Asia Rugby’s Leadership & Governance Called Into Question With Damning World Rugby Independent Financial Audit

We have been working on this article of a more serious nature relating to the governance and finances of Asia Rugby, which we know World Rugby is partially aware of, for several months. Some of these issues were raised after attending governance workshops earlier in 2024, and subsequently, individual sources have reached out to us with further claims which led us to investigate further. An independent World Rugby Financial Audit has confirmed several of these concerns and painted an even more worrying picture.

Based on what we have seen, there are serious questions about Asia Rugby’s governance, finances and ethics from a leadership point of view. With the Asia Rugby Presidency and EXCO elections coming up in November 2024, they raise alarm bells about the type of actions that have been allowed over the past five years and what kind of actual transparent and forward-thinking leadership rugby Asia wants to take into the future.

Asia Rugby Governance & Finances –  Are They Transparent and Reliable?

The following allegations have been made in the backdrop to Asia Rugby’s Strategic Plan 2020-2024 which says “Asia Rugby demonstrates excellent governance and administration focused on fair, accountable, and transparent practices.” 

Extract – Asia Rugby’s Strategic Plan 2020-2024

We have seen evidence suggesting that even though Asia Rugby moved its headquarters to Dubai, UAE from Hong Kong under the guidance and wishes of its current President Qais Al-Dhalai when he was elected in 2019, under his stewardship, Asia Rugby has still not registered in the UAE as a legal entity and is still only incorporated in Hong Kong.

In the attempts to register in the UAE, under the direction of Qais Al-Dhalai, even at one point he suggested the new articles of registration would only allow an Emirati (citizen of the United Arab Emirates) to assume the Presidential role of Asia Rugby (AR), which World Rugby declined. (This is one of several red flags we uncovered)

The ongoing situation means that Asia Rugby did not until recently (and possibly still does not) have a recognised bank account and all funds issued to the regional governing body from World Rugby were being sent via the UAERF (UAE Rugby Federation) bank account (of which Qais Al-Dhalai is Vice President and active board member). 

This raises questions of potential financial abuse and question marks over the legality of the operations of the governing body (Asia Rugby) for the region. This is also hypocritical as Asia Rugby have sanctioned member unions for breach of governance (ongoing dispute with Sri Lanka Rugby for example), but has not taken any action against the Cambodia Rugby Federation which has seen an internal conflict vote in two boards simultaneously.

This entity registration situation has led to Asia Rugby hardly securing any commercial partners to increase funding to develop the game. The goal of the Asia Rugby Strategic Plan was to have revenues of USD$500,000 per annum for Asia Rugby competitions.

Commercial partners generally won’t agree to work with Asia Rugby as a non-registered entity with no bank account in the UAE (no new commercial partnerships have been secured under Qais Al-Dhalai’s 5-year tenure as Asia Rugby President until September 2024 when Emirates signed on – no information was released on the financial value of the sponsorship). 

• Under the current presidency, the Treasurer position was made void after the previous holder of the role left the position under an investigation (which in itself was conducted under a cloud of breaches of confidentiality.)
• Qais Al-Dhalai has since held the role of Chairperson of the Finance and Administration sub-committee for Asia Rugby 2021-2024 & he also appointed Affan Jahangir as Asia Rugby Accountant and Admin officer (now Accounts & Administration Manager). The latter worked for Qais Al-Dhalai through another company (QNA Auditing) as Audit Manager where Qais Al-Dhalai is the Director – there is no evidence a proper process was carried out for Affan Jahangir’s appointment (a recurring theme of allegations made of Asia Rugby appointments, and in our view,  contravenes Asia Rugby’s transparency goals).
• Payments from Asia Rugby to match officials, contracted individuals etc are paid via the UAERF bank account for Asia Rugby operations – but there has already been a situation of funds going missing and not entirely accounted for.

The above raises concerns and the need for governance reform and it could potentially damage existing commercial partners and brand affiliations for the sport. Considering that Emirates is a World Rugby commercial partner and that World Rugby was aware of some of the above, you would have thought they would have concerns over potential irregularities and even brand damage if something went wrong.

The ongoing unsuccessful attempt to transfer or legally register Asia Rugby in the UAE as an entity after five years also suggests poor leadership and financial accountability and questions of whether Aisa Rugby is fully compliant as a regional governing body of World Rugby and fulfilling its obligations under its Regional Partnership Agreement with World Rugby.

Qais Al-Dhalai – Asia Rugby President

World Rugby 2024 Independent Audit on Asia Rugby Is Damning

We had contacted World Rugby about several of the highlighted issues above and they were confident in the systems in place for whistleblowers and ethics (see more at the end).

Since we reached out a few months ago, World Rugby instructed an independent financial audit of Asia Rugby which was issued in July 2024 by Ernst & Young (EY), and titled “Asia Rugby Financial Process and Controls Assessment.”

The conclusions are damning and we can hardly think of any other organisation, private or otherwise, where its leadership would survive such a report’s findings under their stewardship. The assumed reaction from the current Asia Rugby Presidency and his leadership group would be deniability of accountability – but he has helped create this environment the governing body is working under and he leads the financial sub-committee.

Here are just some of the key re-affirmations of what we have stated above, confirmed by the EY Audit report. It should be noted that the report added that they “experienced significant challenges in respect of obtaining evidence to validate processes. In a number of instances we have been largely reliant on the explanations provided by Management.”

In our opinion, the actual examples outlined in the report are even more shocking in pinpointing failures in financial and governance transparency and accountability. At one point, the EY Audit states, “Payments demonstrate a culture with Asia Rugby of finding ways to make payments even if this circumvents expected and appropriate process.”

Asia Rugby Company Registration

• The report stated, “Asia Rugby’s operations are based in Dubai, United Arab Emirates, and to date, Asia Rugby has been unable to register a company in the UAE and therefore have been unable to set up a UAE bank account. Due to this, Asia Rugby currently uses the UAE Rugby Federation’s (‘UAERF’) bank account for all financial transactions (e.g. receipt of income from World Rugby and for all payments).

AR Financial Controls and Processes

• “Asia Rugby has ineffective record-keeping practices, with limited proactive tracking, recording, and reconciliation across financial processes. There is no mechanism to track payments due to be made and inadequate processes to identify and monitor funds due to be received.” (This is verbatim from the report.)
• The report was unable to obtain evidence to validate that a payment approval process occurs in practice. It said, ”It is unclear if this is due to inadequate record keeping or that the process does not occur consistently.”
• The EY Audit also added that “Asia Rugby does not reconcile or quantify exchange rates and related fluctuations when making and receiving payments. Exchange rate impacts are not accounted for nor are they used to inform decision making.”
• The EY Audit also said, “It is understood that there are several payments made by Asia Rugby as allowances or subsidies, with no requirement for individuals to provide supporting evidence to assure that the funds have been used for valid business purposes.”

Extract – Ernst & Young (EY) audit titled “Asia Rugby Financial Process and Controls Assessment.”

Rugby Tournament Selection Process and Funding

• One of the most hotly debated subjects among fans and the media has been the selection of the hosting of Asia Rugby tournaments over the years and what the criteria and process are. According to the EY Audit – “there is no policy or equivalent outlining the competition process.” The Regional Partnership Agreement ‘RPA’, by which Asia Rugby gets funding from World Rugby stipulates that “established, transparent, and clearly documented tendering and procurement processes are in place for holding tournaments to ensure hosts meet the expected standard and requirements, whilst also ensuring a fair and open process.”

• This also extended to a lack of a clear process for match officials to be paid and the EY Audit adds that match officials were not reimbursed on a timely basis after each tournament. A retrospective exercise had to be performed by Asia Rugby at the end of 2023 to reach out to match officials and ask them to provide reimbursement information. Only in 2024 was a Google Form process introduced but the Audit was unable to validate whether this is working effectively.

Asia Rugby – Immature Controls Culture (literally the wording in the EY Audit) 

• The report’s findings said, “Throughout the assessment, it has been noted that there is a culture within Asia Rugby of finding ways to make payments, even if this circumvents standard and appropriate process.”
• “This includes cash payments to sanctioned countries and payments to contractors via the CEO due to bank restrictions. Such a culture increases the risk of inappropriate or fraudulent payments being made and puts individuals at personal risk.”

As part of the Executive Summary conclusion, the EY Audit stated; “Our review has identified significant weaknesses and issues that expose the organisation to a materially high level of risk. This includes gaps in fundamental and foundational controls, such as accurate record-keeping which are ultimately undermining the accuracy and validity of Asia Rugby’s financial processes and financial information.” 

It also added there is an “immature controls culture whilst presenting a significant risk of inappropriate or fraudulent payments being made”.

The final questions asked of World Rugby in the report were; “Are World Rugby prepared to accept the current level of risk and continue to fund Asia Rugby in the interim, given the significant challenges and poor financial control environment, and, “To what degree do World Rugby wish to embed standardisation in financial processes, policies and controls across regional associations through centrally developed guidance?”

We have been told action will be taken by World Rugby at the start of October 2024 (and we will update more on this when it has been issued and made public – which could be this week.)

Accountability In Asia Rugby? 

We have also had other sources contact us and there are repeated (claims we can not verify) of a toxic environment under the current Asia Rugby Presidency. It’s an election year in Asia Rugby with candidates still to be confirmed, and World Rugby also has its elections with key changes set to potentially change the leadership at a global and regional level.

It has been suggested that the current Asia Rugby President also intends to run for a World Rugby EXCO seat as well as re-election to Asia Rugby presidency.

The questions eligible voting members have to ask (and what the Asian rugby fraternity needs to question), is what direction they want the sport of rugby to take and the type of people they want to be leading it into the future.

Extract – Asia Rugby’s Strategic Plan 2020-2024

Are There Sufficient Whistleblower Policies in Place in Rugby?

For clarity, we had sources reach out to us who didn’t feel comfortable raising these allegations as they didn’t feel World Rugby or Asia Rugby have a whistleblower policy or mechanism in place which protects confidentiality. 

When we tried to search for a whistleblower policy on World Rugby – the only references were the WADA and drug testing but not relating to issues of governance, allegations of financial misconduct or a toxic environment of work/leadership.

In light of the charges brought against Claude Atcher in the build-up to RWC 2023 – that was surprising. Whereas World Rugby has done great work in implementing safeguarding mechanisms, the apparent lack of a whistleblower mechanism was a concern.

We asked World Rugby to clarify and they did reply and stated the following are all avenues to report infringements and are available to member unions/regions and any other rugby stakeholder

• World Rugby operates a confidential reporting line for members/participants. Reports can be sent to a confidential Mailbox confidential@worldrugby.org or made to a World Rugby Anti-Corruption Officer in person, handled on a confidential basis (whether made anonymously or not). (There is further explanation on the general operation of these here.)
• There is also guidance on making an anonymous report under the ‘protect the game’ tab.
• World Rugby says it also has a safeguarding landing page and an integrity page.
• Furthermore, the global governing body has an Integrity Code, which prohibits various forms of malpractice and poor ethical behaviour for those officials that it covers. 

More to come…..