State body Horse Racing Ireland (HRI) is likely to oppose any attempt to reduce its involvement in the management of Punchestown racecourse or its board.
The Kildare Hunt Club (KHC), which owns the course and its surrounding land, is proposing to sell some of the property in a bid to raise €10 million to clear its debts to the billionaire Getty family and to HRI.
The Getty family-owned company, GT Equinus is suing for the return of €4.2 million, the principal and interest due on a €3.8 million loan it gave to Punchestown in 1998 under the passports for investment scheme.
Punchestown also owes €1.6 million to HRI, the State body responsible for administering racing.
Once the debts are cleared, the club wants to reduce the number of seats on the board of Blackhall Racing, the company that operates the racecourse and race meetings.
The State body has four seats on the Blackhall board, and the right to veto the appointment of the chairman. It appointed Blackhall's general manager, Dick O'Sullivan, who's responsible for the day-to-day running of the business.
HRI's chief executive, Brian Kavanagh, said yesterday it could not relinquish seats on the board or its role in managing the business. The agency took over Punchestown in 2002, when it was losing more than €500,000 a year.
"There's considerable State funding in Punchestown and this is the body best placed and best qualified to safeguard that," he said. "It was losing money when we moved in and now it's on target to make a profit of €600,000 this year."
HRI held talks with KHC earlier this year. The State body made it clear that it was willing to provide funding to the club that would allow Punchestown to trade out of its debts.
The Getty loan could have been settled with a payment of €2.15 million last March. HRI negotiated this settlement with GT Equinus. However, ongoing differences between HRI and the club over the validity of leases over Punchestown land halted this. The leases are security for a number of loans to KHC, but the club says the conditions attached to them are not acceptable to it.
The club's chairman, Matt Dempsey, said yesterday that it did not want to end HRI's association with Punchestown, and stressed that the club wanted it to retain a presence on the board and continue managing the racecourse business.
"We are more than happy for them to do that as they've done an excellent job," he said. However, Mr Dempsey added that the club ultimately wants majority representation on the board.
He also said selling land was only a proposal, and argued the club would not go ahead with it if it could reach agreement with HRI on an alternative. The club plans to put the land sale to members at an extraordinary general meeting on August 3rd.
