Leeds face financial meltdown at end of February if Cellino's takeover of club fails
Mail 16/2/14
By NICK HARRIS
Leeds United's Bahraini bank owners GFH face a race against time to get Football League approval to sell to Italian fraudster Massimo Cellino — or risk financial meltdown on payday at the end of this month.
As the Mail on Sunday revealed last week, GFH have agreed to sell to Cellino in a deal that could cost the Sardinian grain tycoon up to £33.5million — and solve the club’s pressing cash issues.
Crucially, if he takes control, he will assume responsibility for the club’s mounting debts and be responsible for providing cash flow to meet losses running at around £1m a month.
But before Cellino can complete his takeover, he needs to pass the League’s ‘owners and directors’ test, commonly known as the ‘fit and proper person test’.
And his conviction for false accounting and the possibility of a trial for alleged embezzlement in his native Italy mean that is not a foregone conclusion. It is believed another conviction for fraud was quashed on appeal.
Cellino met League officials for three hours on Wednesday in London — but weeks of processing paperwork lie ahead with no certainty the League will give him the green light.
Lawyers believe Cellino — owner of Cagliari in Serie A — can pass the test by arguing that his past conviction, for which he received a suspended sentence is ‘spent’.
But the League are aware that deeming him ‘fit and proper’ could make them a laughing stock.
GFH are now desperate to offload 75 per cent of Leeds to Cellino, the only potential buyer willing to hand them the asking price they want.
‘GFH have borrowed money to pay the wages for the best part of a year already,’ said a source familiar with the club’s finances.
‘They borrowed from Cellino to pay the January wages. February’s are due within a fortnight. If the sale doesn’t go through, things could get critical.’
Sources close to GFH say taking further loans to pay wages is one possibility, but admit that will only increase pressure to find a rich buyer — or consider administration.
The cash flow problem is particularly acute now because Leeds have no home game — and no gate money — until March 8.
By NICK HARRIS
Leeds United's Bahraini bank owners GFH face a race against time to get Football League approval to sell to Italian fraudster Massimo Cellino — or risk financial meltdown on payday at the end of this month.
As the Mail on Sunday revealed last week, GFH have agreed to sell to Cellino in a deal that could cost the Sardinian grain tycoon up to £33.5million — and solve the club’s pressing cash issues.
Crucially, if he takes control, he will assume responsibility for the club’s mounting debts and be responsible for providing cash flow to meet losses running at around £1m a month.
But before Cellino can complete his takeover, he needs to pass the League’s ‘owners and directors’ test, commonly known as the ‘fit and proper person test’.
And his conviction for false accounting and the possibility of a trial for alleged embezzlement in his native Italy mean that is not a foregone conclusion. It is believed another conviction for fraud was quashed on appeal.
Cellino met League officials for three hours on Wednesday in London — but weeks of processing paperwork lie ahead with no certainty the League will give him the green light.
Lawyers believe Cellino — owner of Cagliari in Serie A — can pass the test by arguing that his past conviction, for which he received a suspended sentence is ‘spent’.
But the League are aware that deeming him ‘fit and proper’ could make them a laughing stock.
GFH are now desperate to offload 75 per cent of Leeds to Cellino, the only potential buyer willing to hand them the asking price they want.
‘GFH have borrowed money to pay the wages for the best part of a year already,’ said a source familiar with the club’s finances.
‘They borrowed from Cellino to pay the January wages. February’s are due within a fortnight. If the sale doesn’t go through, things could get critical.’
Sources close to GFH say taking further loans to pay wages is one possibility, but admit that will only increase pressure to find a rich buyer — or consider administration.
The cash flow problem is particularly acute now because Leeds have no home game — and no gate money — until March 8.
