Post by QPR Report on Nov 27, 2009 3:44:03 GMT
Guardian
League renews inquiries into Notts County• Mawhinney says further questions have been asked
• Complex and confusing structure around club
Matt Scott \
The Football League has renewed its inquiries into Notts County's ownership. Lord Mawhinney, the Football League chairman, confirmed to the Guardian yesterday that the Meadow Lane club has been sent a series of questions relating to its ownership structure.
The Football League had declared last month that the club had passed the fit and proper persons tests after it had been assured that the controversial businessman Russell King was not involved with County.
Guardian investigations into the companies that own County have revealed that they are part of a complex and confusing structure with many connections between individuals associated with the project.
Separately, doubts have also emerged about the terms of the £5m guarantee of funds that Munto Finance produced that persuaded the Notts County supporters trust to sign over control of the club for a nominal consideration of £1. That guarantee, produced in May of this year, came from a company belonging to First London, a financial services firm.
The letter of guarantee is drafted in an unconventional fashion and may not easily be enforceable. An expert in contract law has raised doubts about the document. A corporate law partner at Olswang said: "The letter of guarantee is quite imprecise and confusing. It refers to the guarantee being able to be invoked if Munto does not make "investments" in Blenheim 1862 [the club's holding company that was majority owned by the supporters' trust] but it does not define when and how such investments must be made.
"In addition the breadth of the wording regarding 'settlement means' would imply that Blenheim 1862 would have to seek final legal judgement against Munto before it could secure funds from First London. This is unusual.
"Also the Guarantee is addressed to Blenheim 1862 and not to the shareholders of Blenheim 1862. There is no third party rights provision that would enable the shareholders of Blenheim 1862 to enforce the terms of the Guarantee."
First London did not comment on those terms but said it is unlikely to be required to pay out, saying that Munto Finance has sufficient funds to meet its obligations. It stressed the guarantee is "not in any event triggered [without] a final Court Order on the relevant debt."
The First London balance sheet showed assets of £180m as at 31 March, but the latest accounts filed by the company also reveal that at that point First London held just £18,657 in cash and had only £1.3m available to it in undrawn borrowings. It is unclear what First London's equity assets include, but it enjoyed an impressive year to 31 March (see page 3).
First London says that the letter of guarantee to Blenheim 1862 was actually made by a Bahrain-domiciled subsidiary. This is not clear from the letter, however, which has a First London letterhead, its London address and is signed by a director of the UK company. As at 31 March, the only Bahrain-domiciled subsidiary of First London was recorded as dormant.
In addition, Guardian investigations have revealed that there are individuals linked with both First London and Swiss Commodity Holding, the company in which the Notts County director of football, Sven-Goran Eriksson, believes he was promised shares as part of his inducement to join the club, and whose logo is at the heart of the new Notts County club badge.
Representatives of Swiss Commodity Holding, including Russell King, were recently pictured meeting Kim Yong-nam, effectively North Korea's head of state, in Pyongyang.
First London and Swiss Commodity Holding share a director, Nigel Little. Kevin Leech, a former Jersey bankrupt, is another director of SCH. In First London's annual return in June this year it was revealed that 11% of First London is owned through a trust called Condor Ventures, whose owner was recorded as Leech in a separate filing that month.
On 16 October First London sold its asset management division to Swiss Commodity for £173m.
Last year First London issued new shares to take over Bahrain Capital, a company which had connections to Russell King. Subsequent to that deal a company called Mirison Invest & Finance assumed a 44.3% share in First London. It is ultimately controlled by an entity called Amorgos Trust.
A spokesman for First London said: "Russell King and Nathan Willett have no shareholding interest, whether directly or indirectly, in First London."
The signature on the First London letter of guarantee to Blenheim 1862, which was then controlled by the supporters' trust, belonged to Per Brandtzag, a Swedish national, who has only been a director of First London since March. He is resident in Bahrain and is an acquaintance of King and Nathan Willett.
Willett's father, Peter, is a board member at Meadow Lane, while Nathan Willett signed the deed of gift on behalf of Munto when it acquired the supporters' trust shares on 31 May.
The Football League had become concerned about the involvement of King in Notts County after it was revealed that he was involved in a fraud investigation in Jersey. A former employee had also blamed him for the loss of a six-figure sum that he maintains King persuaded him to invest in Belgravia, a Jersey based investment house now in liquidation. King denied the allegation
The league only cleared the County takeover after the club assured it that King's role had simply been that of an adviser and that he had severed all ties. Until Nathan Willett stepped down to be replaced by the new board, including Kevin Leech, earlier this month he and his father had been the sole directors of Swiss Commodity.
The Guardian's revelation that King had represented SCH (whose logo lies at the heart of County's new club badge) on a trip to Pyongyang reawoke the league's interest according to a source familiar with the inquiry. It has also been provided with fresh financial information that indicates that King ordered a batch of British Virgin Islands shell companies last year. These included Munto and Qadbak, two offshore vehicles in the Notts County ownership chain (see graphic, left). A spokeswoman for Qadbak said King "has no involvement" with it or its subsidiary, Munto Finance.
The Guardian has made available to the Football League board documents relating to the companies' financial affairs. Mawhinney has made clear that the league does not investigate clubs but does from time to time raise questions to which it requires answers, but said these must always remain a matter between the league and the club.
In separate developments it has emerged that Notts County has had three separate county court judgments against it lodged since July. The first is for £2,288, another for £5,442 and the most recent for only £846.
The Meadow Lane board had also received a winding-up order from HM Revenue & Customs demanding a six-figure sum in unpaid tax from its UK parent company, Blenheim 1862. The papers were served in the bankruptcy division of the high court in September but the matter was resolved five working days before it was due to be heard.
www.guardian.co.uk/football/2009/nov/27/notts-county-ownership
League renews inquiries into Notts County• Mawhinney says further questions have been asked
• Complex and confusing structure around club
Matt Scott \
The Football League has renewed its inquiries into Notts County's ownership. Lord Mawhinney, the Football League chairman, confirmed to the Guardian yesterday that the Meadow Lane club has been sent a series of questions relating to its ownership structure.
The Football League had declared last month that the club had passed the fit and proper persons tests after it had been assured that the controversial businessman Russell King was not involved with County.
Guardian investigations into the companies that own County have revealed that they are part of a complex and confusing structure with many connections between individuals associated with the project.
Separately, doubts have also emerged about the terms of the £5m guarantee of funds that Munto Finance produced that persuaded the Notts County supporters trust to sign over control of the club for a nominal consideration of £1. That guarantee, produced in May of this year, came from a company belonging to First London, a financial services firm.
The letter of guarantee is drafted in an unconventional fashion and may not easily be enforceable. An expert in contract law has raised doubts about the document. A corporate law partner at Olswang said: "The letter of guarantee is quite imprecise and confusing. It refers to the guarantee being able to be invoked if Munto does not make "investments" in Blenheim 1862 [the club's holding company that was majority owned by the supporters' trust] but it does not define when and how such investments must be made.
"In addition the breadth of the wording regarding 'settlement means' would imply that Blenheim 1862 would have to seek final legal judgement against Munto before it could secure funds from First London. This is unusual.
"Also the Guarantee is addressed to Blenheim 1862 and not to the shareholders of Blenheim 1862. There is no third party rights provision that would enable the shareholders of Blenheim 1862 to enforce the terms of the Guarantee."
First London did not comment on those terms but said it is unlikely to be required to pay out, saying that Munto Finance has sufficient funds to meet its obligations. It stressed the guarantee is "not in any event triggered [without] a final Court Order on the relevant debt."
The First London balance sheet showed assets of £180m as at 31 March, but the latest accounts filed by the company also reveal that at that point First London held just £18,657 in cash and had only £1.3m available to it in undrawn borrowings. It is unclear what First London's equity assets include, but it enjoyed an impressive year to 31 March (see page 3).
First London says that the letter of guarantee to Blenheim 1862 was actually made by a Bahrain-domiciled subsidiary. This is not clear from the letter, however, which has a First London letterhead, its London address and is signed by a director of the UK company. As at 31 March, the only Bahrain-domiciled subsidiary of First London was recorded as dormant.
In addition, Guardian investigations have revealed that there are individuals linked with both First London and Swiss Commodity Holding, the company in which the Notts County director of football, Sven-Goran Eriksson, believes he was promised shares as part of his inducement to join the club, and whose logo is at the heart of the new Notts County club badge.
Representatives of Swiss Commodity Holding, including Russell King, were recently pictured meeting Kim Yong-nam, effectively North Korea's head of state, in Pyongyang.
First London and Swiss Commodity Holding share a director, Nigel Little. Kevin Leech, a former Jersey bankrupt, is another director of SCH. In First London's annual return in June this year it was revealed that 11% of First London is owned through a trust called Condor Ventures, whose owner was recorded as Leech in a separate filing that month.
On 16 October First London sold its asset management division to Swiss Commodity for £173m.
Last year First London issued new shares to take over Bahrain Capital, a company which had connections to Russell King. Subsequent to that deal a company called Mirison Invest & Finance assumed a 44.3% share in First London. It is ultimately controlled by an entity called Amorgos Trust.
A spokesman for First London said: "Russell King and Nathan Willett have no shareholding interest, whether directly or indirectly, in First London."
The signature on the First London letter of guarantee to Blenheim 1862, which was then controlled by the supporters' trust, belonged to Per Brandtzag, a Swedish national, who has only been a director of First London since March. He is resident in Bahrain and is an acquaintance of King and Nathan Willett.
Willett's father, Peter, is a board member at Meadow Lane, while Nathan Willett signed the deed of gift on behalf of Munto when it acquired the supporters' trust shares on 31 May.
The Football League had become concerned about the involvement of King in Notts County after it was revealed that he was involved in a fraud investigation in Jersey. A former employee had also blamed him for the loss of a six-figure sum that he maintains King persuaded him to invest in Belgravia, a Jersey based investment house now in liquidation. King denied the allegation
The league only cleared the County takeover after the club assured it that King's role had simply been that of an adviser and that he had severed all ties. Until Nathan Willett stepped down to be replaced by the new board, including Kevin Leech, earlier this month he and his father had been the sole directors of Swiss Commodity.
The Guardian's revelation that King had represented SCH (whose logo lies at the heart of County's new club badge) on a trip to Pyongyang reawoke the league's interest according to a source familiar with the inquiry. It has also been provided with fresh financial information that indicates that King ordered a batch of British Virgin Islands shell companies last year. These included Munto and Qadbak, two offshore vehicles in the Notts County ownership chain (see graphic, left). A spokeswoman for Qadbak said King "has no involvement" with it or its subsidiary, Munto Finance.
The Guardian has made available to the Football League board documents relating to the companies' financial affairs. Mawhinney has made clear that the league does not investigate clubs but does from time to time raise questions to which it requires answers, but said these must always remain a matter between the league and the club.
In separate developments it has emerged that Notts County has had three separate county court judgments against it lodged since July. The first is for £2,288, another for £5,442 and the most recent for only £846.
The Meadow Lane board had also received a winding-up order from HM Revenue & Customs demanding a six-figure sum in unpaid tax from its UK parent company, Blenheim 1862. The papers were served in the bankruptcy division of the high court in September but the matter was resolved five working days before it was due to be heard.
www.guardian.co.uk/football/2009/nov/27/notts-county-ownership