Post by QPR Report on Mar 21, 2010 7:46:52 GMT
Way to go!
The Sunday Times March 21, 2010
Judge criticises conduct of Portsmouth administrator
HM Revenue & Customs has clashed twice before with the accountant appointed by the football club
(Lewis Whyld)
Michael Gillard
THE administrator responsible for investigating Portsmouth’s opaque financial dealings and mismanagement has been severely criticised by a High Court judge for “manifestly inappropriate” conduct during a recent insolvency.
Andrew Andronikou is also under investigation over another collapsed company, The Sunday Times can reveal.
The first case centres on allegations by a creditor of fabricated loans and vote rigging in the personal insolvency of a fashion tycoon. In a separate corporate insolvency last year, HM Revenue & Customs (HMRC) forced Andronikou’s replacement with a new liquidator.
Andronikou has promised to unravel the tangled web of ownership behind Portsmouth and to report any money-laundering activity or suspicious commission payments. However, these recent insolvencies raise questions about his independence and willingness to investigate fully the financial claims of those who engage his services and others connected to the Premier League club.
Related Links
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HMRC, which is owed £11.6m in PAYE and Vat, looked into Andronikou’s recent past when preparing its legal challenge to the administration and his appointment by Balram Chainrai, the club’s owner. The taxman had queried the validity of a £13.5m debenture held by Portpin, the Hong Kong businessman’s company.
On Tuesday HMRC accepted the validity of the administration to save costs from protracted litigation, it said. However, according to one official, Andronikou’s background was “not helping” to allay residual concerns about financial transactions at the club.
Andronikou expressed “surprise” that the taxman had dug into his past. He said HMRC was understandably upset because since losing its preferred creditor status in 2003 it must stand in line with other unsecured creditors behind “the elevated status of football creditors”. Andronikou, a partner at UHY Hacker Young, the accountants, denied acting improperly and suggested he was the victim of a smear campaign by rivals.
The most damaging criticism of Andronikou is within a High Court ruling in December 2008. An appeal judge overturned an attempt by Shami Ahmed, the founder of Joe Bloggs, the clothing company, to avoid bankruptcy through an individual voluntary arrangement (IVA) handled by Andronikou.
HMRC and a spread-betting firm then known as Tradindex had opposed the IVA, which needed approval from three-quarters of Ahmed’s creditors. The fashion boss had run up more than £4m in gambling debts. But the IVA was successful because Andronikou had accepted the validity of £8m in alleged loans to Ahmed from members of his family, thereby making them creditors and giving them a vote on the IVA.
At an appeal by Tradindex, the judge took a different view and disallowed £5m of these family loans, thereby overturning Ahmed’s IVA, and he was forced into bankruptcy.
The judgment said: “Mr Andronikou’s conduct in these proceedings, particularly in relation to evidence filed by him on behalf [of Ahmed and his family], was manifestly inappropriate.” The judge also found that Andronikou “did fail to meet the standard to be expected of a reasonably competent insolvency practitioner”.
Andronikou told The Sunday Times that the vote-rigging allegation was “absolute bollocks” and explained he had relied on his underlings to assess the validity of the Ahmed family claims.
The second case involves the voluntary liquidation of Aqua, a London-based commercial laundry that serviced various top hotels. The taxman disputed a £500,000 debt, which the sole director claimed his insolvent company owed him. But last May Andronikou agreed to be replaced as the liquidator ahead of a High Court hearing.
Last night Stephen Hunt, the new liquidator chosen by HMRC, confirmed that he is investigating “the director and Andronikou’s conduct in the run-up to the insolvency”.
Andronikou said it was a “pragmatic” decision to step down as Aqua’s liquidator because the case had become “too political”. He again described any suggestion of impropriety as “bollocks”.
HMRC is separately prosecuting Peter Storrie, the former Portsmouth chief executive, and Harry Redknapp, the former manager, for alleged tax offences.
Andronikou does not believe HMRC is trying to replace him as administrator to get access to internal correspondence and the club’s accounts.
An HMRC spokesman said that it would be “keeping a watchful eye”.
www.timesonline.co.uk/tol/sport/football/premier_league/portsmouth/article7069905.ece
The Sunday Times March 21, 2010
Judge criticises conduct of Portsmouth administrator
HM Revenue & Customs has clashed twice before with the accountant appointed by the football club
(Lewis Whyld)
Michael Gillard
THE administrator responsible for investigating Portsmouth’s opaque financial dealings and mismanagement has been severely criticised by a High Court judge for “manifestly inappropriate” conduct during a recent insolvency.
Andrew Andronikou is also under investigation over another collapsed company, The Sunday Times can reveal.
The first case centres on allegations by a creditor of fabricated loans and vote rigging in the personal insolvency of a fashion tycoon. In a separate corporate insolvency last year, HM Revenue & Customs (HMRC) forced Andronikou’s replacement with a new liquidator.
Andronikou has promised to unravel the tangled web of ownership behind Portsmouth and to report any money-laundering activity or suspicious commission payments. However, these recent insolvencies raise questions about his independence and willingness to investigate fully the financial claims of those who engage his services and others connected to the Premier League club.
Related Links
Portsmouth looking to Lloyd bid
Revenue drops Pompey legal challenge
HMRC, which is owed £11.6m in PAYE and Vat, looked into Andronikou’s recent past when preparing its legal challenge to the administration and his appointment by Balram Chainrai, the club’s owner. The taxman had queried the validity of a £13.5m debenture held by Portpin, the Hong Kong businessman’s company.
On Tuesday HMRC accepted the validity of the administration to save costs from protracted litigation, it said. However, according to one official, Andronikou’s background was “not helping” to allay residual concerns about financial transactions at the club.
Andronikou expressed “surprise” that the taxman had dug into his past. He said HMRC was understandably upset because since losing its preferred creditor status in 2003 it must stand in line with other unsecured creditors behind “the elevated status of football creditors”. Andronikou, a partner at UHY Hacker Young, the accountants, denied acting improperly and suggested he was the victim of a smear campaign by rivals.
The most damaging criticism of Andronikou is within a High Court ruling in December 2008. An appeal judge overturned an attempt by Shami Ahmed, the founder of Joe Bloggs, the clothing company, to avoid bankruptcy through an individual voluntary arrangement (IVA) handled by Andronikou.
HMRC and a spread-betting firm then known as Tradindex had opposed the IVA, which needed approval from three-quarters of Ahmed’s creditors. The fashion boss had run up more than £4m in gambling debts. But the IVA was successful because Andronikou had accepted the validity of £8m in alleged loans to Ahmed from members of his family, thereby making them creditors and giving them a vote on the IVA.
At an appeal by Tradindex, the judge took a different view and disallowed £5m of these family loans, thereby overturning Ahmed’s IVA, and he was forced into bankruptcy.
The judgment said: “Mr Andronikou’s conduct in these proceedings, particularly in relation to evidence filed by him on behalf [of Ahmed and his family], was manifestly inappropriate.” The judge also found that Andronikou “did fail to meet the standard to be expected of a reasonably competent insolvency practitioner”.
Andronikou told The Sunday Times that the vote-rigging allegation was “absolute bollocks” and explained he had relied on his underlings to assess the validity of the Ahmed family claims.
The second case involves the voluntary liquidation of Aqua, a London-based commercial laundry that serviced various top hotels. The taxman disputed a £500,000 debt, which the sole director claimed his insolvent company owed him. But last May Andronikou agreed to be replaced as the liquidator ahead of a High Court hearing.
Last night Stephen Hunt, the new liquidator chosen by HMRC, confirmed that he is investigating “the director and Andronikou’s conduct in the run-up to the insolvency”.
Andronikou said it was a “pragmatic” decision to step down as Aqua’s liquidator because the case had become “too political”. He again described any suggestion of impropriety as “bollocks”.
HMRC is separately prosecuting Peter Storrie, the former Portsmouth chief executive, and Harry Redknapp, the former manager, for alleged tax offences.
Andronikou does not believe HMRC is trying to replace him as administrator to get access to internal correspondence and the club’s accounts.
An HMRC spokesman said that it would be “keeping a watchful eye”.
www.timesonline.co.uk/tol/sport/football/premier_league/portsmouth/article7069905.ece
