Post by Macmoish on Aug 25, 2010 7:45:30 GMT
Guardian/David Conn
Leicester 'takeover' yet to be ratified by Football League• Owners must pass 'fit and proper persons' test
• Mandaric 'supports and welcomes' new rule
The sale of Leicester City announced a fortnight ago by the chairman Milan Mandaric has not yet been approved by the Football League. In an apparent breach of new league rules introduced this month, no prior notification was given by Leicester as to who the new owners and directors were, so that they could be cleared as "fit and proper" people.
The new "owners and directors" test was adopted by the league on 4 August, when its clubs voted to accept the increased £66.24m in "solidarity" payments from the Premier League in each of the next three seasons. The rule states that clubs must give "pre-notification" to the League of incoming owners and directors, who must certify that they do not have current convictions for fraud-related offences.
Mandaric announced on 12 August, eight days later, that the consortium, led by the 25-year-old Thai Aiyawatt Raksriaksorn, "has acquired" Leicester City. However, at that point no details are understood to have been sent to the league. Information has now been presented on the prospective new owners and the financial backing they have, but the League is understood still to require further detail and so has not approved the takeover.
"We cannot ratify the takeover until all necessary information has been received and proves satisfactory," a spokesman said.
Mandaric said Leicester City "both supports and welcomes the new rules" and suggested that the failure to provide information to the League in advance was because new rules require a "bedding-in period
www.guardian.co.uk/football/2010/aug/25/leicester-city-takeover-milan-mandaric
Guardian/David Conn
Leicester takeover muddies waters as Football League seeks transparencyDespite a round of press conferences and interviews, Milan Mandaric has still not confirmed the basic details of Leicester's sale
When Greg Clarke swept into his job as the Football League's new chairman in March, he repeatedly stressed that his central mission was to establish greater transparency in the dealings of clubs and the league. So it is neatly fateful that the first major test of that commitment has been presented by the club he supports and where he was a director for seven years: Leicester City.
A fortnight ago the Foxes' owner, Milan Mandaric, who is currently on bail facing three charges of tax fraud allegedly committed during his time in charge of Portsmouth, announced that "a new international consortium has acquired Leicester City". Mandaric said the consortium, led by the 25-year-old Thai businessman Aiyawatt Raksriaksorn, whose family owns the King Power duty free company in Thailand, will in future include other investors.
Leicester's fans were told Mandaric will continue as the club's chairman and "a stakeholder" in the new consortium, in a deal which will: "Empower Leicester City, bringing new strength and energy and offering a tremendous opportunity."
Yet despite a round of press conferences and interviews, Mandaric has still not confirmed publicly the basic details of the takeover: whether he has sold out completely, who the investors are and in what proportions they will own the club, and how much they have paid him.
Although the deal was stated to have been done, with the club "acquired" on 12 August, at that point, no information had been sent to the league. That was an apparent breach of the league's new "owners and directors" rule, adopted just nine days earlier, which requires clubs to "pre-notify" the league in advance of a takeover of who the new owners and directors are, so they can be passed as "fit and proper" people.
Even now, full details on the takeover and new owners have not been received by the league. "Some good, helpful information has been provided," a league spokesman said, "but there is still more to come. The takeover has not been approved."
Championship clubs must also now submit financial information when they are taken over, to prove the new owners have the money to keep a club alive – a rule introduced by the Premier League after last season's Fratton Park horror show. At Portsmouth, the club Mandaric previously owned, Alexandre Gaydamak, whom he sold to, withdrew his funding, then a parade of new owners failed to prevent a hideous administration.
Leicester have now submitted some financial information, but league sources say that too is not yet complete. Mandaric, in response to questions asked by the Guardian, suggested the required details had not been sent to the league in advance because the new rules required a "bedding-in period". The club, he said, "welcomes the new rules" and has now "submitted the relevant documentation regarding the proposed new directors and will continue to have dialogue with the league to ensure a smooth transition."
Some well-informed sources say the deal has not in fact gone through yet, that the Thai investors are still conducting due diligence, inspecting Leicester's finances, which have recently recorded huge losses. In response, Mandaric said: "The parties are satisfied with the due diligence that has been performed."
He did not explain the deal's structure or the price he is being paid, reiterating only that he remains chairman and "a stakeholder". However James Bryce, a senior associate at Hammonds solicitors, who acted for Mandaric, said his client is selling out completely, not retaining any shareholding. Bryce would not, though, say whether the investors have yet paid Mandaric. "I cannot talk about my client's financial situation," he said.
The league's new rules require clubs to publish the names of all shareholders owning stakes of 10% or more, so at some point the new Walkers Stadium regime will have to be made clear.
Mandaric was reported to have received £47m when he sold Portsmouth to Gaydamak in two tranches in January and July 2006, and he stayed as Pompey's chairman too, before resigning three months later. He moved to buy Leicester in February 2007, committing to pay £600,000 for the shares, and to invest a further £9m in the club, which was then struggling in the Championship.
Clarke had been Leicester's chairman when the club went into administration following relegation from the Premier League in 2002, and was still a director when the club emerged from insolvency paying all creditors 10p in the pound, including HM Revenue and Customs, which was owed around £7m. He remained on the board until January 2007, when he resigned along with two other directors because, according to a club statement, they "felt unable to recommend" the Mandaric deal. The Football League is stressing that Clarke will not involve himself in the current process of ratifying Mandaric's sale.
When explaining his reasons for the deal, Mandaric has pointed to the millions Leicester have lost in the effort to remain competitive in the Championship. Like most clubs not gilded with parachute payments – which, following the 4 August agreement, have been hugely increased, with clubs relegated from the Premier League receiving £48m each over four years – Leicester have seriously overspent. In the year to 31 May 2008 the club lost £14m, having spent more than the club's entire income on wages alone, yet under Ian Holloway, who succeeded Gary Megson as manager in November 2007, were still relegated to League One. Promotion in 2009 was won under Nigel Pearson with the club again overstretching, making a £6m loss.
In January this year Mandaric was charged jointly with Harry Redknapp, formerly his manager at Portsmouth, with two counts of cheating the public revenue; the Crown Prosecution Service alleging that Mandaric paid Redknapp $295,000 "via a bank account in Monaco, evading the tax and national insurance contributions due."
Leicester's accounts for 2008-09, published on 14 May, stated that to cope with the losses, Mandaric's trust, which owns the club via a holding company registered in the low tax US state of Delaware, loaned City £6m, and that a further £4m of "new funding," most likely also loans, were supplied. In his chairman's statement, Mandaric said: "I am fully committed to standing by this club, whatever its financial needs."
Two weeks later, he was charged with a further count of cheating the public revenue, this time jointly with Peter Storrie, his former chief executive at Portsmouth. That relates to a payment allegedly made to terminate the midfielder Eyal Berkovic's contract at Pompey, without paying the tax due.
Mandaric has stated he is "astounded" at the charges, and denies any wrongdoing, as do Redknapp and Storrie. He told the Guardian that his decision to sell Leicester has "absolutely nothing to do with the HMRC investigations."
The acquisition of Leicester by Raksriaksorn and the other so-far unnamed consortium members is another example of a growing tendency among investors to look to Championship clubs, which they can buy more cheaply than Premier League clubs, then hope to fund to the £90m (at least) top-flight bonanza.
Leicester have some progress to make before they clamber back to the Premier League, and Greg Clarke, their former chairman, also has a way to go before his promised new dawn of transparency truly breaks over the Football League.
www.guardian.co.uk/sport/david-conn-inside-sport-blog/2010/aug/25/leicester-takeover-football-league-transparency
Leicester 'takeover' yet to be ratified by Football League• Owners must pass 'fit and proper persons' test
• Mandaric 'supports and welcomes' new rule
The sale of Leicester City announced a fortnight ago by the chairman Milan Mandaric has not yet been approved by the Football League. In an apparent breach of new league rules introduced this month, no prior notification was given by Leicester as to who the new owners and directors were, so that they could be cleared as "fit and proper" people.
The new "owners and directors" test was adopted by the league on 4 August, when its clubs voted to accept the increased £66.24m in "solidarity" payments from the Premier League in each of the next three seasons. The rule states that clubs must give "pre-notification" to the League of incoming owners and directors, who must certify that they do not have current convictions for fraud-related offences.
Mandaric announced on 12 August, eight days later, that the consortium, led by the 25-year-old Thai Aiyawatt Raksriaksorn, "has acquired" Leicester City. However, at that point no details are understood to have been sent to the league. Information has now been presented on the prospective new owners and the financial backing they have, but the League is understood still to require further detail and so has not approved the takeover.
"We cannot ratify the takeover until all necessary information has been received and proves satisfactory," a spokesman said.
Mandaric said Leicester City "both supports and welcomes the new rules" and suggested that the failure to provide information to the League in advance was because new rules require a "bedding-in period
www.guardian.co.uk/football/2010/aug/25/leicester-city-takeover-milan-mandaric
Guardian/David Conn
Leicester takeover muddies waters as Football League seeks transparencyDespite a round of press conferences and interviews, Milan Mandaric has still not confirmed the basic details of Leicester's sale
When Greg Clarke swept into his job as the Football League's new chairman in March, he repeatedly stressed that his central mission was to establish greater transparency in the dealings of clubs and the league. So it is neatly fateful that the first major test of that commitment has been presented by the club he supports and where he was a director for seven years: Leicester City.
A fortnight ago the Foxes' owner, Milan Mandaric, who is currently on bail facing three charges of tax fraud allegedly committed during his time in charge of Portsmouth, announced that "a new international consortium has acquired Leicester City". Mandaric said the consortium, led by the 25-year-old Thai businessman Aiyawatt Raksriaksorn, whose family owns the King Power duty free company in Thailand, will in future include other investors.
Leicester's fans were told Mandaric will continue as the club's chairman and "a stakeholder" in the new consortium, in a deal which will: "Empower Leicester City, bringing new strength and energy and offering a tremendous opportunity."
Yet despite a round of press conferences and interviews, Mandaric has still not confirmed publicly the basic details of the takeover: whether he has sold out completely, who the investors are and in what proportions they will own the club, and how much they have paid him.
Although the deal was stated to have been done, with the club "acquired" on 12 August, at that point, no information had been sent to the league. That was an apparent breach of the league's new "owners and directors" rule, adopted just nine days earlier, which requires clubs to "pre-notify" the league in advance of a takeover of who the new owners and directors are, so they can be passed as "fit and proper" people.
Even now, full details on the takeover and new owners have not been received by the league. "Some good, helpful information has been provided," a league spokesman said, "but there is still more to come. The takeover has not been approved."
Championship clubs must also now submit financial information when they are taken over, to prove the new owners have the money to keep a club alive – a rule introduced by the Premier League after last season's Fratton Park horror show. At Portsmouth, the club Mandaric previously owned, Alexandre Gaydamak, whom he sold to, withdrew his funding, then a parade of new owners failed to prevent a hideous administration.
Leicester have now submitted some financial information, but league sources say that too is not yet complete. Mandaric, in response to questions asked by the Guardian, suggested the required details had not been sent to the league in advance because the new rules required a "bedding-in period". The club, he said, "welcomes the new rules" and has now "submitted the relevant documentation regarding the proposed new directors and will continue to have dialogue with the league to ensure a smooth transition."
Some well-informed sources say the deal has not in fact gone through yet, that the Thai investors are still conducting due diligence, inspecting Leicester's finances, which have recently recorded huge losses. In response, Mandaric said: "The parties are satisfied with the due diligence that has been performed."
He did not explain the deal's structure or the price he is being paid, reiterating only that he remains chairman and "a stakeholder". However James Bryce, a senior associate at Hammonds solicitors, who acted for Mandaric, said his client is selling out completely, not retaining any shareholding. Bryce would not, though, say whether the investors have yet paid Mandaric. "I cannot talk about my client's financial situation," he said.
The league's new rules require clubs to publish the names of all shareholders owning stakes of 10% or more, so at some point the new Walkers Stadium regime will have to be made clear.
Mandaric was reported to have received £47m when he sold Portsmouth to Gaydamak in two tranches in January and July 2006, and he stayed as Pompey's chairman too, before resigning three months later. He moved to buy Leicester in February 2007, committing to pay £600,000 for the shares, and to invest a further £9m in the club, which was then struggling in the Championship.
Clarke had been Leicester's chairman when the club went into administration following relegation from the Premier League in 2002, and was still a director when the club emerged from insolvency paying all creditors 10p in the pound, including HM Revenue and Customs, which was owed around £7m. He remained on the board until January 2007, when he resigned along with two other directors because, according to a club statement, they "felt unable to recommend" the Mandaric deal. The Football League is stressing that Clarke will not involve himself in the current process of ratifying Mandaric's sale.
When explaining his reasons for the deal, Mandaric has pointed to the millions Leicester have lost in the effort to remain competitive in the Championship. Like most clubs not gilded with parachute payments – which, following the 4 August agreement, have been hugely increased, with clubs relegated from the Premier League receiving £48m each over four years – Leicester have seriously overspent. In the year to 31 May 2008 the club lost £14m, having spent more than the club's entire income on wages alone, yet under Ian Holloway, who succeeded Gary Megson as manager in November 2007, were still relegated to League One. Promotion in 2009 was won under Nigel Pearson with the club again overstretching, making a £6m loss.
In January this year Mandaric was charged jointly with Harry Redknapp, formerly his manager at Portsmouth, with two counts of cheating the public revenue; the Crown Prosecution Service alleging that Mandaric paid Redknapp $295,000 "via a bank account in Monaco, evading the tax and national insurance contributions due."
Leicester's accounts for 2008-09, published on 14 May, stated that to cope with the losses, Mandaric's trust, which owns the club via a holding company registered in the low tax US state of Delaware, loaned City £6m, and that a further £4m of "new funding," most likely also loans, were supplied. In his chairman's statement, Mandaric said: "I am fully committed to standing by this club, whatever its financial needs."
Two weeks later, he was charged with a further count of cheating the public revenue, this time jointly with Peter Storrie, his former chief executive at Portsmouth. That relates to a payment allegedly made to terminate the midfielder Eyal Berkovic's contract at Pompey, without paying the tax due.
Mandaric has stated he is "astounded" at the charges, and denies any wrongdoing, as do Redknapp and Storrie. He told the Guardian that his decision to sell Leicester has "absolutely nothing to do with the HMRC investigations."
The acquisition of Leicester by Raksriaksorn and the other so-far unnamed consortium members is another example of a growing tendency among investors to look to Championship clubs, which they can buy more cheaply than Premier League clubs, then hope to fund to the £90m (at least) top-flight bonanza.
Leicester have some progress to make before they clamber back to the Premier League, and Greg Clarke, their former chairman, also has a way to go before his promised new dawn of transparency truly breaks over the Football League.
www.guardian.co.uk/sport/david-conn-inside-sport-blog/2010/aug/25/leicester-takeover-football-league-transparency
