Sunday Times 29/7/07
Bates faces up to flower power
The latest financial shenanigans at Leeds United leave many more questions than answers
Ben Laurance, Sunday Times, 29/7/07
OUTSIDE Leeds United’s Elland Road ground flowers have been stacked around the statue of club legend Billy Bremner as supporters plead for an end to the three months of turmoil that have engulfed Yorkshire’s once-great footballing power-house. Fans have set up a “Love Leeds, Hate Bates” website appealing to tycoon Ken Bates to stand down as chairman of the club “and sell your controlling interest immediately to a party with Leeds United and football at its heart”. And now Bates’s key business partner finds himself embroiled in a bizarre legal episode. It stems from Bates’s successful move to buy the club back from administrators after it went bust. But this dispute is being played out not in Leeds, but in a court hundreds of miles away in Jersey. And Mark Taylor, a solicitor and long-standing ally of Bates, has admitted that he claimed to be on the board of Leeds long after he quit as a director. The company that ran the club, Leeds United Association Football Club Ltd (LUAFC), was put into administration on May 4. Bates and Taylor had both been directors, then resigned as soon as administrators from KPMG took control. But in an affidavit almost two months later, on July 3, Taylor said he was still on the board. The sworn statement said quite explicitly: “I am a director of Leeds United Association Football Club Limited.” The affidavit was filed in a Jersey court as part of a case involving a dispute over money that Leeds said it was owed. Companies House records confirm that Taylor had resigned almost two months earlier. And on July 19, two weeks after Taylor signed his affidavit, KPMG confirmed in writing that neither Taylor nor Bates had been reinstated. This weekend, Taylor said: “It was simply a mistake.” He admitted that his claim that he remained a director of LUAFC was false, but that he had forgotten that he had signed the papers quitting the LUAFC board. It was one of dozens of documents he signed when Leeds went into administration in May, he added. Taylor said he had written to the judge in the Jersey case last week to apologise for the error. The Jersey case involves LUAFC and Admatch, a company that handled payments for season tickets at Leeds. Before Leeds went bust LUAFC launched a claim against Admatch, saying that money that ought to have been handed over to the club was being wrongly withheld. Admatch disputes the claim. It says that it was entitled to hold back money under the terms of an “offset agreement” because Leeds owed a related company in Britain about £2m. When Leeds went into administration in May, KPMG struck what is known as a “hive-down” agreement. Under that deal, LUAFC’s assets, including the rights to the legal claim against Admatch, were sold to a new company, Leeds 2007, where Bates and Taylor were, and remain, directors. Taylor’s affidavit was in support of an application to the Royal Court of Jersey asking for Leeds 2007 to be added to the claim as a plaintiff alongside LUAFC. The disclosure that Taylor has made a false claim about his status as an LUAFC director will be pounced on by antiBates campaigners. They have complained about the conduct of Bates and Taylor and the way in which KPMG handled the administration of Leeds and the club’s eventual sale. The hive-down agreement under which KPMG sold LUAFC’s assets to Leeds 2007 has not been made public. But some details have begun to emerge. Leeds 2007 paid an initial £500,000 for the club’s assets. Of the total, £330,000 was for so-called “football assets” � Leeds’s right to play in league competitions, players’ contracts and money from selling players. The remainder covered physical assets, leases on Elland Road and the club’s training ground � plus the right to benefit from any legal claims by the old LUAFC that were already under way. KPMG has come under intense pressure to give details about the sale of Leeds back to Bates and his supporters. An initial attempt to construct a deal with the veteran football tycoon was torpedoed by a legal challenge from Revenue & Customs. KPMG then hastily put Leeds up for auction earlier this month. Bates succeeded in buying back the club on July 10. Now dissident creditors are pressing KPMG to say exactly when Bates submitted his winning bid for the club and whether he put in an initial bid and then revised it. KPMG is also being asked what proof it received to show that Bates had the available funds. KPMG wrote to creditors this weekend explaining the sale to Bates. The KPMG letter showed that four groups bid for Leeds � and one was prepared to pay £1.7m more than Bates. But Leeds’s biggest creditor, a shadowy offshore trust called Astor, said that as long as the Bates offer was victorious, it would not press for its money to be repaid. However, if any other bid succeeded, Astor would demand its share of any payout. This meant that the likely payment to other creditors � 11.2p in the pound under the Bates bid � was marginally higher than the payout other creditors would have received had the other bid been accepted. The Football League has been upset at the way the Leeds administration and subsequent sale has been handled. It is understood that Lord Brian Mawhinney, chairman of the league, has met KPMG representatives within the past week. KPMG will say only that there has been contact “at the highest level”.
Growing sense of disquiet
By Rod Liddle, Sunday Times, 29/7/07
The Football League is at last showing signs of having had enough. Brian Mawhinney, the Football League chairman, has handled the extraordinary saga of Leeds United with a rather welcome scepticism and at times outright disbelief. The implication is that things have gone far enough, thank you. Next week Lord Mawhinney will meet the former administrators KPMG and the “new” owners, to find a way forward. It is still not certain that Leeds will be allowed to start the season, let alone spend even more of what is, properly, taxpayers’ money on another cache of expensive, useless players. So many questions about Ken Bates’s stewardship remain that it should properly take Mawhinney the entire season to sort it all out. For example, Leeds owe £17.7m to three mysterious offshore companies; it would be interesting to find out precisely what the club procured for this sum of money. Or more simply still: why did KPMG allow Bates to buy back the club, having offered creditors the derisory one penny in the pound? Mawhinney must decide whether or not Leeds United constitute an exception to the rule that clubs in administration must have a company voluntary agreement to continue in business; I can’t see why they should be an exceptional case, hard though that may seem on their long-suffering and loyal fans. There are a lot of long-suffering and loyal fans around, appalled by the state of the game, and it is unlikely that the coming season will do much to alleviate their sense of disquiet. Sooner or later the likes of Mawhinney will have to make a hard and perhaps cruel decision to let everyone know: this sort of stuff cannot go on.
Bates faces up to flower power
The latest financial shenanigans at Leeds United leave many more questions than answers
Ben Laurance, Sunday Times, 29/7/07
OUTSIDE Leeds United’s Elland Road ground flowers have been stacked around the statue of club legend Billy Bremner as supporters plead for an end to the three months of turmoil that have engulfed Yorkshire’s once-great footballing power-house. Fans have set up a “Love Leeds, Hate Bates” website appealing to tycoon Ken Bates to stand down as chairman of the club “and sell your controlling interest immediately to a party with Leeds United and football at its heart”. And now Bates’s key business partner finds himself embroiled in a bizarre legal episode. It stems from Bates’s successful move to buy the club back from administrators after it went bust. But this dispute is being played out not in Leeds, but in a court hundreds of miles away in Jersey. And Mark Taylor, a solicitor and long-standing ally of Bates, has admitted that he claimed to be on the board of Leeds long after he quit as a director. The company that ran the club, Leeds United Association Football Club Ltd (LUAFC), was put into administration on May 4. Bates and Taylor had both been directors, then resigned as soon as administrators from KPMG took control. But in an affidavit almost two months later, on July 3, Taylor said he was still on the board. The sworn statement said quite explicitly: “I am a director of Leeds United Association Football Club Limited.” The affidavit was filed in a Jersey court as part of a case involving a dispute over money that Leeds said it was owed. Companies House records confirm that Taylor had resigned almost two months earlier. And on July 19, two weeks after Taylor signed his affidavit, KPMG confirmed in writing that neither Taylor nor Bates had been reinstated. This weekend, Taylor said: “It was simply a mistake.” He admitted that his claim that he remained a director of LUAFC was false, but that he had forgotten that he had signed the papers quitting the LUAFC board. It was one of dozens of documents he signed when Leeds went into administration in May, he added. Taylor said he had written to the judge in the Jersey case last week to apologise for the error. The Jersey case involves LUAFC and Admatch, a company that handled payments for season tickets at Leeds. Before Leeds went bust LUAFC launched a claim against Admatch, saying that money that ought to have been handed over to the club was being wrongly withheld. Admatch disputes the claim. It says that it was entitled to hold back money under the terms of an “offset agreement” because Leeds owed a related company in Britain about £2m. When Leeds went into administration in May, KPMG struck what is known as a “hive-down” agreement. Under that deal, LUAFC’s assets, including the rights to the legal claim against Admatch, were sold to a new company, Leeds 2007, where Bates and Taylor were, and remain, directors. Taylor’s affidavit was in support of an application to the Royal Court of Jersey asking for Leeds 2007 to be added to the claim as a plaintiff alongside LUAFC. The disclosure that Taylor has made a false claim about his status as an LUAFC director will be pounced on by antiBates campaigners. They have complained about the conduct of Bates and Taylor and the way in which KPMG handled the administration of Leeds and the club’s eventual sale. The hive-down agreement under which KPMG sold LUAFC’s assets to Leeds 2007 has not been made public. But some details have begun to emerge. Leeds 2007 paid an initial £500,000 for the club’s assets. Of the total, £330,000 was for so-called “football assets” � Leeds’s right to play in league competitions, players’ contracts and money from selling players. The remainder covered physical assets, leases on Elland Road and the club’s training ground � plus the right to benefit from any legal claims by the old LUAFC that were already under way. KPMG has come under intense pressure to give details about the sale of Leeds back to Bates and his supporters. An initial attempt to construct a deal with the veteran football tycoon was torpedoed by a legal challenge from Revenue & Customs. KPMG then hastily put Leeds up for auction earlier this month. Bates succeeded in buying back the club on July 10. Now dissident creditors are pressing KPMG to say exactly when Bates submitted his winning bid for the club and whether he put in an initial bid and then revised it. KPMG is also being asked what proof it received to show that Bates had the available funds. KPMG wrote to creditors this weekend explaining the sale to Bates. The KPMG letter showed that four groups bid for Leeds � and one was prepared to pay £1.7m more than Bates. But Leeds’s biggest creditor, a shadowy offshore trust called Astor, said that as long as the Bates offer was victorious, it would not press for its money to be repaid. However, if any other bid succeeded, Astor would demand its share of any payout. This meant that the likely payment to other creditors � 11.2p in the pound under the Bates bid � was marginally higher than the payout other creditors would have received had the other bid been accepted. The Football League has been upset at the way the Leeds administration and subsequent sale has been handled. It is understood that Lord Brian Mawhinney, chairman of the league, has met KPMG representatives within the past week. KPMG will say only that there has been contact “at the highest level”.
Growing sense of disquiet
By Rod Liddle, Sunday Times, 29/7/07
The Football League is at last showing signs of having had enough. Brian Mawhinney, the Football League chairman, has handled the extraordinary saga of Leeds United with a rather welcome scepticism and at times outright disbelief. The implication is that things have gone far enough, thank you. Next week Lord Mawhinney will meet the former administrators KPMG and the “new” owners, to find a way forward. It is still not certain that Leeds will be allowed to start the season, let alone spend even more of what is, properly, taxpayers’ money on another cache of expensive, useless players. So many questions about Ken Bates’s stewardship remain that it should properly take Mawhinney the entire season to sort it all out. For example, Leeds owe £17.7m to three mysterious offshore companies; it would be interesting to find out precisely what the club procured for this sum of money. Or more simply still: why did KPMG allow Bates to buy back the club, having offered creditors the derisory one penny in the pound? Mawhinney must decide whether or not Leeds United constitute an exception to the rule that clubs in administration must have a company voluntary agreement to continue in business; I can’t see why they should be an exceptional case, hard though that may seem on their long-suffering and loyal fans. There are a lot of long-suffering and loyal fans around, appalled by the state of the game, and it is unlikely that the coming season will do much to alleviate their sense of disquiet. Sooner or later the likes of Mawhinney will have to make a hard and perhaps cruel decision to let everyone know: this sort of stuff cannot go on.
