Shane Warne has agreed to shut down his signature charity to avoid it being potentially stripped of its registration by the state government regulator.
Consumer Affairs Victoria director Simon Cohen announced on Wednesday the regulator had completed its 11-month investigation into The Shane Warne Foundation, noting it considered deregistering the charity because of the "low proportion of funds raised that were distributed to beneficiaries in recent years".
Fairfax Media has previously revealed the foundation has been running at a financial loss, donating just 11 cents to 32 cents of every dollar raised each year on behalf of sick and underprivileged children since 2011.
In October 2016, CAV issued the foundation with a "show cause" notice asking why it should be allowed to remain a registered fundraiser after violating guidelines requiring it donate at least 35 per cent of the money it raises.
"Since my letter, the foundation provided an undertaking to Consumer Affairs Victoria in December 2016 to take all steps necessary to wind up as soon as practicable and to ensure that it refrains from conducting any further fundraising appeals," Mr Cohen said in a media statement.
"Importantly, the inquiries have not otherwise found evidence of unlawful conduct or a failure on the part of the foundation to give the net proceeds of appeals to named beneficiaries.
"Given the undertaking made by the foundation, no further action is required. Consumer Affairs Victoria will monitor the performance of the undertaking."
The foundation has also pledged to donate any remaining funds it has in its accounts.
A statement was released by the foundation welcoming the outcome.
"The director's statement brings to an end the unwarranted and unfair speculation surrounding the foundation's affairs which has played out in the media for the last year," the statement said.
"The foundation has now been comprehensively investigated by both the Victorian and the Commonwealth regulators and has been cleared of all wrongdoing, with the exception of one minor non-compliance regarding the timeliness of its reporting.
"The foundation and its board are immensely proud of the work the foundation has done."
The deal to shutter the charity was struck with Consumer Affairs Victoria after Shane Warne and board member Eddie McGuire were summoned to a meeting at its headquarters in December.
A CAV source expressed concerns that a senior agency official had fawned over the celebrity duo, who signed an autograph and posed for selfies with department bureaucrats.
It is a bleak end for 11-year old charity, which had been donating around 70 per cent of funds raised in its early years of operation. The foundation is understood to have donated a total of about $4 million since it was founded in 2005.
But since 2011, the foundation has often been running at a loss, plagued by a blow-out in expenses for staging its signature gala dinners, celebrity cricket matches and annual poker tournaments.
For example, in 2014 the foundation spent $551,000 on marketing, events and other operating costs but only actually raised $452,000.
The expenses included $55,000 spent on "partnership agreements", $96,000 on catering and alcohol, and $133,000 on salaries. Only $50,000 was distributed to its beneficiaries.
The foundation's mission statement was to "raise funds to help enrich the lives of seriously ill and underprivileged children and teenagers in Australia", dispersing money to organisations such as the Starlight Foundation and Clown Doctors, as well as to individual families.
The dismal state of the foundation's finances weren't publicly known because the group did not publish its annual financial reports like most other charities.
In fact, it even attempted to have them declared confidential by the national charity regulator under a federal law that has been used to protect the safety of family violence charities.
The foundation's powerhouse board includes Warne, McGuire, Seek.com founder Andrew Bassat, Crown executive Ann Peacock, former Essendon chairman David Evans and comedian Glenn Robbins.
With the patronage of luminaries such as James Packer, Piers Morgan and a roster of past and present AFL and cricket stars, the foundation was one of the most prominent celebrity charities in the country.
CAV has repeatedly refused to comment about the appropriateness of staff members seeking autographs and photographs from the officers of a charity CAV was investigating, saying it does not provide a "running commentary on any aspect of its enquiries".