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?