The RACV held its first AGM inside the plush new $200 million Taj Mahal head office in Melbourne this morning and we had a good debate about some of the structural and financial issues surrounding Australia’s richest remaining mutual.

Whilst there wasn’t a lot of joy in terms of increased disclosure and better governance, there was plenty of news coming out of the meeting as the board announced a Commonwealth Games sponsorship, the $13.5 million acquisition of the prestigious Cape Schank golf course and a substantial increase in roadside member benefits as it shares the fruits of its unprecedented financial success. Even the 1.1 million circulation RoyalAuto magazine will be expanded and printed on better paper from next year.

The 30% stake in Insurance Manufacturers Australia joint venture with IAG is obviously worth far more than the $158 million book value given that it returned a dividend of $95.8 million last year. However, both the chairman Clive Hall and the finance director declined to speculate that it was worth more than $1 billion and the RACV in total was actually worth about $2 billion, not the $757 million claimed in the balance sheet. But Hall did rule out the sale of the stake because he said RACV needed to retain control over its brand and how it was distributed in Victoria.

The next big issue was the value of the $200 million Taj Mahal at 501 Bourke St, the highest point in Melbourne’s CBD, which officially opened almost a year late on July 4. Directors have valued all buildings at just $91 million and total properties at $115 million so it looks like members have already taken a $100 million loss.

However, the finance director refused to disclose the actual valuation of the building but said it was broken into two parts because nine floors were commercially leased and the RACV Club component was valued using hotel industry assumptions.

The massive investment has led to a sudden 2,000 increase in members to 21,000 and a renewal rate of 93%, whilst trading revenue has tripled in the new venue but total Club revenue was still only $17 million last financial year.

Given that the 1.3 million roadside service members such as Crikey contributed $112 million last year, there remains a fundamental issue about who actually owns Australia’s richest mutual. Clive Hall refused to answer the question as to whether roadside service members would share in any demutualisation windfall, but he did point out that the original holding company was formed by the Club more than 100 years ago, with roadside service coming along as a subsidiary 20 years later.

Members startled heckling a bit when Crikey asked the board to clarify this ownership question so a decision could be made to either treat roadside members as genuine equals or completely disenfranchise them, rather than the current halfway house.

At the moment, the RACV Club gets nine of the 15 board seats and they’ve only had three contested elections in 32 years. Club members can vote on roadside service member elections but not vice versa and only Club members can vote to change the constitution which would unravel this gerrymander.

If roadside members were completely shut out, any demutalisation would see Club members each receiving a windfall of about $10,000. Quick, join now before they reach maximum capacity in the booming new facility.

Crikey’s last point was a request to allow a 200 word candidate statement in elections so that members know why people are standing. Clive Hall also rejected this, saying that the RACV will only provide so much support to all candidates. This was also one of several occasions when comparisons were made with the chaos of the NRMA, or “what happens north of the Murray” as one member described it.