Leeds adrift in sea of uncertainty as League casts off Massimo Cellino
Guardian 24/3/14
Championship club must find fresh investment funds quickly after the Italian's attempt to buy a majority stake was rejected
James Riach
For Leeds United the future remains uncertain. There have been turbulent times at Elland Road over the past 10 years but none more so than the situation over recent months. Now, following the decision by the Football League to reject Massimo Cellino's takeover, there is at least a semblance of closure in a saga that has played out dramatically since the Italian's interest first became apparent. Yet the club's plight has arguably never been more fraught with danger.
Credit must go to the League who, unbowed by pressure from the club to make an announcement on Friday, declared on Monday that Cellino has been disqualified from buying a majority stake in Leeds under the "owners' and directors' test" after being convicted in Italy of failing to pay €388,500 (£235,000) of import tax on Nélie, a yacht seized by police and customs officials in June 2012.
Given that the Italian has been bankrolling the club for the past two months – paying wages and staff costs as well as providing money for loan signings – it leaves Leeds in a perilous position.
David Haigh, the club's managing director, who was due to become the chief executive under Cellino's regime, declared earlier in the month that there was "no chance" of Leeds going into administration and that United were in "good hands". Indeed, a club statement issued on Monday on Monday said: "We would like to reassure the fans of the continuity of our great club."
The reality is that Cellino is owed a significant reimbursement. It is understood he has put around £10m into Leeds since January and reports in the local media say he is due interest of 10% on the money injected. Given that Leeds are operating on losses of approximately £1m a month, Haigh's assertion will do little to dampen fears of supporters who are deeply concerned about the club's future.
Gulf Finance House, the Bahrain-based bank who bought the club from Ken Bates in December 2012, must now go back to the drawing board in their desperate search for fresh investment. Cellino told the Guardian: "GFH tried to sell to me because they needed to sell Leeds, not because they wanted to."
GFH could turn to Mike Farnan and the Together Leeds consortium, who still have an interest in buying the club. However, given the controversy that has blighted GFH's tenure, who knows what the future holds?
Serious questions must be asked regarding the background checks that the Bahrain investment bank compiled on Cellino before agreeing to sell a 75% stake in the club to his company Eleonora Sports in February. Cellino, who lives in Miami and has been president of the Serie A club Cagliari for more than 20 years, is certainly a colourful and controversial character, and even the quickest of internet searches would have discovered that he had a number of charges to his name in Italy.
The Football League's rules, laid out in its "owners' and directors' test", are clear. Maligned following the takeovers at Birmingham City, Notts County and Coventry City in recent times, the organisation has acknowledged that more responsibility has to be taken to protect clubs and find out who prospective owners are and where their money is coming from.
If GFH had done the same, then Leeds would not be in this predicament. They would have ascertained that Cellino has a 2001 conviction for false accounting, for which he was given a 15-month suspended prison sentence, and that he is under investigation for alleged misuse of public funds relating to work on Cagliari's Quartu Sant'Elena stadium.
There is also the matter of two trials for alleged evasion of import duty this year, one relating to another yacht, the other to a Range Rover. Cellino denies wrongdoing on both counts.
The most pressing offence that GFH would have discovered, though, was the charge against the Italian in a Sardinia court accusing him of illegally evading import duty on Nélie.
The guilty verdict that was delivered last week, subject to appeal, was the key decision that caused the League to vote unanimously to disqualify Cellino from taking control of Leeds.
The problem for GFH was that Cellino was the man offering far more money for Leeds than any other bidder. In a frantic attempt to secure the financial future of the Championship club, glaring oversights were made that now leave Leeds in a much more dangerous position than before the Italian entered the picture.
Despite Haigh insisting that administration was not on the agenda, even the suggestion of such a fate, which would lead to the club being docked 10 points, could put off investors. Anyone interested in securing the club might be persuaded to hold out and wait. If Leeds descend into deeper financial trouble and administration becomes a possibility, investors would most likely wait and then swoop in to buy the club for a vastly reduced sum.
Cellino claims he is not motivated by money and repayment is not an immediate priority. However, Leeds' future is in the balance – not for the first time.
Championship club must find fresh investment funds quickly after the Italian's attempt to buy a majority stake was rejected
James Riach
For Leeds United the future remains uncertain. There have been turbulent times at Elland Road over the past 10 years but none more so than the situation over recent months. Now, following the decision by the Football League to reject Massimo Cellino's takeover, there is at least a semblance of closure in a saga that has played out dramatically since the Italian's interest first became apparent. Yet the club's plight has arguably never been more fraught with danger.
Credit must go to the League who, unbowed by pressure from the club to make an announcement on Friday, declared on Monday that Cellino has been disqualified from buying a majority stake in Leeds under the "owners' and directors' test" after being convicted in Italy of failing to pay €388,500 (£235,000) of import tax on Nélie, a yacht seized by police and customs officials in June 2012.
Given that the Italian has been bankrolling the club for the past two months – paying wages and staff costs as well as providing money for loan signings – it leaves Leeds in a perilous position.
David Haigh, the club's managing director, who was due to become the chief executive under Cellino's regime, declared earlier in the month that there was "no chance" of Leeds going into administration and that United were in "good hands". Indeed, a club statement issued on Monday on Monday said: "We would like to reassure the fans of the continuity of our great club."
The reality is that Cellino is owed a significant reimbursement. It is understood he has put around £10m into Leeds since January and reports in the local media say he is due interest of 10% on the money injected. Given that Leeds are operating on losses of approximately £1m a month, Haigh's assertion will do little to dampen fears of supporters who are deeply concerned about the club's future.
Gulf Finance House, the Bahrain-based bank who bought the club from Ken Bates in December 2012, must now go back to the drawing board in their desperate search for fresh investment. Cellino told the Guardian: "GFH tried to sell to me because they needed to sell Leeds, not because they wanted to."
GFH could turn to Mike Farnan and the Together Leeds consortium, who still have an interest in buying the club. However, given the controversy that has blighted GFH's tenure, who knows what the future holds?
Serious questions must be asked regarding the background checks that the Bahrain investment bank compiled on Cellino before agreeing to sell a 75% stake in the club to his company Eleonora Sports in February. Cellino, who lives in Miami and has been president of the Serie A club Cagliari for more than 20 years, is certainly a colourful and controversial character, and even the quickest of internet searches would have discovered that he had a number of charges to his name in Italy.
The Football League's rules, laid out in its "owners' and directors' test", are clear. Maligned following the takeovers at Birmingham City, Notts County and Coventry City in recent times, the organisation has acknowledged that more responsibility has to be taken to protect clubs and find out who prospective owners are and where their money is coming from.
If GFH had done the same, then Leeds would not be in this predicament. They would have ascertained that Cellino has a 2001 conviction for false accounting, for which he was given a 15-month suspended prison sentence, and that he is under investigation for alleged misuse of public funds relating to work on Cagliari's Quartu Sant'Elena stadium.
There is also the matter of two trials for alleged evasion of import duty this year, one relating to another yacht, the other to a Range Rover. Cellino denies wrongdoing on both counts.
The most pressing offence that GFH would have discovered, though, was the charge against the Italian in a Sardinia court accusing him of illegally evading import duty on Nélie.
The guilty verdict that was delivered last week, subject to appeal, was the key decision that caused the League to vote unanimously to disqualify Cellino from taking control of Leeds.
The problem for GFH was that Cellino was the man offering far more money for Leeds than any other bidder. In a frantic attempt to secure the financial future of the Championship club, glaring oversights were made that now leave Leeds in a much more dangerous position than before the Italian entered the picture.
Despite Haigh insisting that administration was not on the agenda, even the suggestion of such a fate, which would lead to the club being docked 10 points, could put off investors. Anyone interested in securing the club might be persuaded to hold out and wait. If Leeds descend into deeper financial trouble and administration becomes a possibility, investors would most likely wait and then swoop in to buy the club for a vastly reduced sum.
Cellino claims he is not motivated by money and repayment is not an immediate priority. However, Leeds' future is in the balance – not for the first time.