Leeds takeover by GFH in 2012 allegedly part-funded by Iranian government
Mail 4/10/14
Leeds takeover in 2012 may have been partly financed by a fund co-owned by the Iranian government
The alleged Iranian funding may defy a UN Security Council resolution
Massimo Cellino bought 75 per cent of Leeds from Bahraini bankers GFH
By NICK HARRIS FOR MAILONLINE
Leeds United were embroiled in fresh controversy this weekend amid claims the club takeover in 2012 may have been partly financed by a fund co-owned by the Iranian government.
If Iranian money did help finance the takeover, that could contravene international sanctions, sources familiar with the deal have told Sportsmail.
The alleged Iranian funding may defy a United Nations Security Council (UNSC) resolution and is the latest extraordinary twist in the recent history of Leeds, although this publication has seen no evidence to verify such claims.
Sportsmail can also reveal further turmoil lies ahead - entirely separate from the Iranian issue - as the Football League attempt to obtain a copy of an Italian legal judgement that could result in the club’s current majority owner, Massimo Cellino, being deemed unfit to retain his shareholding.
Cellino bought 75 per cent of Leeds from Bahraini bankers Gulf Finance House (GFH) earlier this year. GFH and related parties retain 25 per cent of the club.
It is GFH’s original purchase of the club in 2012 that allegedly involved Iranian money, sources say. GFH bought Leeds from Ken Bates in December 2012 via a Dubai-based subsidiary GFH Capital and insiders say they were so strapped for cash to complete the deal, they suspect money was temporarily borrowed from another company it co-owned, the Injazat Technology Fund, to get the buyout across the line.
The Injazat Technology Fund is co-owned by an investment vehicle in turn owned by the Iranian Government, who, under UNSC sanctions, have been prohibited from various aspects of international trading in an attempt to stop Iran developing a nuclear weapons programme. There is no suggestion Bates knew any money from GFH was ultimately owned by any party other than GFH or has done anything wrong.
The UNSC have yet to respond to Sportsmail about enquiries on the subject. Senior GFH officials in Bahrain and Dubai, as well as two spokesmen for the firm, have also failed to answer any questions.
The Football League will not comment on any private transaction in a takeover. In laymen’s terms, the League cannot be certain and they do not even necessarily have the remit to discover how money is sourced for a club takeover.
The League’s chief executive, Shaun Harvey, finds himself in a particularly uncomfortable position. He was the Leeds CEO when GFH bought the club. He is understood to have had no knowledge of any potential contravention, alleged or otherwise, of rules during the time he worked under GFH. He left the club in 2013.
Sources believe GFH ‘borrowed’ the Injazat money to make up a shortfall needed to pay Bates for his stake in Leeds and later put money back into Injazat’s account.
Yet GFH’s ownership of Leeds turned out to be an unmitigated failure, as promised funds failed to materialise. The club haemorrhaged money under their ownership, and GFH eventually sold 75 per cent of Leeds earlier this year to convicted fraudster Cellino. No other prospective buyer aside from the maverick Italian millionaire was willing to meet the £35million price tag GFH wanted.
Cellino was initially prevented from completing his own takeover after the League ruled he was not a ‘fit and proper person’, following a tax evasion conviction relating to a yacht.
He won an appeal on that decision, pending the release of a detailed judgment which should clarify whether he had been guilty of a crime of dishonesty, or not.
If the full verdict says he is dishonest, the League will attempt to force him to sell Leeds. The League’s problem is that they have no right to access the full verdict. Cellino’s Italian lawyer is the only person, aside from the court, with a full copy.
It has been reported that in the full tax case ruling, Sardinian judge Sandra Lepore said there was ‘elusive intent’ and ‘Machiavellian simulation’ by Cellino. The problem for the League is accessing the document. Lawyers for the League and Cellino have spoken in the past few days and the Leeds owner believes the League are considering some kind of misconduct charge for not giving it to them.
The charge, theoretically, would be that Cellino has failed to notify the League of a change in declarations about his ‘fit and proper’ status. Cellino’s lawyers would mount legal challenges to any charge.
The League declined to comment.
Leeds takeover in 2012 may have been partly financed by a fund co-owned by the Iranian government
The alleged Iranian funding may defy a UN Security Council resolution
Massimo Cellino bought 75 per cent of Leeds from Bahraini bankers GFH
By NICK HARRIS FOR MAILONLINE
Leeds United were embroiled in fresh controversy this weekend amid claims the club takeover in 2012 may have been partly financed by a fund co-owned by the Iranian government.
If Iranian money did help finance the takeover, that could contravene international sanctions, sources familiar with the deal have told Sportsmail.
The alleged Iranian funding may defy a United Nations Security Council (UNSC) resolution and is the latest extraordinary twist in the recent history of Leeds, although this publication has seen no evidence to verify such claims.
Sportsmail can also reveal further turmoil lies ahead - entirely separate from the Iranian issue - as the Football League attempt to obtain a copy of an Italian legal judgement that could result in the club’s current majority owner, Massimo Cellino, being deemed unfit to retain his shareholding.
Cellino bought 75 per cent of Leeds from Bahraini bankers Gulf Finance House (GFH) earlier this year. GFH and related parties retain 25 per cent of the club.
It is GFH’s original purchase of the club in 2012 that allegedly involved Iranian money, sources say. GFH bought Leeds from Ken Bates in December 2012 via a Dubai-based subsidiary GFH Capital and insiders say they were so strapped for cash to complete the deal, they suspect money was temporarily borrowed from another company it co-owned, the Injazat Technology Fund, to get the buyout across the line.
The Injazat Technology Fund is co-owned by an investment vehicle in turn owned by the Iranian Government, who, under UNSC sanctions, have been prohibited from various aspects of international trading in an attempt to stop Iran developing a nuclear weapons programme. There is no suggestion Bates knew any money from GFH was ultimately owned by any party other than GFH or has done anything wrong.
The UNSC have yet to respond to Sportsmail about enquiries on the subject. Senior GFH officials in Bahrain and Dubai, as well as two spokesmen for the firm, have also failed to answer any questions.
The Football League will not comment on any private transaction in a takeover. In laymen’s terms, the League cannot be certain and they do not even necessarily have the remit to discover how money is sourced for a club takeover.
The League’s chief executive, Shaun Harvey, finds himself in a particularly uncomfortable position. He was the Leeds CEO when GFH bought the club. He is understood to have had no knowledge of any potential contravention, alleged or otherwise, of rules during the time he worked under GFH. He left the club in 2013.
Sources believe GFH ‘borrowed’ the Injazat money to make up a shortfall needed to pay Bates for his stake in Leeds and later put money back into Injazat’s account.
Yet GFH’s ownership of Leeds turned out to be an unmitigated failure, as promised funds failed to materialise. The club haemorrhaged money under their ownership, and GFH eventually sold 75 per cent of Leeds earlier this year to convicted fraudster Cellino. No other prospective buyer aside from the maverick Italian millionaire was willing to meet the £35million price tag GFH wanted.
Cellino was initially prevented from completing his own takeover after the League ruled he was not a ‘fit and proper person’, following a tax evasion conviction relating to a yacht.
He won an appeal on that decision, pending the release of a detailed judgment which should clarify whether he had been guilty of a crime of dishonesty, or not.
If the full verdict says he is dishonest, the League will attempt to force him to sell Leeds. The League’s problem is that they have no right to access the full verdict. Cellino’s Italian lawyer is the only person, aside from the court, with a full copy.
It has been reported that in the full tax case ruling, Sardinian judge Sandra Lepore said there was ‘elusive intent’ and ‘Machiavellian simulation’ by Cellino. The problem for the League is accessing the document. Lawyers for the League and Cellino have spoken in the past few days and the Leeds owner believes the League are considering some kind of misconduct charge for not giving it to them.
The charge, theoretically, would be that Cellino has failed to notify the League of a change in declarations about his ‘fit and proper’ status. Cellino’s lawyers would mount legal challenges to any charge.
The League declined to comment.