I should note that the Guardian's report is not an entirely accurate reflection of the Adjudicator's decision. The headline and first paragraph are both factually incorrect.
The issue is that the school's admission criteria state that shortest walking distance is used as the tie breaker but they were actually using shortest driving distance. This resulted in a pedestrianised road being excluded from calculations which in turn meant that children from an estate with a high proportion of social housing were less likely to be admitted.
The adjudicator's decision speculates that this may have been an attempt to manipulate admissions against this estate but falls short of actually drawing that conclusion. The adjudicator admits that other walking routes may be affected and that there may be other areas that are similarly disadvantaged by the school's failure to follow its published admission arrangements. I don't know the school or the area so I have no idea whether the problem purely affected this estate or if others were also affected.
The school's approach to the Adjudicator was extremely ill advised. They did themselves no favours whatsoever, making all kinds of irrelevant arguments, attacking the complainant, attacking the Adjudicator for even considering the case and failing to address the issue. The school says it has accepted the recommendations but it "has taken legal advice and is in the process of challenging a number of the assertions in the preliminary report." Also ill advised in my view.
Both the LA and the Admissions Forum (there must be one by law) have been asleep on the job. Both should have picked this up and either got the school to fix it or referred it to the Adjudicator years ago.
Sadly this school is not alone. I have come across community schools, faith schools and academies that do not follow their published admission criteria and/or have unfair criteria.