The fiasco of KPMG's management of the administration of Leeds United continues. As the Guardian reports:
Ken Bates was last night handed control of Leeds United by administrators for the second time but just how much he paid for the club will not be made public for several months.
After the administrator, KPMG, approved Bates's initial bid of 1p in the pound for the £35m in debts that had led to the club being placed in receivership - a settlement rejected by the Revenue commissioners - there was concern among creditors and other bidders about what the sale had generated this time around.
The insolvency market has always been pretty sordid. Just read what Prem Sikka has to say on the subject. This latest fiasco makes clear though that:
1) There was a pre-agreed course of action in this case. These should not be allowed;
2) KPMG failed miserably to exercise any reasonable standard of care in seeking to determine the ownership of two offshore companies that effectively controlled the administration. In the absence of proof they should have exercised caution. They did not. They were reckless;
3) In the event that ownership of an asset cannot be proven (and in this case the absence of evidence of control of the tow offshore companies constitute that lack of proof) then claims should be disenfranchised in insolvencies;
4) The failure to provide information and access to data in this case meant much of what KPMG did in "re-selling" the club appears to have been a charade;
5) KPMG's actions need to be investigated;
6) The Premier League and Football League need to make clear that offshore has no interest in the UK game. Problems with Leeds, Manchester City, Chelsea, Manchester United (with regard to current transfers), West Ham and elsewhere show that this is essential.
Many years ago I proposed at an AGM of Ipswich Town FC that a 'golden share' in the club should be issued to the Borough of Ipswich to prevent shareholder abuse. It remains my view that such protection is needed. But will the authorities take action to stop this abuse, or will the wall of illicit transactions and money that are swamping the game continue to be indicative of the corruption of financial life as a whole?
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Richard,
Apart from anything else, I don’t believe Ken Bates is good for football. Though I am a fan I don’t agree with everything that Manchester United does, but as far as I’m aware, it is an ‘innocent’ party in the transfer of Carlos Tevez. They are only trying to buy him. The fact that he’s owned, clearly against Premier League rules, by a corporate entity that is not a football club is something they’re not responsible for.
Richard,
Apart from anything else, I don’t believe Ken Bates is good for football. Though I am a fan I don’t agree with everything that Manchester United does, but as far as I’m aware, it is an ‘innocent’ party in the transfer of Carlos Tevez. They are only trying to buy him. The fact that he’s owned, clearly against Premier League rules, by a corporate entity that is not a football club is something they’re not responsible for.
The failure of KPMG to attend the Football League meeting where LUFC had made application for the transfer of the ‘golden share’ which would allow the club to commence full preparations for the new season is yet another example of the shameful way they have handled this Administration process.
By not attending – after previously requesting permision to do so – they have denied the FL the opportunity to ask the questions that so many of their supporters and the bemused usuccessfull bidders require answering.
One thing is for certain. The whole stinking mess is a great argument in favour of the Supporters’ Trust movement.
Ownership of clubs by properly regulated, well managed Trusts whose interests are those of the supporters of the club, and who are required to practice openness and accountability, has to be better than a system where millionaires play games with obscene sums of money routed through untraceable entities, with the connivance of well paid professionals, to the expense of everyone, apart from themselves, and the aforementioned professionals.
Gareth
I agree
My proposal to Ipswich Town was linked to one for a supporter’s trust
Richard
The only thing I now find fascinating about football (having long given up any allegiance to clubs whose only connection with their communities is physical location of the grounds) is how the fans who despise the rich chairmen are yet prepared to idolise the rich players.
And Richard, if you want to see tax avoidance red in tooth and claw, look no further than remuneration and commercial arrangements for Premiership players.
Roger
I did my best to get Arsenal contracts on the television a year or so back
But you know what BBC lawyers are like. We got neutered on the way
Richard
I too am an advocate of the Trust movement and a member and former Vice Chair of the Leeds Trust. Recent events have allowed our supporters for the first time to see how the Trust can truly represent them and we may actually gets some members out of the fiasco.