David Conn/The Guardian
Portsmouth's latest crisis prompts another fit-and-proper question
The latest ownership crisis at Fratton Park, six months after Vladimir Antonov took over, has left fans wondering why he was ever let through the front doorThe crisis at Portsmouth following the collapse into administration of the company which owns the club, Convers Sports Initiatives (CSI), and the arrest of its majority owner, Vladimir Antonov, for alleged large-scale bank fraud and forgery, is an odd mix of profound shock and weary familiarity. Fans who were promised last June that Antonov's takeover offered long‑term stability following the insolvency and wreckage of the previous two years are now asking why the Russian bank owner, who had a well-known chequered history, was ever allowed in at Fratton Park.
The intention is for Pompey to try to avoid administration this time, but in a statement the club said they only have funding "for the short term". The administrators of CSI which, with Antonov's money, owns nine sporting entities including Portsmouth, are Andrew Andronikou and Peter Kubik of the accountant Hacker Young, which handled Portsmouth's £120m administration last year. They confirmed their intention is to sell the club and other companies quickly. "We are very confident of finding interested buyers for these subsidiaries," Kubik said.
The Football League said its board will consider whether the club should receive the automatic 10‑point penalty for insolvency "as and when all the facts surrounding the administration of the club's parent company become available".
This meltdown at Fratton Park, less than six months since CSI, 80% owned by Antonov, bought the club, was described as "incredibly disappointing" by Pompey's chief executive, David Lampitt, who was previously head of regulation at the Football Association. The club and administrators will have to be careful to steer clear of the scandal enveloping Antonov, as the Lithuanian prosecutor-general is likely to seek to freeze and pursue his assets.
As recently as 10 November, CSI was proudly unveiling Michael Appleton as their new manager, hailing the former West Bromwich Albion coach as the man for their "five‑year plan to create an effective and stable structure for PFC". Just a week later the Lithuanian prosecutor-general announced it was investigating "alleged violations", including money-laundering, at the country's Snoras bank. Then, on 23 November, it issued a European arrest warrant against Antonov and Raimondas Baranauskas, respectively the major shareholder and chairman of the bank, saying the two "have been recognised as suspects with regard to misappropriation of property on a large scale and forgery of documents".
CSI issued a statement saying it was "business as usual" because its money had come from Antonov personally, not Snoras bank, but the reality rapidly became very different. Antonov was arrested in London and bailed following an appearance at Westminster magistrates court, and faces a hearing on 16 December to determine whether Lithuania's request to have him extradited will be granted. Both he and Baranauskas deny wrongdoing.
Chris Akers, the English former Leeds United chief executive, and Roman Dubov, a Hungarian former ice hockey player, Antonov's junior CSI partners, with decent CVs in sport, distanced themselves from Antonov, saying they had no association with his banking affairs. "I feel desperately let down, and have never been in a situation like this before," Akers said. "I will do the best I can to deal with it."
Akers confirmed that CSI, and Portsmouth, have been relying on millions of pounds from Antonov personally to fund the deal by which CSI bought the club. Creditors of the club's administration, who were owed up to £80m, including Her Majesty's Revenue and Customs, which claims a £37m debt, must still be paid 20p in the pound over five years. Akers said Antonov had invested around £10.5m in transfer fees and players' salaries. "It is no secret that the majority of Championship clubs are net-loss operations," he added. "It's an ongoing investment exercise."
Portsmouth's former owner, the Hong Kong-based businessman Balram Chainrai, who loaned £17m to the club in 2009, put it into administration, bought it back from the administrator then in June sold it to CSI, is understood to be owed instalments on repayments to him, due over two years.
He took out a mortgage over CSI's assets on 22 November, which makes him the favourite to take the club back over from the administrator. Chainrai is expected in England shortly to assess his position.
Pompey fell into administration in February 2010 after Sacha Gaydamak, who had funded huge losses for Harry Redknapp to take a star-stocked team to victory in the 2008 FA Cup final, pulled out. Chainrai eventually took over from two intervening owners, then sold to Antonov, who had been found by the banker and former Football League chairman Keith Harris. Yet Antonov, 36, who has worked in banking for 13 years, had a past which gave fans serious cause for unease.
In December 2007 the Financial Services Authority prohibited Snoras bank from opening a branch in Britain. "The FSA's case was that Bankas Snoras was likely to fail to deal with the FSA in an open and co-operative way," it said. In 2009, the European Investment Bank refused to lend money to Saab, the Swedish car company, if Antonov was involved in its ownership. "We made it clear we would help with finance provided the ownership structure did not include Mr Antonov," an EIB spokesman, Par Isaksson, said, although he would not give details about why Antonov was considered inappropriate.
Such official concerns about Antonov's activities have left fans sharply critical of the Football League's "owners and directors" test, which requires directors and 30% owners of clubs to certify themselves "fit and proper", most importantly that they have no convictions. Ashley Brown, chair of the Pompey Supporters Trust, explained: "There is general dismay that the club is being dragged through the dirt by another owner who was overseen by the Football League as 'fit and proper'. Their test is clearly inadequate."
The league argues it does not have resources to investigate potential buyers, nor to defend a more sophisticated ownership test. Greg Clarke, its chairman, is seeking prevention rather than cure, encouraging clubs to be responsibly run rather than looking for further scrutiny of owners. On Wednesday, at Coventry City, Clarke will seek Championship clubs' agreement to "financial fair-play proposals" understood to require them, in five years' time, to begin to limit themselves to £5m losses over the next three years.
By then the league hopes the Championship will become more stable than the loss-making dogfight it is today. The fate of Portsmouth, a club fighting for its life again, will unravel a lot sooner than that.
www.guardian.co.uk/football/david-conn-inside-sport-blog/2011/nov/29/portsmouth-crisis-vladimir-antonov
