Matthaus turns down Racing role
Racing, struggling at the bottom of the Apertura standings and in danger of relegation, thought they had met all Matthaus's demands and were shocked by his refusal.
"He started asking for things that hadn't been discussed, we told him to come to talk about them and as he didn't we brought negotiations to an end," Molina told the TyC television station.
"It's not very serious what Matthaus did. Now we'll go looking for a coach in the domestic game."
Local media said one of Matthaus's conditions had been a guarantee of modelling work in Buenos Aires for his 22-year-old Ukrainian fourth wife Lilian Chudinova.
Racing, who have five points and no wins from 11 matches, have been under caretaker Juan Barbas, a former Argentina midfielder, for three games since Ricardo Caruso Lombardi resigned this month.
The club and their fans had been excited at the prospect of Matthaus taking charge of the team, believing him to be a great motivator.
However, although West Germany's 1990 World Cup-winning captain had a glittering playing career, the 48-year-old has had little success as a coach.