Melbourne Cup runner-up Bauer will be allowed to keep his placing despite being illegally treated with shock wave therapy within a week of the race.
Racing Victoria Limited (RVL) chief steward Terry Bailey said the unique circumstances of the case meant his panel could not pursue the matter.
The English stayer was treated in the Sandown quarantine centre by an RVL veterinary surgeon, Dr Rob McInnes, on the Thursday before the Melbourne Cup in which he ran a nose second to Viewed.
Bailey said trainer Luca Cumani accepted McInnes' recommendations to treat the horse and was entitled to assume the vet knew the local rules.
Cumani and the owners, including former Australian Test cricketer Simon O'Donnell and Terry Henderson, risked losing $835,000 in prizemoney had Bauer been disqualified and stripped of his Cup placing.
Electro shock wave treatment is widely used around the world where it is allowed up until race eve in most jurisdictions.
Bailey said Cumani was given a copy of the Australian Rules of Racing but was unaware of rule 64H which was introduced in June 2004 and which states that "a horse that has been subjected to any form of shock wave therapy shall be ineligible to race or take part in any trial in the seven days following such treatment".
Bailey said there were various forms of shock wave therapy and stewards were satisfied the manner in which Bauer received therapy to his hindquarters was at the lower end of the scale and did not enhance his performance in the Cup.
Research has shown shock wave therapy can result in locally decreased pain sensation (analgesia) and that the potential existed for horses to race while experiencing post-treatment analgesia.
Bailey said the investigation was to resume when Henderson returned from London next week but it came to a close on Wednesday after stewards took advice from RVL's senior Queen's Counsel, Dr Cliff Pannam.
"That advice is that in circumstances where the otherwise ineligibility of Bauer was caused as a result of actions taken by a veterinary surgeon specifically assigned by RVL to be responsible for the veterinary care of the visiting horse, and who Mr Cumani for that very reason was entitled to assume was fully familiar with the Australian Rules of Racing, AR64H can have no application," he said.
"In these circumstances it is not open to RVL stewards to apply the rule."
News of the investigation was broken on Wednesday but Bailey denied any cover-up and said stewards planned to make it public once it had been completed.
Bauer's shock wave therapy came to the attention of RVL as a result of a specific entry on an invoice for services from McInnes' practice.
The invoice was received by the RVL Veterinary Services Department on November 11, seven days after the Melbourne Cup, and delivered to stewards the next day.
Bailey wouldn't disclose how long it took RVL to pick up on the invoice entry but was satisfied stewards had carried out a thorough investigation and was satisfied with its legal advice.
"The investigation was stopped and completed based on our legal advice and it would be inappropriate to go in to the finer details of the investigation," he said.
"It is a high-level decision that has been made and we are wary of the fallout that might lead from that."
Melbourne Cup prizemoney is paid down to 10th place and Bailey said he was unconcerned about connections of horses that finished third to 11th launching legal action following Thursday's decision.
"Every day of the week we have to make decisions that we think are right and we believe this is the right decision," Bailey said.
"People can see it as a cop-out if they like but when you get high-level senior counsel advice I am satisfied we have gone down the right track."
Bailey said the future of McInnes and his practice as RVL-appointed vets was not a matter for the stewards to determine.
