One year of change under GFH Capital
YEP 21/8/13
One year on and a once faceless Dubai-based company is now very much a public figurehead at Leeds United. Phil Hay reports.
For two-and-a-half months the company from Dubai was faceless and nameless, hidden behind non-disclosure agreements.
It was only when representatives of GFH Capital put their heads above the parapet a year ago that the takeover of Leeds United finally strayed into the public arena.
On this day in 2012, GFH Capital was identified as United’s would-be buyer after two of its executives, David Haigh and Salem Patel, sat in the directors’ box at Elland Road for the first game of the 2012-13 Championship season. Unfamiliar faces and unfamiliar names became recognisable overnight as the proposed purchase of Ken Bates’ majority stake entered a decisive stage. Leeds and GFH Capital declined to comment on the YEP’s report of August 21 but the attention on the private equity firm and its parent company, Gulf Finance House, encouraged it to break cover.
Through an agency in London, Outside Organisation, GFH Capital issued a press release on September 28 quoting Haigh, Patel and Hisham Alrayes – Gulf Finance House’s chief executive – and stating its aims for United. Among them was a commitment to “take back ownership of Elland Road eventually” and “move the club back to the Premier League as quickly as possible.” Haigh spoke there and then of a “sustainable future”, the phrase by which GFH Capital continues to live.
The buy-out of Bates was painstaking and, according to Patel, due diligence did not conclude until October. Negotiations with United’s former chairman had originally started in May. The details of a 100 per cent takeover were eventually ratified after a final phone call between Bates and Haigh in the small hours of November 20 and announced the following morning. GFH Capital completed its purchase a month later, four days before Christmas.
The business as it was when Haigh and Patel sat through United’s 1-0 win over Wolverhampton Wanderers is not the business GFH Capital now controls. Leeds’ standing is unchanged – still a Championship club with a Championship squad – but most areas of operation at Elland Road have felt GFH Capital’s touch.
Club chairman Salah Nooruddin, who joined the board in April, said last week: “There were many clubs available for sale in the Championship but Leeds have a different reputation. It was because of this potential that we were attracted.”
The boardroom is where change came most dramatically. GFH Capital has removed no fewer than three directors – Bates, Yvonne Allen and Peter Lorimer. Former chief executive Shaun Harvey, soon to become CEO of the Football League, will resign from United’s board when he and the club reach an agreement to sever his employment. A conflict of interest will prevent Harvey from retaining his directorship when the Football League officially appoint him on October 1.
Paul Hunt, the former Blackburn Rovers board member, was named as Leeds’ acting chief executive in Harvey’s stead last month and is expected to take on the position permanently when Harvey moves on. Hunt took on the day-to-day running of United from managing director Haigh whose remit at Elland Road focuses primarily on finding investment.
GFH Capital’s stated strategy for Leeds was to create a consortium of “like-minded” shareholders and find strength in numbers. At present Nooruddin holds a stake in excess of 10 per cent through Envest Limited, a company created by him and his wife, and Bahrain’s International Investment Bank (IIB) also owns more than 10 per cent of shares. GFH Capital told the YEP that it continued to control Leeds despite recent accounts for Gulf Finance House appearing to show that it had relinquished its majority stake.
During its time in charge GFH Capital has focused heavily on expenditure at Elland Road. It closed United’s official radio station, Yorkshire Radio, on July 30 and earned a six-figure sum by selling matchday commentary rights to BBC Radio Leeds. It has pushed ticket sales and other marketing schemes to raise turnover. Elland Road in the meantime has seen a spate of redundancies, among which operations manager Alan Hegarty was the most high-profile victim. The board at Leeds have paid close attention to their outgoings with the implications of Financial Fair Play (FFP) now apparent.
It is partly because of FFP that this transfer window has been as tangled a web as last summer’s. GFH Capital is unwilling to raise a £15m wage bill, knowing that United will face a transfer embargo in January 2015 if their losses for this season exceed £3m and investment from directors totals more than £5m. Much as Leeds have changed under its ownership, the squad at Thorp Arch has seen limited alterations.
More work has been done to the backroom team, with Neil Warnock sacked in April and Brian McDermott appointed to replace him along with a new coaching team. Technical director Gwyn Williams, a long-time ally of Bates, was placed on gardening leave before the start of pre-season. Luke Dowling will soon take up the role of chief scout.
There was a time when many doubted whether GFH Capital’s executives would be here to see 2015, so intense was the talk of a fresh buy-out in the spring, but the company is likely to maintain an interest in United in the medium term.
Nooruddin has admitted that manager Brian McDermott is under no pressure to win promotion this season and, in line with his contract, his job is to help underpin a three-year plan.
Bates intended to be involved for that length of time too – as president. Sacking him unexpectedly last month was arguably GFH Capital’s most forthright move to date. Haigh, Patel and a female companion were guests of Bates’ on this day 12 months ago; for the first time in almost nine years, there is no longer a seat for him at United’s top table. A year of change indeed.
Harvey remains in place but with no active presence
Shaun Harvey is the only surviving member of Ken Bates’ senior management team as GFH Capital heads towards the end of its first year in charge of Leeds United.
But Leeds’ former chief executive has no active presence on the board at Elland Road after a complete revision of United’s structure since GFH Capital agreed its takeover in November 2012. As chairman, Bates fronted a board comprising of Harvey, Yvonne Allen and Peter Lorimer but the 81-year-old’s resignation on June 30 and Harvey’s demotion from the position of CEO the following day removed virtually all trace of the previous regime. Salah Nooruddin replaced Bates as chairman and GFH Capital employees David Haigh, inset, Salem Patel and Hisham Alrayes hold three of the other four seats on the board. Harvey is due to quit his directorship before the end of next month.
The International Investment Bank (IIB), which owns a stake of over 10 per cent in United, has no presence on the Leeds board but the bank’s chief executive, Aabed Al-Zeera, is a director of the club’s parent company, Leeds City Holdings.
For two-and-a-half months the company from Dubai was faceless and nameless, hidden behind non-disclosure agreements.
It was only when representatives of GFH Capital put their heads above the parapet a year ago that the takeover of Leeds United finally strayed into the public arena.
On this day in 2012, GFH Capital was identified as United’s would-be buyer after two of its executives, David Haigh and Salem Patel, sat in the directors’ box at Elland Road for the first game of the 2012-13 Championship season. Unfamiliar faces and unfamiliar names became recognisable overnight as the proposed purchase of Ken Bates’ majority stake entered a decisive stage. Leeds and GFH Capital declined to comment on the YEP’s report of August 21 but the attention on the private equity firm and its parent company, Gulf Finance House, encouraged it to break cover.
Through an agency in London, Outside Organisation, GFH Capital issued a press release on September 28 quoting Haigh, Patel and Hisham Alrayes – Gulf Finance House’s chief executive – and stating its aims for United. Among them was a commitment to “take back ownership of Elland Road eventually” and “move the club back to the Premier League as quickly as possible.” Haigh spoke there and then of a “sustainable future”, the phrase by which GFH Capital continues to live.
The buy-out of Bates was painstaking and, according to Patel, due diligence did not conclude until October. Negotiations with United’s former chairman had originally started in May. The details of a 100 per cent takeover were eventually ratified after a final phone call between Bates and Haigh in the small hours of November 20 and announced the following morning. GFH Capital completed its purchase a month later, four days before Christmas.
The business as it was when Haigh and Patel sat through United’s 1-0 win over Wolverhampton Wanderers is not the business GFH Capital now controls. Leeds’ standing is unchanged – still a Championship club with a Championship squad – but most areas of operation at Elland Road have felt GFH Capital’s touch.
Club chairman Salah Nooruddin, who joined the board in April, said last week: “There were many clubs available for sale in the Championship but Leeds have a different reputation. It was because of this potential that we were attracted.”
The boardroom is where change came most dramatically. GFH Capital has removed no fewer than three directors – Bates, Yvonne Allen and Peter Lorimer. Former chief executive Shaun Harvey, soon to become CEO of the Football League, will resign from United’s board when he and the club reach an agreement to sever his employment. A conflict of interest will prevent Harvey from retaining his directorship when the Football League officially appoint him on October 1.
Paul Hunt, the former Blackburn Rovers board member, was named as Leeds’ acting chief executive in Harvey’s stead last month and is expected to take on the position permanently when Harvey moves on. Hunt took on the day-to-day running of United from managing director Haigh whose remit at Elland Road focuses primarily on finding investment.
GFH Capital’s stated strategy for Leeds was to create a consortium of “like-minded” shareholders and find strength in numbers. At present Nooruddin holds a stake in excess of 10 per cent through Envest Limited, a company created by him and his wife, and Bahrain’s International Investment Bank (IIB) also owns more than 10 per cent of shares. GFH Capital told the YEP that it continued to control Leeds despite recent accounts for Gulf Finance House appearing to show that it had relinquished its majority stake.
During its time in charge GFH Capital has focused heavily on expenditure at Elland Road. It closed United’s official radio station, Yorkshire Radio, on July 30 and earned a six-figure sum by selling matchday commentary rights to BBC Radio Leeds. It has pushed ticket sales and other marketing schemes to raise turnover. Elland Road in the meantime has seen a spate of redundancies, among which operations manager Alan Hegarty was the most high-profile victim. The board at Leeds have paid close attention to their outgoings with the implications of Financial Fair Play (FFP) now apparent.
It is partly because of FFP that this transfer window has been as tangled a web as last summer’s. GFH Capital is unwilling to raise a £15m wage bill, knowing that United will face a transfer embargo in January 2015 if their losses for this season exceed £3m and investment from directors totals more than £5m. Much as Leeds have changed under its ownership, the squad at Thorp Arch has seen limited alterations.
More work has been done to the backroom team, with Neil Warnock sacked in April and Brian McDermott appointed to replace him along with a new coaching team. Technical director Gwyn Williams, a long-time ally of Bates, was placed on gardening leave before the start of pre-season. Luke Dowling will soon take up the role of chief scout.
There was a time when many doubted whether GFH Capital’s executives would be here to see 2015, so intense was the talk of a fresh buy-out in the spring, but the company is likely to maintain an interest in United in the medium term.
Nooruddin has admitted that manager Brian McDermott is under no pressure to win promotion this season and, in line with his contract, his job is to help underpin a three-year plan.
Bates intended to be involved for that length of time too – as president. Sacking him unexpectedly last month was arguably GFH Capital’s most forthright move to date. Haigh, Patel and a female companion were guests of Bates’ on this day 12 months ago; for the first time in almost nine years, there is no longer a seat for him at United’s top table. A year of change indeed.
Harvey remains in place but with no active presence
Shaun Harvey is the only surviving member of Ken Bates’ senior management team as GFH Capital heads towards the end of its first year in charge of Leeds United.
But Leeds’ former chief executive has no active presence on the board at Elland Road after a complete revision of United’s structure since GFH Capital agreed its takeover in November 2012. As chairman, Bates fronted a board comprising of Harvey, Yvonne Allen and Peter Lorimer but the 81-year-old’s resignation on June 30 and Harvey’s demotion from the position of CEO the following day removed virtually all trace of the previous regime. Salah Nooruddin replaced Bates as chairman and GFH Capital employees David Haigh, inset, Salem Patel and Hisham Alrayes hold three of the other four seats on the board. Harvey is due to quit his directorship before the end of next month.
The International Investment Bank (IIB), which owns a stake of over 10 per cent in United, has no presence on the Leeds board but the bank’s chief executive, Aabed Al-Zeera, is a director of the club’s parent company, Leeds City Holdings.