SPECIAL REPORT: Real story behind the dirty war being fought out at Elland Road
Mail 6/2/14
By MATT LAWTON
Even by the standards of Leeds United, a club that endured Brian Clough’s ill-fated 44-day reign and the financial collapse under Peter Ridsdale, the past seven days at Elland Road have been extraordinary.
Rarely have we witnessed a more acrimonious power struggle at an English football club — an unprecedented and complicated battle for control of a once-great institution. Men in suits have grappled, players have been used as pawns and, like a West End farce, the manager has been sacked and then reinstated. In further tensions bubbling beneath the surface, the prospective new owner’s lawyer has been ejected from the ground by security and the club’s official shirt sponsor has hit Leeds with a winding-up petition for an unpaid debt.
Even the private lives of key figures have been used as leverage in this increasingly dirty war. It is a war being waged between three principal parties.
In one corner is the Bahraini-owned investment bank Gulf Finance House, the club’s owners who are looking to sell.
Then there is David Haigh, the club’s managing director and a man with political as well as business ambitions, who is trying to retain power by being part of a successful takeover.
Haigh’s Sport Capital consortium was headed by Andy Flowers, the managing director of shirt sponsors Enterprise Insurance. Their failure to raise sufficient funds opened the door to Massimo Cellino — and then things got really tasty.
Cellino, a controversial Italian with two fraud convictions who once stalked both West Ham and Sheffield Wednesday, now appears to be in the driving seat.
He agreed a deal with GFH last Friday and, as MailOnline revealed on Thursday, his bid was given further credibility by the news that he has sold Serie A club Cagliari after 22 years in charge.
While GFH don’t appear keen to do business with Cellino, at this stage he is the only one to turn up with any money . Those are the headlines. The details of this power struggle are peppered with tension and hostility.
Cellino and his advisers have been battered over their treatment of Leeds manager Brian McDermott.
Last Friday was a foggy and chilly day in Leeds but in Elland Road a full-blown storm was developing.
Cellino was there, as were former Middlesbrough player Gianluca Festa — brought in to take over from McDermott — and teams of lawyers and accountants.
Sources close to Cellino insist a transaction was completed, with all documents signed by both sides and dated January 31. He did not hand over the £25million that would have secured a 75 per cent stake. That will only happen if the Italian passes the Football League’s ‘fit and proper persons test’.
But Cellino did agree to lend the club £1.5m, which enabled them to pay the wages of the players and the staff.
Not only that, Sportsmail understands £140,000 of that money was also paid to Crewe Alexandra, who were threatening to issue an embargo preventing midfielder Luke Murphy from playing because of money owed on his £1m transfer in June last year.
Cellino obviously thought the deal was done, and claims he received a text message from the club’s chairman Salah Nooruddin, saying: ‘Congratulation. You are now the new owner of Leeds.’
With the mood music suggesting only the details were left to put in place, Cellino’s lawyer Chris Farnell acted swiftly and brutally in sacking McDermott. the club could only be granted once the Football League had completed their checks.
Farnell delivered the news to McDermott during a telephone conversation and sparked outrage among supporters understandably alarmed by the chaos.
While this drama was being played out, club captain Ross McCormack had been summoned to Elland Road to discuss a possible £4m transfer to Cardiff City. He was, it seems, being used as a pawn in a desperate game of brinkmanship.
A substantial transfer fee would have removed the need to accept Cellino’s donation and would have given breathing space to a new consortium headed by Flowers.
When Cellino got wind of this development, he told McCormack he was needed at the club, and the 27-year-old Scot responded by scoring a hat-trick against Huddersfield the following day.
Other players have been less fortunate. Picture the 23-year-old Italian, Andrea Tabanelli, sitting in a Leeds hotel room still unsure if he has a future at the club.
Tabanelli is the human embodiment of the stalled Italian bid. He arrived in Yorkshire last Friday as a loan signing. On Thursday he was still waiting for someone official from the club to speak to him, having trained alone for the seventh straight day in a local gym.
‘I really do feel sorry for the lad,’ said one club insider. ‘He has been a victim of circumstances.’
The loan transfer, and more specifically the player’s registration, is now an issue being looked at by the Football League. As well as the structure of the deal, it has been suggested that there is a problem with the transfer documents.
Haigh would normally be expected to sign such a document but last Friday he was in Geneva on business. On Thursday night, a spokesman nevertheless insisted the paperwork filed with the Football League was perfectly correct.
Just why the decision on McDermott was reversed is unclear. But it seems likely to have been a panic measure when the realisation dawned that it might be weeks before the Football League reach a decision on Cellino’s suitability — especially as the Italian’s case is complicated by a legal argument that insists his fraud convictions are ‘spent’ and should not be taken into account.
By Monday, Haigh had seen to it that McDermott was back at the club’s training ground and the mood at the club had changed dramatically. Over at Elland Road, Farnell was working alone in the club’s boardroom.
His presence was obviously unacceptable and he was confronted by Haigh and another director appointed by GFH, Salem Patel.
Haigh and Farnell do not see eye to eye, and that has been exacerbated by the fact Farnell was being lined up by Cellino to occupy the kind of role currently performed by Haigh.
After a brief exchange, Farnell was asked to leave the premises, with a security guard ensuring he made it to his car. Barely had he slammed the car door shut when the story was being reported by a local newspaper journalist.
On Tuesday it nevertheless emerged that, through Enterprise Insurance, Flowers was behind the issue of a winding-up petition demanding the payment of a £1.8m debt from the club.
Twenty-four hours later, however, Flowers admitted his second consortium had also failed and issued an angry statement that suggested he thinks Cellino now has the club. He claimed that the deal had ‘no consideration for its [the club’s] ultimate security and wellbeing’. He also branded it a ‘fire-sale transaction’.
With Cagliari sold, Cellino is due to arrive from Miami next week for his Football League hearing. He seems determined enough to cut his way through the confusion and acrimony, undoubtedly with the riches on offer in the Premier League as his ultimate target.
If he does take control, and right now it seems likely that he will, there is much he will have to resolve. Haigh is said to be owed money , around £3.5m. Flowers, through Sport Capital, is understood to have donated around £6m. At this moment there is even an ongoing legal dispute with Ken Bates, who sold the club to GFH in November 2012.
On Thursday, the affair reached a new level of bitterness, when the personal life of a key member of the Italian camp was plastered on the back page of a national newspaper.
Over in Leeds, on the same day, McDermott was putting on a brave face. The former Reading manager seems destined to be a casualty of the takeover, but he used his weekly press conference to ask Cellino at least to give him a chance to prove himself should the Italian become his employer.
‘If Mr Cellino owns the club, it’s very important that the manager and the owner have respect and they get on and can work together,’ he said.
Right now there seems little chance of that happening.
By MATT LAWTON
Even by the standards of Leeds United, a club that endured Brian Clough’s ill-fated 44-day reign and the financial collapse under Peter Ridsdale, the past seven days at Elland Road have been extraordinary.
Rarely have we witnessed a more acrimonious power struggle at an English football club — an unprecedented and complicated battle for control of a once-great institution. Men in suits have grappled, players have been used as pawns and, like a West End farce, the manager has been sacked and then reinstated. In further tensions bubbling beneath the surface, the prospective new owner’s lawyer has been ejected from the ground by security and the club’s official shirt sponsor has hit Leeds with a winding-up petition for an unpaid debt.
Even the private lives of key figures have been used as leverage in this increasingly dirty war. It is a war being waged between three principal parties.
In one corner is the Bahraini-owned investment bank Gulf Finance House, the club’s owners who are looking to sell.
Then there is David Haigh, the club’s managing director and a man with political as well as business ambitions, who is trying to retain power by being part of a successful takeover.
Haigh’s Sport Capital consortium was headed by Andy Flowers, the managing director of shirt sponsors Enterprise Insurance. Their failure to raise sufficient funds opened the door to Massimo Cellino — and then things got really tasty.
Cellino, a controversial Italian with two fraud convictions who once stalked both West Ham and Sheffield Wednesday, now appears to be in the driving seat.
He agreed a deal with GFH last Friday and, as MailOnline revealed on Thursday, his bid was given further credibility by the news that he has sold Serie A club Cagliari after 22 years in charge.
While GFH don’t appear keen to do business with Cellino, at this stage he is the only one to turn up with any money . Those are the headlines. The details of this power struggle are peppered with tension and hostility.
Cellino and his advisers have been battered over their treatment of Leeds manager Brian McDermott.
Last Friday was a foggy and chilly day in Leeds but in Elland Road a full-blown storm was developing.
Cellino was there, as were former Middlesbrough player Gianluca Festa — brought in to take over from McDermott — and teams of lawyers and accountants.
Sources close to Cellino insist a transaction was completed, with all documents signed by both sides and dated January 31. He did not hand over the £25million that would have secured a 75 per cent stake. That will only happen if the Italian passes the Football League’s ‘fit and proper persons test’.
But Cellino did agree to lend the club £1.5m, which enabled them to pay the wages of the players and the staff.
Not only that, Sportsmail understands £140,000 of that money was also paid to Crewe Alexandra, who were threatening to issue an embargo preventing midfielder Luke Murphy from playing because of money owed on his £1m transfer in June last year.
Cellino obviously thought the deal was done, and claims he received a text message from the club’s chairman Salah Nooruddin, saying: ‘Congratulation. You are now the new owner of Leeds.’
With the mood music suggesting only the details were left to put in place, Cellino’s lawyer Chris Farnell acted swiftly and brutally in sacking McDermott. the club could only be granted once the Football League had completed their checks.
Farnell delivered the news to McDermott during a telephone conversation and sparked outrage among supporters understandably alarmed by the chaos.
While this drama was being played out, club captain Ross McCormack had been summoned to Elland Road to discuss a possible £4m transfer to Cardiff City. He was, it seems, being used as a pawn in a desperate game of brinkmanship.
A substantial transfer fee would have removed the need to accept Cellino’s donation and would have given breathing space to a new consortium headed by Flowers.
When Cellino got wind of this development, he told McCormack he was needed at the club, and the 27-year-old Scot responded by scoring a hat-trick against Huddersfield the following day.
Other players have been less fortunate. Picture the 23-year-old Italian, Andrea Tabanelli, sitting in a Leeds hotel room still unsure if he has a future at the club.
Tabanelli is the human embodiment of the stalled Italian bid. He arrived in Yorkshire last Friday as a loan signing. On Thursday he was still waiting for someone official from the club to speak to him, having trained alone for the seventh straight day in a local gym.
‘I really do feel sorry for the lad,’ said one club insider. ‘He has been a victim of circumstances.’
The loan transfer, and more specifically the player’s registration, is now an issue being looked at by the Football League. As well as the structure of the deal, it has been suggested that there is a problem with the transfer documents.
Haigh would normally be expected to sign such a document but last Friday he was in Geneva on business. On Thursday night, a spokesman nevertheless insisted the paperwork filed with the Football League was perfectly correct.
Just why the decision on McDermott was reversed is unclear. But it seems likely to have been a panic measure when the realisation dawned that it might be weeks before the Football League reach a decision on Cellino’s suitability — especially as the Italian’s case is complicated by a legal argument that insists his fraud convictions are ‘spent’ and should not be taken into account.
By Monday, Haigh had seen to it that McDermott was back at the club’s training ground and the mood at the club had changed dramatically. Over at Elland Road, Farnell was working alone in the club’s boardroom.
His presence was obviously unacceptable and he was confronted by Haigh and another director appointed by GFH, Salem Patel.
Haigh and Farnell do not see eye to eye, and that has been exacerbated by the fact Farnell was being lined up by Cellino to occupy the kind of role currently performed by Haigh.
After a brief exchange, Farnell was asked to leave the premises, with a security guard ensuring he made it to his car. Barely had he slammed the car door shut when the story was being reported by a local newspaper journalist.
On Tuesday it nevertheless emerged that, through Enterprise Insurance, Flowers was behind the issue of a winding-up petition demanding the payment of a £1.8m debt from the club.
Twenty-four hours later, however, Flowers admitted his second consortium had also failed and issued an angry statement that suggested he thinks Cellino now has the club. He claimed that the deal had ‘no consideration for its [the club’s] ultimate security and wellbeing’. He also branded it a ‘fire-sale transaction’.
With Cagliari sold, Cellino is due to arrive from Miami next week for his Football League hearing. He seems determined enough to cut his way through the confusion and acrimony, undoubtedly with the riches on offer in the Premier League as his ultimate target.
If he does take control, and right now it seems likely that he will, there is much he will have to resolve. Haigh is said to be owed money , around £3.5m. Flowers, through Sport Capital, is understood to have donated around £6m. At this moment there is even an ongoing legal dispute with Ken Bates, who sold the club to GFH in November 2012.
On Thursday, the affair reached a new level of bitterness, when the personal life of a key member of the Italian camp was plastered on the back page of a national newspaper.
Over in Leeds, on the same day, McDermott was putting on a brave face. The former Reading manager seems destined to be a casualty of the takeover, but he used his weekly press conference to ask Cellino at least to give him a chance to prove himself should the Italian become his employer.
‘If Mr Cellino owns the club, it’s very important that the manager and the owner have respect and they get on and can work together,’ he said.
Right now there seems little chance of that happening.