
The Tasmanian Greens today called on Treasurer Lara Giddings and Racing Minister Bryan Green to explain why TOTE Tasmania was seemingly allowed to waste public funds by investing in a reportedly insolvent company.
Greens Racing spokesperson Kim Booth MP said TOTE’s investment of $5.5 million into the betting company Sports Alive appears to be gross incompetence on the part of the TOTE management and the then shareholder Ministers.
“Questions need to be asked of both the Racing Minister and the Treasurer as to how much research went into the viability of what has resulted in another financial disaster for TOTE Tasmania and the struggling racing industry,” said Mr Booth.
“Although they claim a due diligence report was undertaken at the time, the veracity of that report needs to be examined given the disastrous outcome of this investment.”
“As Chairman of the Role and Future Viability of TOTE Tasmania Committee, I will be recommending the Committee looks into this matter and in particular whether or not money was invested in a company that was in fact insolvent at the time.”
“Of particular concern is the obvious turn-around for a once profitable Government Business Enterprise.”
“It looks like TOTE bought a corpse rather than the unfortunately named Sports Alive,” Mr Booth said.
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