Does it really matter who owns Leeds United?

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Does it really matter who owns Leeds United?

Postby leedshippriest on Sun Sep 30, 2012 1:14 pm

In 29 July 2011 a Parliamentary committee on football said that they were appalled by what was going on at Leeds United.

Ever since 2005, the reminded us, no one knew who owned Leeds United. Ken Bates said he didn’t own any Leeds shares, and was just the UK rep of Forward Sports Fund in the Cayman Islands – the company that owned Leeds. The company operates in Europe through an office in Switzerland and Swiss law makes it impossible to know what’s going on within its companies. The Football League insisted they be told who owned Leeds United. The club and the companies shrugged their shoulders and did nothing.

The suddenly Leeds was sold to Ken Bates, who is a tax exile in Monaco and who owns the club via another tax haven – Nevis.

As the attempts to find out what Bates was up to he banned the Guardian from the ground, and then banned the BBC from all admission except where it had a contract with the Football League that allowed it in.

Although no one knew who owned Leeds The Football League allowed Leeds to continue on the grounds that no one owned more than 10% of the club. It has always seemed a ludicrous statement. In the end it came out in a court case in Jersey that Mr Bates owned some of Leeds but had made “an error” when he had previously informed a court in Jersey that he and his long-term financial adviser, Patrick Murrin, each held one “management share” in Forward Sports Fund, the Cayman Islands-registered company which owns Leeds.
Yet in an affidavit sworn for the same court in May, Bates stated that in fact he does not have any shares in Forward at all. His previous statement, that he had been the joint owner, was “not correct,” he said, and “an error on my part”.

The affidavit, sworn in a legal action Leeds brought against a Jersey-based company, Admatch, for money Bates said was owed to the club, attached a letter from the director of Château Fiduciaire, financial administrators of Forward, based in Geneva. The letter said there are 10,000 “participating shares” in Forward, and the owners will not be revealed because Château Fiduciaire protects its clients’ anonymity unless ordered by a court to disclose them.

The Football League does not disclose who have been named as the owners of a club for the purpose of the fit-and-proper-person test, claiming that it cannot do so under the Data Protection Act. But the fact that the owners of Leeds United were shown as holders of 10,000 shares in a Cayman Islands company, whose administrators will not disclose their identities without a court order, does raise the issue – how could they have been checked as fit and proper.

That raises the possibility that Forward’s takeovers of Leeds, with Bates as the chairman, in 2005 then in 2007 when Forward bought the club from administrators, may never have been properly ratified by the League.

.
So MPs told Revenue and Customs who collect tax in the UK to investigate, and asked the FA to do some digging too. Nothing happened, except that Leeds is now being sold to GFH Capital of Bahrain who are owned by Gulf Finance House bank.
The auditors of GFH said in their last report that the company, “had accumulated losses of $300.69 million contractual obligations…” They said it was insolvent. There is talk now that GFH will buy Leeds in the style of the Glazers buying Scumchester United and put the debt on the balance sheet of Leeds.

Now GFH Capital has issued a press release in which it lays out plans for sustained investment in Leeds.

It is possible – although the fact is we still won’t exactly know who owns Leeds. But it is also possible that since there is no obvious source of all the investment, that Leeds will quite soon, once again, be bust. And we still won’t know who owns them.

So here’s the question: does it matter who owns a club? Well, yes it does, especially if you want to try and stop new buyers coming into clubs, loading them with debt and then either milking them or sinking them. It matters if you don’t want crooks running clubs. It matters if you don’t want clubs to be the heart of money laundering arenas. Indeed although no proof is given as yet there are stories circulating that football is indeed one of the main money laundering arenas in the world.

In fact it is getting to the point where the last thing that matters is the talent of players. All that matters is how to move the money. Given the huge amounts being paid to players, and the fact that we don’t know who owns clubs, then really we can’t be surprised.

“Hello Alfonso. Your salary is £250,000 a week.”

“Fine Mr Chairman”

“Now we have to remove some of that for taxation purposes, by law, so we will do that, and you will receive about £120,000 a week.”

“Oh”

“But fear not – you will get the rest paid through our Cayman Island account into your Cayman Island account. You’ll like the Cayman Islands – nip over and pick up a suitcase when you are a bit short of the readies.”

“Sure thing boss.”

Don’t believe me? I have actually seen that happen in the publishing trade. Why not football.


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