Post by QPR Report on Feb 3, 2010 7:27:13 GMT
David Conn/Guardian
Previous Blog home Portsmouth continue to play out their tragedy as farcePortsmouth's employment of a fraudster in Daniel Azougy is symptomatic of a club lurching towards disaster
Daniel Azougy - convicted of fraud in Israel – plays an important role in the day-to-day running of Portsmouth. Photograph: Daniel Hambury/Empics Sport
In the state Portsmouth are in, limping towards a winding-up petition for unpaid PAYE, it does not seem ideal to have Daniel Azougy, a convicted fraudster, apparently in charge of day‑to-day business. Club sources confirmed that Azougy personally negotiated this week's sales of the centre-half Younes Kaboul, to Tottenham, for £5m and the goalkeeper Asmir Begovic, to Stoke, for £3.25m.
Mark Jacob, the London solicitor who has been executive director at Portsmouth since the takeover by the Saudi Arabian businessman Ali al-Faraj, is understood to have refused to sign off the Begovic deal because he believed the club should have secured more for the outstanding 22-year-old. Jacob, club sources said, has become the latest at Portsmouth to consider resigning. Peter Storrie, the chief executive, has complained in recent weeks that he has not been involved in negotiating player sales; he is understood to have signed off the Begovic deal after Azougy negotiated the price.
Azougy, a former lawyer in Israel, was convicted of fraud and deception offences in Tel Aviv in 2001, for which he served a five-month jail sentence, with 10 more months suspended. In 2002, he was disqualified by the Israel Bar Association from acting as a lawyer for 14 years after being found guilty of obstructing the course of justice by showing false documents to judges. As recently as last March, Azougy was fined, handed a suspended prison sentence, and did community service after pleading guilty to handing false documents to the Israeli stock exchange.
The report of the 2001 case in the Israeli newspaper Yedioth Ahronoth quoted the judge, David Rozen, describing Azougy as: "A sophisticated lawyer willing to do anything to reach his own personal goals. He lied, cheated, used a forged document and stole money from his clients."
Azougy was installed at Portsmouth last October to work on the club's finances after the takeover. Since then, he has declined interviews, but representatives of Faraj have described Azougy as a capable negotiator with expertise in insolvency situations.
Under the Premier League's fit and proper person test, nobody convicted of dishonesty offences can act as a club director, but the league does not believe Azougy's position can be classed as that senior, so it is powerless to act. "We have asked numerous times for clarification of Mr Azougy's role," a Premier League spokesman said. "Each time the board has said he is a consultant on a short-term contract."
The spokesman added that in regular meetings the Premier League holds with Portsmouth to clarify the club's parlous position, it insists Azougy must not be present. "We are still actively pursuing the precise role Mr Azougy is fulfilling," he said, "to ensure it does fall short of acting as a director or shadow director."
The Premier League chief executive, Richard Scudamore, and secretary, Mike Foster, have agreed to meet representatives of the Portsmouth Supporters Trust and the fans' SOS group this Friday to discuss the club's crisis. The trust wrote to Scudamore at the weekend calling on the league to take "direct action" and intervene in the running of the club, saying that if Pompey falls into liquidation after 112 years it would be "a betrayal of generations of loyal supporters".
Portsmouth are living hand to mouth as the new owners have failed to secure new investment, with the players and staff not paid on time this week for the fourth month in a row. The club faces a winding-up petition next Wednesday for around £6m owed to Her Majesty's Revenue and Customs, although it has appealed against the VAT element of the bill, which the board hopes will at least delay the petition hearing.
The Hong Kong businessman Balram Chainrai, who has links with the Israeli businessmen connected to Faraj, has loaned what the club said amounted to £20m and has two mortgages over the club. One, registered on 6 October, gives Chainrai's company Portpin, which is registered in the British Virgin Islands tax haven, security over Fratton Park. The other, registered on 7 January, secures for Portpin "the whole of [Portmouth's] undertaking and all its property and assets".
That means that if the club does fall into administration or liquidation, Chainrai will be able to take possession of the club itself, and Fratton Park, possibly leaving HMRC and the club's mounting list of other creditors unpaid.
It is not clear whether the Premier League does have the power actually to take over a club, but it did withhold the January TV payment of £7m so that other clubs owed money could be paid, including Chelsea, Tottenham (still short of instalments from when Portsmouth originally signed Kaboul in August 2008) and the French clubs Lens and Rennes. This week the league used portions of the Kaboul sale proceeds to pay directly Watford instalments for Tommy Smith and Mike Williamson, and Chelsea, again, to whom Portsmouth still owe part of the £4m purchase price for Glen Johnson, signed in August 2007.
All this comes just months after Faraj's takeover which was supposed to rescue Portsmouth from meltdown. When, in the summer, Alexandre Gaydamak, Portsmouth's former owner, sold the stricken club to the Dubai investor Sulaiman al-Fahim, Storrie declared himself "shattered" because he had been working with Faraj. Storrie described Faraj and the group around him as "very, very rich people" he had found "with the help of [the Israeli agent] Pini Zahavi." Storrie said then: "The people I had lined up would have taken the club on to a level you would not quite believe."
Less than two months later, Faraj did buy the club from Fahim, who could not fund its haemorrhaging spending, but the level he has taken it to is not the one Storrie envisaged. Faraj, as Gaydamak's advisors explained back then, is no billionaire, but a self-made businessman of relatively modest wealth, who has never been to Fratton Park. His brother, Ahmed, invests in property in London, and has done deals with an Israeli lawyer, Yoram Yusepov, who is understood to have been the initial contact for Zahavi.
The group was intending to borrow money from EFG, a private bank based in Mayfair, but failed to secure it, so turned instead to the loan from Chainrai, who has his mortgages as security. Although the group is said to be still searching for investment, and there has been talk of interested parties, they have not found further funding.
Thus Pompey became the Premier League's most severe case of "living the dream" – West Ham under their Icelandic ownership possibly excepted – since Leeds collapsed in 2003. Portsmouth have failed to use their Premier League windfall or copious borrowings to expand Fratton Park, instead signing a team of stars for Harry Redknapp which a 20,000-seat stadium could not finance. They won the FA Cup, as recently as May 2008, then the banks wanted their money back, and Gaydamak said he could pump no further money in.
Portsmouth plummeted, as quickly as that, from Wembley to winding-up petition, then hired a fraudster to sort it out.
Additional reporting, Ouriel Daskal, of the Israeli business magazine, Calcalist
www.guardian.co.uk/sport/david-conn-inside-sport-blog/2010/feb/03/portsmouth-mark-jacob-premier-league
Previous Blog home Portsmouth continue to play out their tragedy as farcePortsmouth's employment of a fraudster in Daniel Azougy is symptomatic of a club lurching towards disaster
Daniel Azougy - convicted of fraud in Israel – plays an important role in the day-to-day running of Portsmouth. Photograph: Daniel Hambury/Empics Sport
In the state Portsmouth are in, limping towards a winding-up petition for unpaid PAYE, it does not seem ideal to have Daniel Azougy, a convicted fraudster, apparently in charge of day‑to-day business. Club sources confirmed that Azougy personally negotiated this week's sales of the centre-half Younes Kaboul, to Tottenham, for £5m and the goalkeeper Asmir Begovic, to Stoke, for £3.25m.
Mark Jacob, the London solicitor who has been executive director at Portsmouth since the takeover by the Saudi Arabian businessman Ali al-Faraj, is understood to have refused to sign off the Begovic deal because he believed the club should have secured more for the outstanding 22-year-old. Jacob, club sources said, has become the latest at Portsmouth to consider resigning. Peter Storrie, the chief executive, has complained in recent weeks that he has not been involved in negotiating player sales; he is understood to have signed off the Begovic deal after Azougy negotiated the price.
Azougy, a former lawyer in Israel, was convicted of fraud and deception offences in Tel Aviv in 2001, for which he served a five-month jail sentence, with 10 more months suspended. In 2002, he was disqualified by the Israel Bar Association from acting as a lawyer for 14 years after being found guilty of obstructing the course of justice by showing false documents to judges. As recently as last March, Azougy was fined, handed a suspended prison sentence, and did community service after pleading guilty to handing false documents to the Israeli stock exchange.
The report of the 2001 case in the Israeli newspaper Yedioth Ahronoth quoted the judge, David Rozen, describing Azougy as: "A sophisticated lawyer willing to do anything to reach his own personal goals. He lied, cheated, used a forged document and stole money from his clients."
Azougy was installed at Portsmouth last October to work on the club's finances after the takeover. Since then, he has declined interviews, but representatives of Faraj have described Azougy as a capable negotiator with expertise in insolvency situations.
Under the Premier League's fit and proper person test, nobody convicted of dishonesty offences can act as a club director, but the league does not believe Azougy's position can be classed as that senior, so it is powerless to act. "We have asked numerous times for clarification of Mr Azougy's role," a Premier League spokesman said. "Each time the board has said he is a consultant on a short-term contract."
The spokesman added that in regular meetings the Premier League holds with Portsmouth to clarify the club's parlous position, it insists Azougy must not be present. "We are still actively pursuing the precise role Mr Azougy is fulfilling," he said, "to ensure it does fall short of acting as a director or shadow director."
The Premier League chief executive, Richard Scudamore, and secretary, Mike Foster, have agreed to meet representatives of the Portsmouth Supporters Trust and the fans' SOS group this Friday to discuss the club's crisis. The trust wrote to Scudamore at the weekend calling on the league to take "direct action" and intervene in the running of the club, saying that if Pompey falls into liquidation after 112 years it would be "a betrayal of generations of loyal supporters".
Portsmouth are living hand to mouth as the new owners have failed to secure new investment, with the players and staff not paid on time this week for the fourth month in a row. The club faces a winding-up petition next Wednesday for around £6m owed to Her Majesty's Revenue and Customs, although it has appealed against the VAT element of the bill, which the board hopes will at least delay the petition hearing.
The Hong Kong businessman Balram Chainrai, who has links with the Israeli businessmen connected to Faraj, has loaned what the club said amounted to £20m and has two mortgages over the club. One, registered on 6 October, gives Chainrai's company Portpin, which is registered in the British Virgin Islands tax haven, security over Fratton Park. The other, registered on 7 January, secures for Portpin "the whole of [Portmouth's] undertaking and all its property and assets".
That means that if the club does fall into administration or liquidation, Chainrai will be able to take possession of the club itself, and Fratton Park, possibly leaving HMRC and the club's mounting list of other creditors unpaid.
It is not clear whether the Premier League does have the power actually to take over a club, but it did withhold the January TV payment of £7m so that other clubs owed money could be paid, including Chelsea, Tottenham (still short of instalments from when Portsmouth originally signed Kaboul in August 2008) and the French clubs Lens and Rennes. This week the league used portions of the Kaboul sale proceeds to pay directly Watford instalments for Tommy Smith and Mike Williamson, and Chelsea, again, to whom Portsmouth still owe part of the £4m purchase price for Glen Johnson, signed in August 2007.
All this comes just months after Faraj's takeover which was supposed to rescue Portsmouth from meltdown. When, in the summer, Alexandre Gaydamak, Portsmouth's former owner, sold the stricken club to the Dubai investor Sulaiman al-Fahim, Storrie declared himself "shattered" because he had been working with Faraj. Storrie described Faraj and the group around him as "very, very rich people" he had found "with the help of [the Israeli agent] Pini Zahavi." Storrie said then: "The people I had lined up would have taken the club on to a level you would not quite believe."
Less than two months later, Faraj did buy the club from Fahim, who could not fund its haemorrhaging spending, but the level he has taken it to is not the one Storrie envisaged. Faraj, as Gaydamak's advisors explained back then, is no billionaire, but a self-made businessman of relatively modest wealth, who has never been to Fratton Park. His brother, Ahmed, invests in property in London, and has done deals with an Israeli lawyer, Yoram Yusepov, who is understood to have been the initial contact for Zahavi.
The group was intending to borrow money from EFG, a private bank based in Mayfair, but failed to secure it, so turned instead to the loan from Chainrai, who has his mortgages as security. Although the group is said to be still searching for investment, and there has been talk of interested parties, they have not found further funding.
Thus Pompey became the Premier League's most severe case of "living the dream" – West Ham under their Icelandic ownership possibly excepted – since Leeds collapsed in 2003. Portsmouth have failed to use their Premier League windfall or copious borrowings to expand Fratton Park, instead signing a team of stars for Harry Redknapp which a 20,000-seat stadium could not finance. They won the FA Cup, as recently as May 2008, then the banks wanted their money back, and Gaydamak said he could pump no further money in.
Portsmouth plummeted, as quickly as that, from Wembley to winding-up petition, then hired a fraudster to sort it out.
Additional reporting, Ouriel Daskal, of the Israeli business magazine, Calcalist
www.guardian.co.uk/sport/david-conn-inside-sport-blog/2010/feb/03/portsmouth-mark-jacob-premier-league