Leeds, KPMG and offshore – are you surprised HMRC has objected?

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The saga of Leeds United's insolvency, its management by KPMG and the undisclosed links between the club and two offshore companies continues. As the Guardian has reported:

Ken Bates' hopes of securing the Football League share for his new company Leeds United 2007 appeared more distant yesterday after the league and HM Revenue and Customs declared their opposition to his most recent takeover of the club.

Customs & Revenue had already challenged through the high court the result of a previous sales process arranged by the administrator, KPMG, that saw the consortium led by the former Chelsea chairman win control of Leeds.

I'm pleased to note that Dave Hartnett, HMRC director general has said:

We are not prepared to enter into any arrangement that lacks complete transparency about the identity of creditors and the terms of any deal being reached. HMRC believes it is vital that all creditors are treated fairly. HMRC is determined to achieve a full and fair settlement for the taxpayer.

As a result HMRC are rightly still questioning why Astor Investment Holdings, one of the offshore companies that insists it had no existing formal connections to Ken Bates, Leeds owner before and after the insolvency (with more than a little help from KPMG on the way), withdrew its claim for £17.6m owed to it by Leeds so that his second go at buying the company out of KPMG's administration could proceed.

KPMG said it was satisfied by Astor's solicitor, Mark Taylor - himself a director of Leeds United 2007 - that no connections existed. But the very fact that Astor's solicitor is a director of Leeds United 2007 gives lie to that claim.

Bates shows himself a person unsuitable to run a football club as a result of this fiasco.

KPMG show themselves in their true light as purveyors of financial skulduggery to the highest bidder with no real questions asked.

HMRC are doing the right thing. So too, it seems are the League.

And Leeds fans suffer.

But let's be clear why: at the heart of this is the financial impropriety that offshore allows. Secrecy destroys trust and trust destroys business. If Leeds fails that is the message that should be learned by the British public.

I have argued for some time that offshore has the capacity to destroy markets and democracies by the destruction of trust and the denial of funds to elected governments. Leeds may be a microcosm of both, but it proves the potential. The need to close down the offshore threat to our well being is obvious. So when will the government act?