COMMENT LEE MOTTERSHEAD
Wider questions raised by a Phoenix storm that could not have occurred in Japan

3:12PM, DEC 1 2019
 
It would not have happened in Japan.
Regardless of whether or not Amer Abdulaziz Salman is innocent or guilty of stealing €100 million from a global Ponzi scam, Phoenix Thoroughbreds could never have become embroiled in a Japanese racing furore because Phoenix Thoroughbreds would never have been allowed entry into Japanese racing.
When writing about Abdulaziz and the Phoenix situation a journalist is inevitably walking a fine line. There is no intention here, nor is there any need, to cross that line. No allegations are being made on this page, for a simple analysis of the available facts is sufficient for us to know Phoenix could not have been allowed to own horses in Japan.

Moreover, even without attempting to play judge and jury in this particular case, last week's revelations should make us ask questions about racehorse ownership in our part of the world.

Later this week the Racing Post will publish two special reports that seek to demystify racing in Japan. We have become increasingly used to seeing star Japanese horses contesting showpiece prizes around the world but it is perhaps surprising how little the racing world knows about Japanese racing. The upcoming articles will lift a lid on an extraordinary sporting product. In a nutshell, however, everything in Japan revolves around integrity. That is most definitely true in relationship to ownership.

It was only in 2009 that the government-affiliated Japan Racing Association – which controls the top tier of racing and stages all the Grade 1 action – first began to accept applications from non-Japanese residents. However, consideration is only given to requests from individual owners, meaning an entity such as Phoenix would not have passed first base.

The reason for that is the JRA needs to fully convince itself of a potential owner's propriety. To make that possible international applicants must present to the JRA the story of their financial life. Tax returns for the previous two years have to be handed over together with documents showing the amount of tax paid. Prospective owners must tell the JRA about all their assets and offer up the full accounts of any company in which they are involved, either as an owner or employee. Applicants must have no criminal record, they need to register for a Japanese bank account and they are compelled to appoint a liaison officer residing in Japan.

That being the case, it is highly unlikely a person with any sort of dubious past would bother to apply. Even if such a person did apply, it is even more unlikely that person would survive a registration process that takes around six months.

In a booklet entitled, 'Guide to Application for JRA Owner Registration for Non-Residents of Japan', the JRA clearly lays out the reasons why it makes the journey so tough.

The JRA states: "Horseracing managed by the JRA is subject to its own specific rules. It is quite possible that many of these differ from the situation to which you are accustomed as horse owners in your country or region . . . While we appreciate how difficult it may be to gather all relevant materials, we hope you will understand that this process is necessary to ensure rigorous review of applications.

"As JRA racing has grown, upholding the integrity of horseracing has come to be seen as its most important task. The same applies to the 'owners' who play an extremely important role in horseracing. We are expected to rigorously screen their eligibility at the time of registration...As such, we hope you will understand that the system of ownership in Japanese horseracing has been applied with utmost stringency ever since it was first devised.

"You should therefore be aware that owners who are already active overseas are checked with the same rigour as those domiciled in Japan, and that, as a result of review, an application for registration may not be approved."

It is fair to ask whether certain applications for ownership here should also have been approved? For while there is an understandable and necessary push to increase the number of owners, there is also a need to pose more questions, demand more answers and raise the bar in relation to what is deemed acceptable.

Phoenix Thoroughbreds has spent many millions of pounds, euros and dollars on bloodstock since becoming a prominent force in 2017. The financing of those investments purportedly came from what Abdulaziz described as an equine investment fund, although the Racing Post last week revealed the Phoenix Luxembourg Fund was never regulated, at no point operated as a functioning investment fund and is now in liquidation. Yet even before that became public knowledge, alarm bells should have been ringing, given Abdulaziz never disclosed the names of those investing in his so-called fund, other than to refer to them as "non-racing people".

That was seemingly not enough to prevent Phoenix being registered in many major racing nations. Should those authorities not have wanted to know, in some detail, exactly from whom and from where the money was coming?

Responding to the Phoenix story, a BHA spokesperson said: "Wide-ranging criteria are in place for the suitability of those involved in the sport, and every application for registration as an owner is assessed in line with these criteria."

How, though, if you do not know the precise identity of the people behind an application – namely the people, in effect, paying for the horses – can you be confident that they meet the criteria?

With the Supreme Horse Racing scandal also fresh in the mind, the wider subject of racehorse ownership, and more precisely how governing bodies regulate ownership, is an increasingly hot topic.

As is so often the case in racing, it is possible to argue not enough questions get asked.

In general, racing suffers from a syndrome whose most obvious symptoms are the turning of blind eyes and looking the other way.

Specifically in relation to ownership, regulators need to be more probing about how an individual or organisation plans to pay for their involvement in racing, not least because sometimes the applicant could conceivably be a stooge for someone else. Crucially, suitability more regularly needs to be linked to morality. It sometimes only takes a little Googling of a person's name for doubts to surface. When they do surface, it should be wholly irrelevant if that person has links to prominent or influential existing owners.

Racing does indeed need new owners. It should, however, be made clear everywhere, not just in Japan, that everyone need not apply.

Thanks Blackbarn. In truth who cares about Japan? I bet there are loads of owners in GB that wouldn't qualify in Japan. It's lucky for lots of people who made money out of Phoenix that they were allowed to own horses. Mottershead forgets that the finances in Japan are far better than here and they can afford to have scrutiny and strict ownership rules. Here we need every penny we can get due to mismanagement of the sport, which doesn't get pointed out enough in the RP. Not many races in Japan where winners get less than £2k which would barely get you a years subscription to the RP.

Or maybe they were just bidding to push the price up, thereby collecting extra cash for their share.