InDaily can reveal that taxpayers will help underwrite the not-for-profit’s planned recovery, with the State Government agreeing to a $200,000 loan as part of a proposed Deed Of Company Arrangement to be put to creditors at a meeting that must be held by the end of the month.

A spokesman for Veterans Affairs minister Martin Hamilton-Smith said the Government, which is represented on the creditors’ committee, has “worked with the administrators… to maximise the chances of the RSL continuing”.

“These funds will be provided as part of the [deed]… designed to support the RSL entities’ ongoing trading during the DOCA period,” he told InDaily in a statement.

“The intention and concern of the State Government is to ensure that the RSL remains a presence and a provider of services to both the veterans community and the broader community of South Australia.”

Hanna was replaced as president by former Adelaide sub-branch president Bronson Horan yesterday.

New RSL SA president Bronson Horan at an event with Health Minister Jack Snelling in 2015. Photo: Facebook

His off-sider Jill Hoare, whose term was finished, also stepped down, and Brighton sub-branch president Trevor Whitelaw was appointed to the board as chairman. Former directors Bill Denny and Cheryl Cates returned as vice-presidents after a spate of recent resignations – ironically, including their own.

Obviously the threat of liquidation is still potentially an issue

The influx of new directors – into the four key board positions – leaves only Steve Larkins, Colin Johns and Tony Flaherty as existing members, of whom only the latter was elected, and his tenure remains tenuous. The RSL is still resolving a dispute over his war record, with a national tribunal setting aside his previous sacking and recommending a fresh examination.

All four new board appointees have been strong opponents of the plan to sell off RSL Care SA residential accommodation facilities to Queensland’s RSL Care RDNS as part of a strategy endorsed by Hanna to solve the state branch’s cash-flow woes.

Denny, a former director of Veterans SA, previously resigned from the board over the proposal, while Cates quit in March saying she could “no longer serve this board as I am not satisfied that it is heading in the right direction and with the best interest of the League at heart”.

Horan, who has resigned from his role on the RSL Care board to avoid potential conflicts of interest, told InDaily today the mooted sale was off the table.

“That’s not even close on my agenda this year,” he said.

He said he was “really working towards three objectives”: welfare provision for the veteran community, commemoration and governance.

“Poor governance is quite possibly the reason we’re here now,” he said.

The new board, he said, would focus on “what the RSL can do well” in what will be “an interesting year” before fresh elections are called in 2018.

InDaily revealed on Monday RSL-SA had been given notice to show cause why it should not be stripped of its charitable status by the national regulator, the Australian Charities and Not-For-Profits Commission.

“It will affect us [if that happens], but it won’t be the nail in the coffin,” said Horan.

“I can tell you that if will do [lose charitable status], it will change the way we do business… in essence if you lose your charitable status you have to pay tax – and you have to make money to pay tax.”

But he said the league had been “speaking to ACNC and working through some of the things they asked us to show cause on”.

“We’re pretty confident we can justify why we can keep our charitable status, and how we can address some of the downfalls we had.”

That will involve proving a strong governance model, with Hanna previously telling sub-branch members the key areas of concern were “sourcing of services, finance, management of conflict of interest and records maintenance”.

Horan said all board members would now be required to attend directors training.

Whitelaw told InDaily before the first meeting of the new board this morning: “We can now knuckle down and work through the issues and try and make things happen on a range of issues, like dealing with creditors.”

“There’s a lot of work ahead of us to change RSL-SA and rebuild the brand so it’s meaningful and achieves what people within the organisation believe we should be doing – and there’s a strong commitment to do that,” he said.

“But at the end of the day, the creditors have got to accept the plan going forward… obviously the threat of liquidation is still potentially an issue.”

He said the situation should be “very clear” by month’s end, with potential buyers in the wings for properties already on the market.

Hanna was cited in NewsCorp’s Sunday Mail this week as being “confident creditors would accept an offer where they would be paid ‘100 cents in the dollar’ from a range of avenues, including Anzac Appeal funds, sub-branch contributions and property sales”.

However, he subsequently sent out a missive to all members apologising for a “misunderstanding on my part of the question posed”.

He instead clarified that creditors “will be paid after certain assets such as property are sold” and that “no Anzac Appeal or sub-branch money will be used to pay creditors at any time”.

The apology followed an email to Hanna from Acting CEO Corey Starkey, which has been seen by InDaily, in which he noted he was “disappointed” to read the remarks and asked him to “follow up to have this amended”, noting: “This line makes us look pretty bad.”

Starkey has filled the CEO position since the resignation of predecessor Julia Langrehr, which was first revealed by InDaily.

Langrehr last night endorsed Horan’s appointment in a Facebook post, congratulating him and noting: “The RSL is in good hands.”

Veterans advocate and former federal Labor MP for Cowan in WA Graham Edwards also commented, expressing gratitude to Hanna, who he notes was “in my view, true blue”.

This prompted a response from Larkins, a board confidant of Hanna’s, who wrote: “Indeed… you would have more insight into this than most and a pretty fair idea of some of the parallel agendas. You got a much better outcome.”

Board member Steve Larkins. Photo: Facebook

Hanna did not respond to inquiries today.

Whitelaw said of his departure: “At some point, we had to take the step of both moving forward and being seen to move forward.”

Horan said he believed it was “clear it was time for Tim to leave the organisation”.

However, he did not wish to comment specifically on where the previous administration had gone wrong, saying it was appropriate to answer to creditors first.

“They took their eye off the ball for a bit, and that’s all it takes,” he said.

“We’re not looking to beat up on the old board at all… we want to move forward in a positive manner.”

The new board members will forego their directors’ honorarium, with Horan saying “it would be a bit rich” to accept payment.

The four new directors had already put their name forward in a proposed spill at an extraordinary sub-branch conference to be held in coming weeks, which has now been cancelled.

Denny told InDaily the board appointments were “very much interim” and that “nobody here is looking at long-term sinecure”.

He said the RSL would now go “back to basics”, but warned of a “very hard struggle” ahead.

“We’re under voluntary administration for 12 months, and it’s possible if it doesn’t work we could go into liquidation,” he said.

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