Queensland Racing Limited (QRL) suspended the licence of well known Townsville racing identity Terry Butts last night.

The suspension follows a show cause hearing by the QRL licensing committee on October 7 where the committee considered a number of statements and claims made by Mr Butts in a story published in the August 28 edition of the North Queensland Register.

Mr Butts wrote in the page three story that the "state of racing in Queensland and in particular country Queensland is in chaos".

Mr Butts' story claimed Queensland Racing chairman Bob Bentley and committeeman Bill Ludwig were to face a Crime and Misconduct Commission (CMC) investigation into vote rorting.

The story also alleged a highly placed QRL stipendiary steward in Brisbane was furiously defending sexual harassment allegations, and that forced relocation of stewards to different areas throughout the State was causing high emotion within the ranks.

QRL licensing committee chair Peter Smith, said under QRL's licensing scheme policy, all licensees must continue to meet suitability requirements.

"A licensee may be asked to show cause why action should not be taken on the grounds that they are not a fit and proper person to be licensed," Mr Smith said.

"The policy states that the propriety of the person is assessed on the basis of general behaviour and conduct.

"It is not limited to behaviour in the thoroughbred racing industry.

"It considers whether any improper conduct is likely to impact on both the person's reputation and more broadly on the reputation of other licensees and the thoroughbred racing industry."

Mr Butts was issued a Show Cause Notice on the same day the article was published.

In a statement released today, QRL has labelled the claims within the article as false and "that Mr Butts had not sought to verify any of the matters with QRL".

Mr Butts said he would contest the decision through legal means.

"I don't think they've got a case," Mr Butts told the North Queensland Register today.

"Everything in that story is 100pc right."

At no time did QRL contact the North Queensland Register to ask for a clarification or retraction of the story.