Another ownership interest in Fusaichi Pegasus raises questions

There is an old saying: Follow the money. When that adage is applied to Fusaichi Pegasus, it reveals a second owner. And that may spell trouble. Recent reports indicate that Fusaichi Pegasus is not owned solely by Fusao Sekiguchi. This took some people by surprise. After all, Sekiguchi had claimed the horse as his own. He saw him at the 1998 Keeneland July yearling sale, felt that he was the one of the ones, a "magical" horse, and spent a sale-topping $4-million to buy him. He was the only horse Sekiguchi bought at the sale. It was all he needed. Fusaichi Pegasus proved his owner's hunch right. In the winner's circle after the Kentucky Derby (G1), it was a Sekiguchi production, complete with geishas.

Now come reports that Teruya Yoshida's Shadai Farm in Japan, far away from the tumult of the winner's circle at Churchill Downs on May 6, was a large stakeholder in the son of Mr. Prospector, with perhaps as much as 40% interest in the colt.

When Sekiguchi announced on the winner's stand at Churchill that Fusaichi Pegasus would remain in the United States to stand at stud, it may have come as a surprise to Yoshida. Shadai is in the business of standing stallions, and is the most successful stud farm of the last three decades in Japan.

Shadai has been involved with past Keeneland July sale toppers. The late Zenya Yoshida, father of Teruya, brought Shadai to prominence through a number of astute purchases, including the acquisition of Northern Taste, who dominated the Japanese sire lists in the 1970s and '80s. Yoshida also was active at the top of the market. In 1989, he purchased Northern Park for $2.8-million at the Keeneland July sale. And back in 1972, he had been one of four partners in the purchase of Wajima for a sale-topping $600,000 at the Keeneland July sale. There is a common thread here. Northern Park was the last yearling by Northern Dancer to be sold at public auction. Wajima was from the last crop of Bold Ruler. And Fusaichi Pegasus is from one of the last crops of Mr. Prospector.

That makes Fusaichi Pegasus-a Derby winner, a horse with a good female family, a son of Mr. Prospector, and a sale topper-one of the most attractive sire prospects in decades. Sekiguchi, a gambler at heart, felt it was time to cash in. He hit it big, with the bidding on the colt as a stallion prospect reported to be well past the record syndication of $42-million for Lammtarra in 1996.

The winning bidder is apparently Coolmore Farm, getting the horse for a total valuation of a reported $60-million. What Coolmore is paying for Sekiguchi's interest has not been disclosed.

The ownership issue comes into question for a number of reasons, one of which relates to Fusaichi Pegasus's racing career. While some states-like California and Kentucky, where Fusaichi Pegasus raced-do not require fractional interest holders to register for a racing license, New York state does. Anyone owning a fractional interest of more than 3% in a horse racing in that state must have an owner's license.

When Fusaichi Pegasus competed in the Wood Memorial Stakes (G2) at Aqueduct on April 15, he had only one registered owner, Sekiguchi. The omission of Yoshida may have been unintentional, for Sekiguchi has had a racing license in the state for several years, having campaigned stakes winner Maxzene there. Or the nature of Shadai's interest did not make it an ownership entity that required a license.

What is clear are New York's racing rules. Section 4026.3(a) of New York racing regulations states: "The managing owner of a horse shall not enter or start such horse, nor shall such horse race, unless each individual holding any property interest in such horse at such time has been disclosed to The Jockey Club and registered therewith by the managing owner."

Further, section 4026.3(b) states: "Nonmanaging owners-licensing. No horse shall be entered or started by its managing owner, that is owned by 35 or less owners, unless all of the owners are licensed."

As the syndication agreement story unfolds, the exact nature of Shadai's interest will become better understood.

In the meantime, the rules of racing in New York-in place to protect the integrity of the game and bettors-are clear: Hidden ownership is not allowed.