I am a football fan. I know some don't understand the game. But for me it's a part of life. As is Ipswich Town FC. I spent part of my youth on the terraces at Portman Road and have never got over it.
As such the fact that Leeds United FC are in trouble is, by itself, not of much concern to me. Like most football fans I don't have a great love for Leeds. Sorry, but they just don't deserve it.
That said, nor do they deserve the treatment they have got from KPMG. Let me summarise this. Leeds went bust at the end of last season. For a day or so. To approve the sale of the club to new owners (who look remarkably similar to the old ones) 75% of the creditors had to agree. The majority of the creditors were offshore companies, the identities of which aren't known expect, apparently to Ken Bates (and his lawyer) who claims though that he has no interest in them. They voted for the sale to a new company directed by Ken Bates even though other deals on the table would have paid those companies (and the other creditors) much more than the deal they went for.
Now do you smell something fishy in that? I thought you might.
Dear old KPMG though bought it hook, line and sinker. Their role was key. As insolvency administrators they had to agree that the creditors were unconnected to allow the resolution to pass. As the Guardian has reported:
Mark Taylor, a director of Leeds who is Bates's solicitor, told the meeting that Astor and Forward [the two offshore companies owed money as creditors] had been connected in June last year but that he had ensured they were disconnected last December. The administrator said he had been assured in writing by Astor, and in sworn declarations from Bates and Taylor, that the offshore entities were not connected.
Several creditors have since said they are unhappy that no detailed explanation was given of the relationship between the offshore entities, and how any connection was severed. Willis's motion calls on KPMG to "explain why it failed to ascertain the beneficiaries of Astor Investments Holding [sic] . . . and Krato Trust . . . who agreed to write off £13m and £2.4m debts, and to seek explanations."
KPMG said in response that because Astor and Krato were owned overseas "it was not for us to discover any more about their ownership than Mark Taylor and Ken Bates assuring us that they were not connected parties".
I can think of quite a lot of words I could use to describe KPMG's performance, but there are better things to be sued about. So I'll settle for gullible incompetence.
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We have something else in common, Richard. I have supported Ipswich Town since 1966, and was a season ticket holder form 1968 to 1975 – happy days!
[…] KPMG are in a spot of bother again. As has been mentioned here before, they proved compliantly gullible when appointed as administrators of Leeds United, put into liquidation at the behest of its chairman, Ken Bates and with the apparent willing cooperation of its mysterious offshore creditors, only for Bates to buy it straight back with the support of those self same creditors. […]
“KPMG said in response that because Astor and Krato were owned overseas “it was not for us to discover any more about their ownership than Mark Taylor and Ken Bates assuring us that they were not connected parties”.”
So to get to the nub of it – is this statement actually correct?
At least under their current management there is little chance that Leeds United will bounce back, even if they do survive this debacle!
As a Birmingham City fan I too have little sympathy for Leeds, and I still chuckle about the comments Brian Clough made during his short stint in charge at Leeds!
Whilst appreciating that my club’s plight carries little sympathy amongst other fans – I would like to ask them to consider how they would feel should it happen to their club.
I can assure that after 60 years of going to Elland Road these past 4 or 5 years have been sheer hell and the past 12 months absolute pergutory
John
Maybe
But you’re still Leeds United. What do you expect? 🙂
Richard
What do I expect?
Well I expected a more professional approach from KPMG for starters.
Instead we have witnesed a baffling and bewildering process that has seen the fans become CVA experts following a crash course in Insolvency Law and finally seen a supposedly respected international firm of accountants virtually wash their hands of the club as they appear to have filed it under the ‘too difficult’ pile and walked away.
As to what I expected from other clubs fans I expected exactly what is happening and I can live with it but perhaps they should try and imagine the consequences of it happneing to them.
Ken Bates will not be bothered who he buys next after he has spat out what is left of LUFC.
John
Sorry – I was teasing, a bit. It’s easy to do it to Leeds fans and not fair.
I really do agree with all you say
Richard
Tax Research LLP – given your background and experience what do you see happening over the next few months to the club.
Presumably the FA will give the permission to play in league 1 but do you see a legal challenge mounted that could see the club crumble. Or Bates sells up for a few million profit and we get someone like Redbus, Pearson or Morris. Indeed is the ultimate goal of any of these parties the real estate which will be quickly sold and LUFC relocates to a 20k stadium elsewhere.
Chris
My guess is no better informed than yours I expect.
I have a supiscion though that the League will not allow Bates to macrh on. The taint of scandal is too strong for them on this occassion. But this would leave KPMG in an invidious position and I suspect they will then resign.
What then? Either the official receiver or another firm takes over to find a buyer. The chances of Leeds survuving are at the point dependent upon who owns the ground and what other uses their might be for it. If it could be developed, watch out. It thew council make clear they will not allow that then I think there’s a good chance the new receive will allow a sale at a low price to someone who can show he can pay a team to play for Dennis Wise.
Do I think this will be resoved soon? No, is the honest answer. And if the outcome was a chance for a football trust / local council combination to promote footbal locally (even if it will never again achieve Premier League status) then I suspect I won’t be the only perosn who will be pleased.
And candidly, the premier League is not (as some of us know) all it is carcked up to be. I have quite a liking for the Conference if I’m honest – because somehow that’s what I think football should be.
But maybe I’m just nostalgic for those days when one could stand.
Richard
Did you know Leeds City Council supported the 1p in £ and voted by proxy. Their votes helped the CVA take effect.
Curious
Do you know why?
Richard
As far as is known LCC voted for the Bates proposal as they, like many of the Leeds supporters who were creditors, fell for the widely reported and widely believed story put out by our Chairman that unless the CVA was accepted the club would “go the way of Accrington Stanley”.
It is largely seen by supporters that the LCC vote was an attempt by them to keep the club viable.
They were duped but then so were many of the other creditors as well
There was a post on one of the Leeds websites (a more reputable one may I add) where this chaps friend alledges he had been owed some £8k by LUFC and had been approached directly just before the vote by a member of LUFC saying if he voted with them he would get the full amount back.
Apparently subsequent to that LUFC approached for another order totalling £2k but when aksed where the £8k was, was told you don’t give us the £2k order and you will never see it.
Makes you wonder what is going on
There’s a great piece on this on the Guardian website, bringing more information on the offshore funds involved and posing 20 questions that need to be answered; a good many of them for KPMG:
http://blogs.guardian.co.uk/sport/2007/07/27/leeds_united_the_unanswered_qu.html
As I lifelong Bradford fan I actually feel sorry for Leeds, unlike some others. Having been through the same situation I can only imagine what the fans are going through. At the end of the day, it affects the fans more than anyone else. We are the ones who pay, sometimes through the nose, week in, week out to follow our teams. All the money we sepnd gets misappropriated by our Chairmen and Directors. All that Ken Bates is doing is asset stripping, pure and simple. He cares nothing for Leeds and has nothing but contempt for his fans. If you look at him he was a record of dodgy deals everywhere he has gone. I hope that this will soonebe over, Bates will have gone back to the hole he crawled out of and hoest Leeds fans can go about the painful process of rebuilding the club. Mind you, it will take time.
Mike
You’re right. Football is exploitation now. Why is anyone worth £135,000 to kick a ball.
I seriously wonder about moving my alleginace to the Conference – real football in enjoyable grounds played by people who want to
Richard