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    Fit & Proper persons. Chester decision (long)

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    Rickd
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    Fit & Proper persons. Chester decision (long)

    Post by Rickd on Thu Nov 19, 2009 7:01 am

    http://www.guardian.co.uk/football/david-conn-inside-sport-blog/2009/nov/18/chester-city-fit-proper-person-test

    Chester City owner told by FA to surrender his majority shares

    Chester City's Stephen Vaughan has become the first major scalp of the fit
    and proper person test
    Chester City, losing £600,000 per year, are facing expulsion from the
    Conference over unpaid debts. Chester City supporters are hoping that a
    torrid period for their club can be brought to an end and a new beginning
    embarked upon by the requirement that Stephen Vaughan, the owner since 2001,
    must reduce his majority stake after admitting a £500,000 "carousel" VAT
    fraud and being disqualified as a company director for 11 years.
    Vaughan, a Liverpool businessman whose in charge of City, and the
    Conference club Barrow before them, was marked by early success then
    insolvency and controversy, will become the first majority owner of any
    professional football club declared not "a fit and proper" person while
    still in charge.
    The FA's "fit and proper person test", which applies to Conference clubs,
    states that anybody who has been disqualified as a company director cannot
    hold 30% or more of a club's shares, and Vaughan will be required to reduce
    his shareholding within 21 days of the disqualification order taking effect
    on 25 November.
    In a statement, the FA said: "We are aware of the Insolvency Service
    decision and will be taking necessary steps under the requirements of the
    fit and proper person test."
    On the face of it, this will bring to an end Vaughan's eight turbulent years
    at City, although he is likely to transfer the shares to one of his sons,
    according to the club's managing director, Bob Gray. If that happens, the FA
    will have to be satisfied that Vaughan senior no longer exercises "direct or
    indirect control" over the club's affairs as stipulated by the rules.
    Ever since he first bought Barrow, then in the UniBond League, in February
    1995 and began to put money in, Vaughan has been one of lower-league
    football's more controversial figures. While at Barrow, Vaughan declared
    publicly that he had been arrested by HM Revenue and Customs as part of an
    investigation into Curtis Warren, the Liverpool drug dealer who had been
    sentenced to 12 years' imprisonment in the Netherlands for trafficking
    hashish, heroin, cocaine and ecstasy.
    Vaughan, then a boxing promoter, wrote to the magazine Boxing News saying:
    "The allegations centre on the laundering of millions of pounds of supposed
    drug money."
    The investigation is understood to have turned to Barrow partly because of
    an incident related in Warren's biography, Cocky (Milo Books, £14.99), in
    which Warren, before his arrest, was said to have been flown round the
    north-west in a helicopter, pointed down to Barrow FC, and said to the
    pilot: "I own that."
    Vaughan always said that was untrue, "categorically and strenuously" denied
    any involvement in money laundering and was never prosecuted for any offence
    arising out of the Warren investigation. However, he always remained loyal
    to Warren, who was a childhood friend, and publicly acknowledged that he
    knew him.
    As at Chester, Vaughan put significant money into Barrow in the early years,
    and in May 1998 the club won promotion to the Conference. But he then pulled
    out financially and in January 1999 Barrow were plunged into a traumatic
    liquidation, before they were rescued by a consortium of local businessmen.
    Vaughan took over at Chester in October 2001, when City, owned by an
    American, Terry Smith, had been relegated out of the Football League for the
    first time since their election to the Third Division (North) 70 years
    earlier.
    Vaughan's investment, which Gray puts in the millions, saw City promoted
    back to the Football League in 2004 under the management of Mark Wright, and
    comparative good times trickling back, although intrigue was never a
    stranger at the Deva Stadium. In November 2007, the fans were asked to
    honour a minute's silence for a man, Colin Smith, described as a friend of
    Vaughan's and a benefactor to the club. Supporters bewildered about Smith's
    identity would soon read he was a major Liverpool cocaine dealer - although
    he was never actually convicted of any drug-related offences - who had been
    killed the previous month in a shooting widely described and reported as a
    gang execution.
    Gray, asked about this yesterday, said Smith had been well-known at City and
    his son played in the junior section, but he had "never put a penny" into
    the club.
    "We knew him as a lovely and very friendly man," Gray explained. "We didn't
    know what he did outside the football club; that didn't come into it. The
    minute's silence was to sympathise with and honour his family."
    Vaughan, Gray said, has been: "A very generous owner, probably too
    generous," but last season City ran into financial problems, were relegated
    and in May collapsed into administration with declared debts of £8m. Of
    that, £1.8m was stated by the administrator to be owed to Vaughan
    personally, and £2.2m to Vaughan's company, Cestrian Group.
    HMRC, owed £983,000 in unpaid tax and VAT, challenged the agreed Company
    Voluntary Arrangement (CVA), which had seen Vaughan take charge again. The
    tax authority severely disapproves of football's insolvency rules, which
    insist that "football creditors" - other clubs and players - must be paid in
    full, but other debts can remain unpaid. In July, His Honour Judge Pelling
    QC ruled in the high court that the CVA should indeed be cancelled because
    of a "material irregularity" in Cestrian Group's £2.2m claim, which he
    ordered be reduced to £590,089.
    After that, Vaughan bought the club from the administrator again, this time
    without a CVA being agreed or its debts paid in full as required by
    Conference rules. The Conference imposed a 25-point deduction, 10 for the
    club being insolvent, 15 for the failure to agree a CVA, but the FA still
    fined the league itself £5,000 for accepting City, a breach of the league's
    own rules.
    On the field, City have accumulated 21 points which, without the deduction,
    would place them in the relatively safe place of 17th in the table, but they
    remain rooted to the bottom on -4.
    Budgeting to lose more than £600,000 this year with a wage bill including
    several players on about £1,000 a week, City have fallen behind with their
    payments again, and have been threatened with expulsion from the Conference
    if they do not pay money owed to the Professional Footballers' Association,
    Wrexham and Vauxhall Motors, by 30 November.
    The club is seeking parachute payments from the Football League, which were
    withheld because of the administration, but the league board is taking
    advice about whether the money should be paid and if it is, whether to the
    old club company, which remains in administration, or Vaughan's new company.
    "We hope the Football League will pay us," Gray said, "but if they don't,
    we'll have to find it."
    Mike Poole, 39, a senior civil servant and chair of the campaigning group
    City Fans , lamented the club's plight: "Chester City were formed in
    1885, it is in our blood and part of the city's fabric like the Roman walls
    and cathedral. It is heartbreaking, as if 125 years of effort have come to
    this."
    Poole said he hoped the current management can pull the club round, but the
    fans are raising money in case they have to take it over themselves.
    "We want to help preserve professional football in Chester," he insisted.
    "The club is too important to lose."


    Last edited by Rickd on Sat Dec 05, 2009 5:25 am; edited 2 times in total (Reason for editing : change to the title following Leeds decision)
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    LUFC DAVE
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    Re: Fit & Proper persons. Chester decision (long)

    Post by LUFC DAVE on Thu Nov 19, 2009 7:15 am

    i like how its mentioned that chester city fc, is part of the fabric of city life, like the roman walls, absolute tosh, havent been properly supported by the city people in years,


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    Re: Fit & Proper persons. Chester decision (long)

    Post by Rickd on Fri Dec 04, 2009 11:26 pm

    According to David Conn in the Guardian today it looks as if Leeds are in the clear and that the FL fit and proper persons requirements have been met. A good birthday present for Mr Bates.

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    Re: Fit & Proper persons. Chester decision (long)

    Post by hooter66 on Sat Dec 05, 2009 3:24 am

    Good news for all of us I'd say, can't think any Leeds supporters would want anything to screw up current on field performance ?
    Conn will need some new material now I guess... Cool

    Our impressive manager seems happy with the support he is getting from Bates, that'll do me for now.

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    Re: Fit & Proper persons. Chester decision (long)

    Post by begbie on Sat Dec 05, 2009 4:25 am

    If the identity(s) of the owners of LUFC are to remain secret then what purpose has this investigation actually served. Question

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    Re: Fit & Proper persons. Chester decision (long)

    Post by Rickd on Sat Dec 05, 2009 4:29 am

    hooter66 wrote:Good news for all of us I'd say, can't think any supporters would want anything to screw up current on field performance ? ..................

    Surely that hardly needs to be said. Even the LLHB guys make it clear that they are 100% behind the team, no matter what, and no matter what their other preferences may be.

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    Re: Fit & Proper persons. Chester decision (long)

    Post by hooter66 on Sat Dec 05, 2009 4:40 am

    Rickd wrote:
    hooter66 wrote:Good news for all of us I'd say, can't think any supporters would want anything to screw up current on field performance ? ..................

    Surely that hardly needs to be said. Even the LLHB guys make it clear that they are 100% behind the team, no matter what, and no matter what their other preferences may be.

    No but had the FL not been happy to conclude this matter, it could have caused uncertainty or worse, so as I say, closure of the issue is surely not merely good news for Bates on his birthday, but for all who have the interests of Leeds United at heart.
    I think that does need to be said, as some folk seemed to greet the breaking of this story, and the prospect of any fallout it may have wrought, as good news. But then you know that.

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    Re: Fit & Proper persons. Chester decision (long)

    Post by Rickd on Sat Dec 05, 2009 4:50 am

    begbie wrote:If the identity(s) of the owners of LUFC are to remain secret then what purpose has this investigation actually served. Question

    The purpose has never been to publish the names of the owners of a football club - as far as the FL are concerned.
    The FL do not prevent the owners details from being known. They just believe that the data protection act currently prevents the FL themselves from publishing this data which is provided to them by a club. The club is free to make the information as public as it wants to (or not). Of course this may be a legal convenience because the clubs themselves have not voted for a policy of public declaration of ownership of clubs and this situation binds the hands of the FL management committee (quite rightly).

    The F&PPT is not static. It is a developing policy over , and its application is expected to become increasingly stringent as seasons pass. That depends upon votes (on policy) by the FL clubs as a whole.

    IMHO passing the F&PPT was not the central issue. It was whether or not the changed ownership information had been provided to the FL at the same time as clarification had been made to the courts. Many people do not seem to fully understand that the FL focuses primarily on those people who are in obvious control (of a club) passing the F&PPT. As the people in "obvious" control have not changed, that part of the test was unlikely to be a problem. There is a grey area between ownership and control and that is why questions needed to be asked when details of ownership were changed. Either the FL is satisfied that the owners of FSF shares are not in effective day to day control of the club or that each one of them has passed the F&PPT.


    Last edited by Rickd on Sat Dec 05, 2009 6:30 am; edited 3 times in total (Reason for editing : correcting typos and making clearer)

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    Re: Fit & Proper persons. Chester decision (long)

    Post by Rickd on Sat Dec 05, 2009 5:18 am

    hooter66 wrote:

    No but had the FL not been happy to conclude this matter, it could have caused uncertainty or worse, so as I say, closure of the issue is surely not merely good news for Bates on his birthday, but for all who have the interests of Leeds United at heart.
    I think that does need to be said, as some folk seemed to greet the breaking of this story, and the prospect of any fallout it may have wrought, as good news. But then you know that.

    I don't know of any Leeds fan who regarded any potential disruption of team performances as being anything other than a wholly negative potential repercussion. In fact I understand that it was the possibility of such performance disruptions which made people angry that this had been allowed to develop in the way it did. Really, it should never have happened at all and there is no excuse for it. You are quite right that it could have caused uncertainty or worse, and that is why it is unforgivable. It is not the first time though, but then, also, you know that.

    There was quite a lot of activity in making sure the issue of ownership did not impinge upon the issue of the TA buyback which it had the potential to do at first. Thankfully that was overcome even though it was all mystifyingly to fail at the last moment.

    We don't yet know the basis of how this has been settled or what in fact the central issues to be settled actually were. The FL made it clear that we were (at the time that it became an issue) a very long way from it turning into something that would cause serious ructions of the kind that you seem to have in mind. It was always a theoretical possibility but only a long way down the line (at least in the absence of deliberate intent).

    begbie
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    Re: Fit & Proper persons. Chester decision (long)

    Post by begbie on Sat Dec 05, 2009 7:09 am

    I am guilty of naivety and wishful thinking and wanting this process to flush out those in upper echeleons of power at ER.
    Disruption to on field events have been avoided and I agree that that is the one good thing to come out of this.

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