i can think of a maori battalion soldier from WWII who got shafted one his VC. i think the NZ government just settled that case with the crown actually.

Haane Manahi (died 1986) was a member of the Māori Battalion from New Zealand in World War II who was nominated for a Victoria Cross, but eventually received a special citation for bravery from the Queen.
In December 2005 the Waitangi Tribunal released their finding to a claim that was lodged by iwi Te Arawa, in 2000, for Manahi. Te Arawa lodged that Manahi should be posthumously awarded the Victoria Cross for bravery at the Battle of Takrouna in 1943. Sergeant Manahi led his men up a sheer limestone escarpment to capture positions; the following day he set out to capture Italian outposts. Four generals, including Bernard Freyberg and Bernard Montgomery had recommended that Manahi receive the Victoria Cross but this recommendation had been overruled in London.[1]
In October 2006 the New Zealand Minister of Defence announced that Manahi would be recognised by the presentation of an altar cloth, a personal letter from the Queen acknowledging his gallantry and a sword. The Victoria Cross could not be awarded as King George VI had ruled in 1949 that no further awards from World War II ought to be made.[2] The award was presented at a ceremony in Rotorua by Prince Andrew to Manahi's two sons, Rauawa and Geoffrey on 17 March 2007.[3]

‘God, King and Country’ recognition from Queen for Manahi

Ministry of Defence Media Release
7 October 2006
"The Government, Te Arawa people and the Manahi VC Committee have reached agreement with Buckingham Palace over a suitable way of honouring the gallantry of the late Lance Sergeant Haane Manahi", Defence Minister Phil Goff said today.
"In May this year I visited the Palace in London together with representatives of Te Arawa and the Manahi VC Committee to present a case for reconsidering the award of a Victoria Cross to Haane Manahi for his actions at Takrouna Ridge in North Africa in 1943.
"Our submission reflected our shared views that the extraordinary courage shown by Sergeant Manahi should, as was recommended by all his field commanders, have been recognised by the award of a Victoria Cross. The original recommendation was amended, in London in 1943, by persons unknown to a Distinguished Conduct Medal.
“In responding to the submission, the Palace reiterated Her Majesty’s great admiration for the remarkable bravery of Lance Sergeant Manahi, and noted that the reports of witnesses and commanders at the time are evidence that a recommendation for the award of the Victoria Cross was by no means unjustified.
"The Palace has explained, however, that The Queen places great importance upon the decision of her father, King George VI in 1949 that no further awards for World War II should be considered. Accordingly, The Queen has again determined that it would not be right to alter the award of the Distinguished Conduct Medal to Lance Sergeant Manahi after the lapse of such a long period of time.
"In communicating her view, however, the Palace expressed The Queen’s wish that careful thought be given to alternative ways in which further recognition could be given to the gallantry of Lance Sergeant Manahi, and indicated that The Queen would be pleased to be personally associated with it.
"All parties appreciate the close personal consideration given to the submission by The Queen. We accept and respect Her decision regarding the award of the Victoria Cross, and are honoured by Her desire to extend a personal token to Te Arawa, recognising the gallantry of Lance Sergeant Manahi.
"Accordingly, the government has been working with Te Arawa, the Manahi VC Committee and the Palace on a suitable form of alternative recognition for Lance Sergeant Manahi. The form of that recognition, as agreed between all parties, has been inspired by the famous refrain, 'for God! for King! and for Country!' from the marching song of the 28th (Maori) Battalion.
'For God' will be marked by the presentation of an altar cloth, for Saint Faith's Church, which faces the Tamatekapua Marae, Ohinemutu Village, Rotorua. Haane Manahi is buried in the military cemetery adjacent to Saint Faith's, known as Muruika, with fellow Te Arawa soldiers including those he served with in the 28th (Maori) Battalion.
'For King' will take the form of a letter from The Queen, acknowledging the gallantry of Haane Manahi, to be framed and hung in the Tamatekapua Meeting House alongside photos of Haane Manahi and The Queen.
'For Country' will be represented by a sword to be gifted on permanent loan to Te Arawa by The Queen. Te Arawa will in turn present the sword to the Chief of Defence Force along with a patu in memory of Haane Manahi. The sword will be displayed in the office of the Chief of Defence Force. The patu will be worn, on appropriate occasions as part of the dress of the Chief of Defence Force. These gifts will be a tangible link between Haane Manahi, The Queen, Te Arawa and all serving members of the Defence Force.
“The Queen has expressed Her gratitude for the sensitive and imaginative manner with which Her offer of recognition has been handled. There is still much to be done in terms of determining the time and nature of the presentation to Te Arawa of these items but I am delighted that agreement has been reached on a suitable way to honour the bravery and the memory of Haane Manahi", Mr Goff said.
ENDS

About 15 or so years ago there was talk of reinstating the New Zealand Cross (which predates the VC) with a new criteria and awarding him that.

Originally Posted by LeEnfield

There was a time when the VC first came out and the whole unit had fought with great bravery then a name would be picked out of a hat. there were several VC's in India that were won that way. Well after a while it was thought good form to award the VC to the Officer in charge of that unit rather than it be given to some bloody private. Now I am not saying that many of the officers were not brave but they got it just becuase they were an officer.

That is so. And when some subs went down the skipper got the gong. And i was told first hand of events in Korea when a VC was established for an uphill attack and the first up was thought to be right way for it to go. However, in the event, it did not come to the man who was first at all.

That's war I guess. Medals awards stem from recommendation by officers in charge.

I'm not so sure about the VC but the MoH had an interesting beginning. A civilian named Andrews went on a mission with soldiers to wreck havoc on the Confederate rail lines. Stealing a train (The General) his group did some daring stuff to get back to the Union lines.

The very first MoHs was awarded to his group except the leader - Andrews - could not because he was a civilian! Heres the story about it -

http://www.medalofhonor.com/AndrewsRaid.htm

There have been about six VC awarded to civilians but this died out I think around the time of WW1

I feel, that to say that all VCs were undeserved is rather taking a pessimistic view of the whole system of evaluation of awarding gallantry recognitions as well as recognizing distinguished services whether in war or peace. The old Indian Army during the British Raj also had a number of Indians who were decorated with the VC and quite a few of them happened to be just plain privates or sepoys or naiks equivalent to corporals. This despite the fact that there were awards reserved exslusively for the Indian Ranks like the IDSM, IOBE, etc. Although one doesn't deny that many a times injustices are done and political considerations override merit yet to generalise is to denigrate some of the true heroes who won these awards by sheer guts, glory and gore.