There's been a lot to
take in over the last month from when Portpin asking for peace terms
the night before the court hearing and the agonising wait for terms
to be agreed and accepted by Mr Justice Peter Smith in courtroom 30
of the Rolls Building. The scramble to get the paperwork completed in
order was achieved ahead of a celebratory and exuberant Fratton Park
crowd with Sheffield Utd playing the perfect party guests. Since
then, Guy Whittingham has been appointed permanent manager, players
have started to sign on for the League Two adventure, and new senior
off-field staff have arrived in the form of CEO Mark Catlin and
Engagement Manager Micah Hall. After five years of a spiralling drift
downwards, the club is taking the steps to rebuild its foundations
for a better future.
And yet this feel-good
moment might not have occurred had Portpin restructured a couple of
financial arrangements more carefully to legitimise their usage and
therefore secured a third period of ownership. Thankfully despite the
restrictions placed on Portsmouth Football Club 2010 Ltd by the
Football League, old habits were difficult to contain during their
tenure between October 2010 and June 2011. That period left a number
of questions that Portpin were unwilling to answer in order to
satisfy that they were "fit and proper" enough to pass the
Owners & Directors Test of the Football League.
You might think that
the behaviour that saw Pompey become the only Premier League side to
enter administration would have been enough to disqualify the members
of Portpin from taking ownership of a football club previously. Yet
it didn't and Portpin took control in October 2010 setting an
important precedent.
The rules of the
Football League regarding ownership allows for a second chance for
owners even if you had put a club in administration before. Whatever
their misgivings, the Football League were rule-bound to give the
members of Portpin a second opportunity of ownership of Portsmouth
Football Club in 2010. The consequence of this was that had that
period between October 2010 and June 2011 been unremarkable in terms
of its governance then an application for a third period of ownership
would have likely been approved.
As leopards cannot
change their spots so Portpin couldn't change their behaviour from
their first to their second period of ownership. Not only did they
leave behind the equivalent of a burglar’s calling card for CSI to
clean up in terms of unpaid debts owed but they enacted two specific
financial manoeuvres which questioned their consideration as being
"fit and proper". These were the transfer of the debentures
on Portsmouth City Football Club Ltd to the newco Portsmouth Football
Club 2010 Ltd and the Hiroshima Ltd season ticket arrangement which
saw £800,000 of PFC income diverted to a Hong Kong black box.
The illegitimacies of
the debentures transfer and the season ticket monies have been
discussed here and here. These actions were
fundamental to demonstrating Portpin's inability to pass the Owners
and Directors Test. Yet had Portpin been a little bit cleverer and
less short-term in their thinking then they could still be in control
of Portsmouth Football Club today.
The first area where
they could have been cleverer was with the debentures. No doubt there
was strategic reasoning for them to accept the transferring of them
by Andrew Andronikou to their newco company in January 2011. Yet with
their negotiations with CSI, they could have quietly retired the
transferred debentures and created a new and legitimate debenture for
£17m over PFC and its assets as part of the sale agreement. Such an
arrangement would have given Portpin a stronger negotiating position
in dealing with the Football League and the administrators BDO as it
would have allow them to show clean hands.
The second area is to
do with the Hiroshima season ticket deal. Essentially the reason why
the Hiroshima deal was shown to be problematic was that there weren't
any goods or services that Hiroshima Ltd had provided Portsmouth
Football Club 2010 Ltd. In their haste to put one over on CSI,
Portpin had failed to provide a reasonable-looking debt to cross-knit
with the financial arrangement agreed between themselves, Hiroshima
Ltd (owned by Balram Chainrai) and Zebra Finance. This I suggest
illustrates that Portpin were not thinking of a third ownership when
they sold to CSI. Had they thought about covering their actions with
a cloak of legitimacy then it would have been possible to muddy the
waters sufficiently to justify the transaction though a paper
exercise.
In both case with the
debentures and the Hiroshima deal, Portpin had the opportunity to
restructure these financial arrangements to 'legitimise' their
existence. By not sufficiently covering their tracks gave the opportunity for the
Pompey Bloggers Collective to identify the illegitimate practises
which resulted in the articles written by Micah Hall and Dodgy Curry
linked above. Those articles, amongst other submissions, formed the
basis for some of the unanswered questions that the Football League
put to Portpin surrounding their ownership of Portsmouth Football
Club 2010 Ltd.
In the cold light of
day, short-term and insufficient thinking during their period of
ownership between October 2010 and June 2011 undermined Portpin's
position in their attempt to regain control of Portsmouth Football
Club for a third time. In their quieter reflective moments, I hope
they understand that was their actions and inactions that cost them
control. Not the administrators BDO or the PST or the bloggers or
that Keith Harris couldn't substantiate a meaningful bid. They brought
it upon themselves. Both the debentures and the Hiroshima issues
could have been nullified making it exceedingly difficult for the
Football League to refuse their application on the Owners and
Directors Test.
I suspect it grates
considerably.
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