Numerous breaches of financial policy within the Fiji Rugby Union (FRU) in the past have surfaced following our search into the FRU financial mess that has been widely published in the media.
There were also instances of code of conduct breaches, and the disregarding of conflicts of interests.
Majority of these breaches involve senior staff of the Union. A new interim board, under the leadership of Peter Mazey as chairman, are combing through the mess.
They hope to sail Fiji Rugby forward by rectifying the mistakes of the previous board.
In an interview with Mr Mazey, he admitted there was no proper budgeting of finances.
FRU has a good cash flow, with last year amounting to about $22 million. Mr Mazey said money wasn’t used for what it was intended for.
“Cash coming in is generally destined for something, so if I get $100,000 cash from a sponsor, I must make sure every dollar of that is spent on that event. The problem is that wasn’t happening,” he said.
The reality is the Union is operating on an $800,000 bank overdraft.
“$3.5 million is what we owe, and the bank overdraft of about $800,000 is on top of that.”
Fiji Rugby Union trustees interim chairman Peter Mazey (left), FRU new manager finance Nilesh Sharma and member of trustees Mosese Naivalu during their second meeting at Rugby House in Suva on May 19, 2023. Photo: Ronald Kumar
While the FRU is operating on a financial deficit, it has assets of high value. These include:
- Rugby House – valued at $4 million; and
- Shares in Counter Ruck Pte Ltd – $6 million.
However, these assets don’t pay the bills, Mr Mazey added.
Questions sent via Viber to former board deputy-chairman and head of the finance sub-committee, Daniel Whippy, remain unanswered.
CREDITORS
Outstanding creditors date back three to four years, Mr Mazey said.
Most creditors are big businesses, and big and small hotel chains.
In the list of creditors is Brian Thorburn, who was instrumental in the establishment of the Fijian Drua team.
Mr Mazey said the Union still owed Mr Thorburn a substantial sum of money (we have chosen not to disclose the amount).
Mr Thorburn, of 24/7 Sport Consultancy, was the Union’s Commercial Management Manager. Mr Thorburn’s contract ended in October last year. Mr Mazey said Mr Thorburn still received commission.
Fiji Sun has been advised that a payment arrangement has been settled with Mr Thorburn, which will be paid over a period.
Similarly, other creditors that the union plans to retain, have agreed to the Union’s payment plan.
FRU also owes money to bus companies, and other locally owned business, including two caterers, which are of concern to Mr Mazey.
In a phone conversation, Mr Thorburn said: “I have no comment on this. Matters such as this are confidential between myself and the FRU.” He declined to make any further comments.
ALLEGATIONS
Some of the allegations that have surfaced and put to Mr Mazey include:
- Gross abuse of Fiji Airways contra (value in kind – air tickets for official use only);
- Incurring liability for FRU without board consultation, such as in the case of Semi Radradra (injury caused to Radradra during the Tokyo 2020 Olympics incurred a cost of more than FJ$400,000);
- Abuse of fuel allowances over the years;
- Breach of the fleet policy;
- Abuse of petty cash; and
- No supporting documents, lack of evidence, and unsigned documents and vouchers.
Fiji Sun had also raised the allegation of money being used for a staff member’s birthday celebration.
One instance was a celebration that totaled $1000 only had receipts for $816.40, the remainder was untraceable.
The Union’s financial policy indicates that all transactions need the authorization of the CEO.
Mr Mazey said most of the issues stemmed from the lack of internal policies that surrounded operation, and they were relooking at this.
“For the Fiji Airways contra, there’s no policy or procedures on how that is to be used,” he said.
“On the VIK, we have been trying to find out policies how that is being used. If it’s not against policy, and it’s not illegal, then I can’t make any judgement of accusations against anybody.”
SIX-MONTH INVESTIGATION BY FRU
It is understood a six-month investigation and audit was carried out by the Union’s internal team between January and July last year on alleged breaches of procurement and financial processes.
Mr O’Connor was the subject of the investigation, including three senior staff of the finance department, whose contracts were terminated last year.
The termination was announced by former chairman Commodore Humphrey Tawake during a press conference in August.
“I cannot divulge the names or the offences now due to investigations being conducted,” he said.
The Union had also issued a statement pointing to the discovery of certain breaches of internal processes as the cause of the sacking, and audit.
Commodore Tawake at the time said: “An audit is part of the everyday business function and for Fiji Rugby to facilitate that immediately, FRU CEO has volunteered to take annual leave to allow for the process to happen seamlessly.”
Two of the terminated staff have ongoing litigation with FRU.
When contacted for a comment via telephone, Mr O’Connor said he no longer associated himself with Rugby Fiji.
“I’ve moved on. I know I’ve done my part,” he said.
“When they (previous board) said for an internal audit to be carried out, I took it upon myself to take leave, so that I don’t obstruct.”
Mr O’Connor said he was unaware of the cases highlighted during the investigation.
“The (previous) board never involved me, and they have been running FRU until I returned from my leave.
“Even the cases with those three staff, I don’t know because they didn’t address them to me, they just did it themselves. I was never consulted in any of those cases.”
INVESTIGATION
Mr Mazey said a team of about three independent professionals from the private sector were earmarked to make up the investigation team.
The team is tasked to investigate several issues involving operational matters. Mr Mazey assured that any criminal activities would be given to the Police or the Fiji Independent Commission Against Corruption.
“We haven’t found anything criminal. Mismanagement of funds, we haven’t found anything of that sort,” he said.
“We’re not saying they are not there. The questions have come up about the authorization of the purchase of goods, those goods are for the team.”
Mr Mazey said they had already spoken to Commodore Tawake and had yet to meet Mr O’Connor for these allegations and findings.
FINANCIALS
In a press conference in April, acting CEO Sale Sorovaki announced that the Union made a loss of $1,134,816 for the 2022 financial year, a huge blow considering the profits trumpeted by Mr O’Connor since 2017.
Mr O’Connor was CEO from January 2016 until December 2022.
Mr Sorovaki attributed the loss to COVID-19 and the lack of sponsors.
Surprisingly, on June 20, Mr Mazey informed the media the loss had increased to $3.5 million, and not as indicated in the annual report.
In the same month, a claim was made by the Fijiana 15s team of unpaid allowances amounting to $172,600 for the Wallaroos Test Match and the Oceania Championship, plus outstanding allowances for the World Cup.
In a press conference on June 26, interim Board of Trustee member Jenny Seeto revealed that both the men and women’s 7s team programmes were operating on a $1.5million loss.
Since 2017, audited financial accounts of the Union published online and as reported in the various media platforms recorded profit as follows:
- 2017 – $200,000;
- 2018 – $569,000;
- 2019 – $88,000;
- 2020 – $282,000; and
- 2021 – $269,554.
But why was there a massive loss recorded in the 2022 financial year?
