Sanan: Regulation of Sales Business Needs 'Teeth'
Updated: Friday, July 9, 2004 8:26 PM
Posted: Sunday, July 4, 2004 12:06 PM
Padua Stables' Satish Sanan said there is growing support for his plan to implement a code of ethics and other standards that would govern the Thoroughbred sales industry, either through an industry organization or legislative initiatives.
Sanan has proposed the Alliance for Industry Reform, which targets full disclosure of surgeries and veterinary procedures, full disclosure of ownership and purchasers, and dual agency without full disclosure prior to a sale. A letter signed by about 50 owners, consignors, breeders, trainers, and agents is a work in progress, though it appears most of the issues will remain on the table.
Sanan, a major buyer at auctions for almost 10 years, coordinated a July 2 conference call on which he said 40 to 50 people participated, including representatives of major auction companies. The purpose was to glean comments, suggestions, and concerns in an effort to reach a consensus.
"All of the key players were on the call," Sanan told The Blood-Horse
in a July 3 interview. "I think everybody was complimentary of the fact somebody is taking the initiative. I think people have come to grips with this whole thing."
Sanan's letter to owners and breeders calls for oversight of the auction and brokerage business, "complete with the powers to license, govern, and discipline." In the interview, Sanan said there must be a structure in place--not just conditions of sale that may be largely unread or not enforced--to combat such things as fraud and kickbacks.
"If it doesn't have teeth, it is no damn good," Sanan said.
Sanan noted the details aren't in place, and in fact, the letter he plans to introduce to the industry continues to be tweaked. Full disclosure of ownership, for instance, could be a privacy issue. There also is disagreement over whether the sales process should be self-governed or legislative steps should be taken.
Despite that, Sanan said "everybody agrees dual agency and the issues associated with it are a major issue." Sanan said the true selling price of a horse and the payment of all fees and commissions must be documented.
When asked if there is much resistance to an industry-wide effort to implement standards, Sanan said there are "crooks and parasites" that need to be punished even though they are in the minority. He also said: "There are people that have argued with me that we don't need regulation."
Sanan acknowledged the suggestion the industry form a task force to study the issue. He said he was asked to visit Kentucky the week of July 6 to discuss the Alliance for Industry Reform with interested parties.
"The net of this is there is momentum and a lot of support," Sanan said. "I think people recognize I'm not going to drop it and go away. I don't want this to be like many other things that die on the vine because people don't want to implement it."
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