Portsmouth Finances/Owners Update

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Portsmouth Finances/Owners Update Dec 31, 2009 7:32:57 GMT

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Post by QPR Report on Dec 31, 2009 7:32:57 GMT

Guardian/Jamie Jackson

Sacha Gaydamak casts doubt over Portsmouth owners• Former owner demands money owed by current regime
• Portsmouth will contest terms of HMRC winding-up order

Sacha Gaydamak, the former owner of Portsmouth who says he is owed at least £28m by the club, has demanded that the current proprietor, Ali al-Faraj, tell him when he will be paid and has cast doubt over who is in control at Fratton Park.

Speaking to the Guardian last night the Franco-Russian businessman revealed he feels "frustrated" at the confusion on the south coast, and that he wishes to know the identity of the "ultimate beneficial owner" as he is finding it difficult to engage in dialogue with the correct parties in regard to recouping his money.

Gaydamak's decision to speak out for the first time came after the news that Portsmouth were served a winding up petition by HM Revenue & Customs on 23 December. While the club issued a statement disputing whether any order had been "formally served", HMRC confirmed that it had indeed delivered the petition. The court hearing is not expected until early February, giving the club breathing space to pay the estimated debt, which stands at around £10m, and if not paid could force Portsmouth into administration.

Regarding Portsmouth's chaotic state, which includes players failing to be paid twice this season, an ever-rising debt which stands at around £60m, plus on-field fortunes which have Avram Grant's team rooted to the bottom of the league, Gaydamak said: "I join in the frustration of the supporters, and I would like to know who the ultimate beneficial owner is, what plans they have for the future, and if I am to be paid."

Gaydamak claims the debt is due in two tranches, with the first instalment of £9m due to be paid at the end of next month. A further £19m is due in May 2012, while it is unclear when the disputed amount of £2.5m will be paid.

Gaydamak's confusion over the identity of the club's actual beneficial owner is reflected by Portsmouth fans and the Premier League. The governing body is closely monitoring the situation, and also placed a player registration embargo on the club more than two months ago for debts owed to other English clubs.

When Faraj purchased Portsmouth from Sulaiman al-Fahim the latter never actually met the Saudi businessman. He has also yet to visit the club and is represented by Mark Jacob, his solicitor and Portsmouth's executive director.

Faraj appears to have several advisers, many of whom are Israeli. Roni Mana, an Israeli property developer, and his countryman Yusef Yurum, a practising solicitor, are thought to be advisers, while Faraj's brother, Ahmed, who is London-based and has attended games, is a property developer. It is said the Faraj brothers and the group became involved with Portsmouth due to an interest in redeveloping Fratton Park.

The statement from the club regarding the HMRC petition read: "Portsmouth FC has not been formally served with a winding-up petition and is shocked and surprised this action has been taken in respect of VAT, PAYE and National Insurance contributions which either have been or are about to be paid, or are disputed.

"The club is disputing the VAT amount outstanding and has formally notified HMRC of this. We expect HMRC to withdraw their demands forthwith. Otherwise we anticipate a hearing in January 2010 during which we will request that the high court order HMRC to withdraw their demands.

"Since the takeover by Ali al-Faraj in October 2009 extreme efforts have been made to reach payment arrangements with HMRC to allow the owner time to deal with inherited debt. To date the new owner has injected a total of £9.7m new funds to HMRC – £5.7m paid and security to the value of £4m."

A Portsmouth spokesman said last night he had no comment to make over Gaydamak's assertions.

www.guardian.co.uk/football/2009/dec/31/portsmouth-sacha-gaydamak-winding-up-order

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Portsmouth Finances/Owners Update Dec 31, 2009 7:33:34 GMT

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Post by QPR Report on Dec 31, 2009 7:33:34 GMT

Guardian/Jamie Jackson

Previous Blog home Off-field shenanigans highlight the turmoil engulfing PortsmouthThe financial disarray at Portsmouth is making relegation all the more likely for Avram Grant's team

On the day when it emerged that Her Majesty's Revenue and Customs had issued a winding-up petition against Portsmouth ahead of Christmas, before Sacha Gaydamak challenged the owner Ali al-Faraj – through this newspaper – to please let him know if he would be paid the millions the ex-proprietor says are his due, the beleaguered chief executive, Peter Storrie, offered the following insight into the Fratton Park shenanigans.

"Off the field the financial issues of the club have been prominent in the media once again," Storrie wrote in the Portsmouth programme for the visit of Arsenal, who would enjoy a routine 4-1 victory.

"While we would prefer to keep this in-house and deal with the situation, third parties are ensuring that certain issues are played out in public. The majority of the reports are ill-informed but such is the nature of finance that we are not at liberty to set the record straight all of the time."

Leaving aside any quibbles over whether he has ever briefed a journalist or two himself, Storrie had unwittingly aligned himself with many Pompey fans who are disgruntled, at best, that since Faraj bought the club from Sulaiman al-Fahim in October there has been a searing lack of clear, precise information emanating from the new regime.

Storrie, whatever may be said about his business acumen, is credited by supporters for at least engaging in dialogue with them on a regular basis.

But Colin Farmery, of the Pompey Virtual Alliance, a coalition of various supporters' groups, voiced a prevailing criticism when he said before kick-off: "The fact the new owners of the club have not been forthcoming with any information at all about their plans has allowed conspiracy theories to flourish and it is largely their own fault they have failed to get the confidence of many fans. That has to change. This winding up order will hopefully bring all concerned to their senses and it is time to try to find some common ground."

While this echoed Gaydamak's plea to be told who the ultimate beneficial owner is, lifelong fan Scott McLachlan agreed with Farmery. He said: "It seems to me that there are competing factions and the time has come for the owner, whoever it is, to put substantial funds into the club.

"Every fan I know is scared the club will fold in days if not in weeks. We seem to lurch from crisis to crisis. We just want to ensure we have a football club to support at the end of all this. The club is more than any player, owner, or board member, it is the fans and history that will always be the club."

Recent history has included the three owners in two months, a player registration embargo, and a rising debt that stands at around £60m. In answer to Farmery's assertion that the absentee Faraj – he has never visited the club, no supporter could identify him in the street – plus his ever-mushrooming group of advisors is making the picture on the south coast ever grainier here is Storrie again: "It has been a very difficult year but one thing you must believe is that Ali al-Faraj and his associates are doing their very best to refinance the club so we can once again operate the business as we all want to."

Avram Grant, whose threadbare resources are now further drained by the departure of Nwankwo Kanu, Hassan Yebda, Nadir Belhadj (who were all in tonight's 22) and Aruna Dindane for the African Cup of Nations, is said to be concerned that the off-field turmoil is affecting the form of his players, which is hardly surprising.

While morale is still high among his squad tomorrow they wake, alongside Grant and the staff, to see if their wages have been paid, following the two previous occasions the club had failed to do so.

Grant, the players and fans want to concentrate only on the football, of course. But if the embargo is not lifted and the manager cannot finagle a few shrewd free transfers and loans then relegation for the league's bottom-placed club is an almost certainty.

Supporters are now facing up to this, and patience is wearing thin from what is among the very best of football crowds.

During the second half the crowd sang "You can stick your Arabs up your arse" and later: "Sack the board."

Faraj and his cohorts, wherever they were last night, will not have wanted to hear that.

www.guardian.co.uk/football/blog/2009/dec/30/portsmouth-peter-storrie-finance

Gianni Paladini to QPR Report: "I would like to thank you for all your time and efforts that you put into QPR. I think you are doing something useful and informative for the club and the supporters."

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Portsmouth Finances/Owners Update Dec 31, 2009 7:42:03 GMT

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Post by QPR Report on Dec 31, 2009 7:42:03 GMT

The Times

December 31, 2009

Clubs paying heavy price for UK’s cash crisis
Revenue & Customs has issued as many as five other winding-up petitions against football clubs over the past two months
Helen Power, Business analysis

Britain’s cash-strapped Government is clamping down on struggling football clubs by threatening to make them bankrupt for non-payment of tax.

The Times has established that Revenue & Customs has issued as many as five other winding-up petitions against football clubs over the past two months.

City insiders say that Portsmouth are one of several clubs facing the threat of bankruptcy, and with it, in their case, a nine-point deduction.

Revenue filed a court application for a compulsory winding-up order against Portsmouth on December 23 and a full hearing of the case is scheduled for February. The club said yesterday that they have paid £5.7 million of overdue taxes to Revenue since Ali al-Faraj, their new owner, took over in October. Portsmouth added that they are only two months in arrears and are disputing the amount of VAT owed.

However, it is understood that they owe several millions of pounds in VAT, staff PAYE contributions and National Insurance.

Football has been hit by a double whammy of its mismanagement and the Government’s needs to raise cash as corporate tax revenues fall. Many clubs took on too much debt when it was easy to borrow from banks and are struggling to pay lenders and the taxman. Casualties of over-borrowing this year included Southampton, who went into administration, and Watford, who narrowly escaped bankruptcy.

Simultaneously the Government is facing ballooning national debt. This month the Tories accused the Prime Minister of “maxing out the nation’s credit card” after official figures showed that Britain’s national debt hit a record high of £20 billion in November. The figures equate to almost £1,000 for every family, every month.

It is believed that the timing of Revenue’s petition against Portsmouth is tactical. The club’s only liquid assets are their players and the court application could be designed to apply pressure to sell when the transfer window opens tomorrow. Cash from player sales, including the £10 million transfer of Peter Crouch to Tottenham Hotspur in August, has previously been used to pay the club’s debts to Revenue. If Portsmouth could pay all or part of their debt from player sales before the court case in February, Revenue would almost certainly drop its claim.

Revenue declined to comment yesterday on its reasons for the application, citing taxpayer confidentiality. But winding-up petitions against other clubs could have been timed for similar reasons.

Portsmouth are understood to be lodging a claim with the High Court to challenge Revenue’s VAT bill and expect the case to be heard next month. If bankruptcy still looms by the end of the month, they will probably appoint their own administrator rather than leave the courts to decide their fate.

www.timesonline.co.uk/tol/sport/football/premier_league/portsmouth/article6972111.ece

Gianni Paladini to QPR Report: "I would like to thank you for all your time and efforts that you put into QPR. I think you are doing something useful and informative for the club and the supporters."

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Portsmouth Finances/Owners Update Jan 1, 2010 7:42:54 GMT

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Post by QPR Report on Jan 1, 2010 7:42:54 GMT

Guardian

PFA chief to meet Portsmouth hierachy over non-payment of players' wages• Cusack to meet officials on Monday, players on Tuesday
• Finnan says 'no one seems to know what's going on'

Jamie Jackson guardian.co.uk, Thursday 31 December 2009

The chief executive of the Professional Footballers' Association, Nick Cusack, will meet Portsmouth officials on Monday for talks about the state of the club's finances, after yesterday's disclosure that players' wages had not been paid on time for a third month this season. Portsmouth said that they expected the squad to be paid on Tuesday.

A statement released by the club read: "The club has been assured of receipt of funds by Tuesday and the owner and Board have been working hard on resolving the short term delay."

Portsmouth's owner, the Saudi Arabian businessman Ali al-Faraj, has never visited the club. It is expected that Cusack will meet with Mark Jacob, Faraj's lawyer, who sits on the board as executive director. Cusack hopes to agree a medium-term strategy to stop Portsmouth's players going unpaid again this season. The PFA does not wish to further destabilise Avram Grant's squad. Portsmouth are bottom of the Premier League.

On Wednesday it emerged that Portsmouth had been served with a winding up petition from HM Revenue & Customs on 23 December. That development followed the imposition of a Premier League transfer embargo in mid-October.

The Republic of Ireland defender Steve Finnan, who is one of the club's senior professionals, last night became the first member of the squad to admit that the uncertainty over Portsmouth's financial future is affecting the players.

"You try and do your job as best you can," he said. "There is obviously talk, the players obviously talk about what is going on, about getting paid. Everyone is in the same position. The lads have tried their best. But as players we have to get on with our job for the club and hopefully things can resolve themselves.

"But I think no one really seems to know what is going on. It worries us, its not nice for the fans, they have obviously been supporting the club for a long time. It's just not fair on them."

Cusack has arranged a meeting with Finnan and his colleagues on Tuesday, at which he will discuss his meeting with the club's executive the previous day. The PFA will also meet with the Premier League to try to find common ground on the issue. Cusack hopes the players' union and the governing body will be able to hold a joint meeting with the club.

If the Portsmouth players' salaries have not been paid by Tuesday, Cusack will expect the Premier League to exert extra pressure on the club's hierarchy, beyond the watching brief it has so far kept on a club whose debts of at least £60m are threatening to take it into administration.

Sources at the Premier League say it may decide to withhold a further instalment of television money which is due to Portsmouth at the end of this season. The governing body has already reserved the right to do so regarding next month's payment. That money will go towards paying other English clubs what Portsmouth owe them for previous transfers.

If the players' salaries fail to arrive on Tuesday then the squad will have the option of serving a mandatory 14 days notice to terminate their contracts. For now, there is no suggestion that they are seriously considering this.

www.guardian.co.uk/football/2009/dec/31/portsmouth-pfa-players-wages-faraj

Gianni Paladini to QPR Report: "I would like to thank you for all your time and efforts that you put into QPR. I think you are doing something useful and informative for the club and the supporters."