PL charge City for alleged breaches of financial rules

WRicko said:
Would we not be in a good position over related party I mean there is an accepted definition in accounting terms. We have no related party deals in the accounts right ?

If new evidence comes to light about the sponsorships that makes people think they are related would that be considered false accounting and also would any of this be bad faith etc

Not sure when it started to diverge for FFP and if that’s covered in the charges
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The PL would have to prove that the two parties were related on the balance of probabilities. That wouldn't be easy in the first place, but what is the effect if they can prove it?

There is no legal requirement for the accounts to show related party transactions at fmv, so it would make no difference to the main accounting statements. There is a requirement for a note disclosure, though, so readers of the accounts can make their own minds up. No-one is getting a points deduction or going to jail for a disputed note disclosure.

The PL rules, though, do allow the PL to restate related party income to fmv and so the later inclusion of a related party transaction disclosure may lead to a correction to the club's FFP results.

I still think this is maybe what the PL is looking at, although others disagree. I think Herbert's "understanding" and the shift (if it's not nonsense) from fraud to complexity supports that.

I think that is all right, but it's just my opinion and may all be bollocks, of course.
 
Long-term financial contracts ARE complex.

This is why accountants and auditors are well paid.

You wouldn't expect an online football salesman like Herbert to understand them.
 
give it to gordon said:
just because they are published doesnt mean their isnt anything dodge ! Arent Citys account published ? City are accused of fraud
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Your question was whether the PL has access to them. So yes. Fraud is possible in those accounts but given the US NYSE exposure that would be a really crazy move from United execs. But yes similarly unlikely as at City.
 
halfcenturyup said:
The PL would have to prove that the two parties were related on the balance of probabilities. That wouldn't be easy in the first place, but what is the effect if they can prove it?

There is no legal requirement for the accounts to show related party transactions at fmv, so it would make no difference to the main accounting statements. There is a requirement for a note disclosure, though, so readers of the accounts can make their own minds up. No-one is getting a points deduction or going to jail for a disputed note disclosure.

The PL rules, though, do allow the PL to restate related party income to fmv and so the later inclusion of a related party transaction disclosure may lead to a correction to the club's FFP results.

I still think this is maybe what the PL is looking at, although others disagree. I think Herbert's "understanding" and the shift (if it's not nonsense) from fraud to complexity supports that.

I think that is all right, but it's just my opinion and may all be bollocks, of course.
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There is nothing in Herbert’s article to support this. You may be right re related party designation (as you know I think it is very unlikely to be the key charge) but you really can’t read that from Herbert’s few words
 
Bluewonder said:
Long-term financial contracts ARE complex.

This is why accountants and auditors are well paid.

You wouldn't expect an online football salesman like Herbert to understand them.
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To be fair to Herbert, the APT tribunal did refer to the 2023 Etihad renewal as "as complicated on its own as all the contracts most clubs would close on all their sponsorships in a year" (paraphrasing) and mentioned, as an example, the 90 page inventory. I suppose it is likely the same is true of previous renewals.

But again, I think it's the change in narrative he has been given from filing fraudulent accounts (which is, of course, against the rules) to complexity (which isn't, of course) is interesting.
 
slbsn said:
There is nothing in Herbert’s article to support this. You may be right re related party designation (as you know I think it is very unlikely to be the key charge) but you really can’t read that from Herbert’s few words
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I was just answering a question about the effect if the PL succeeded in changing the nature of the Etihad transaction, for example, to an RPT.

But yes, it's all speculation. No-one knows anything. You do agree, though, that the fact he has this "understanding" suddenly and chooses to share it is interesting?

Edit: And just to be clear, I never said RPTs and FMVs are the key allegations, the key (most serious) allegations are presumably the funding of the sponsorships and its effect on the accounts. I do think it's likely they have been included in the PL's Statement of Facts, though. It's fine if you don't share that view.
 
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halfcenturyup said:
I was just answering a question about the effect if the PL succeeded in changing the nature of the Etihad transaction, for example, to an RPT.

But yes, it's all speculation. No-one knows anything. You do agree, though, that the fact he has this "understanding" suddenly and chooses to share it is interesting?
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If he gets his understanding from MagicHat?
 
give it to gordon said:
So the question why do the clubs that get screwed over do nothing ? Theres only 4 clubs that stand up to the pl. I would guess the others are breaking the rules somewhere along the way so support the cartel for their own protection.

I cant see why the IC cant say until all clubs are investigated to Citys level the case is null n void !!
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You have to have good grounds to launch an investigation, is my understanding. Unless there's another Der Spiegel-type article about the financial dealings of another club, there are no grounds.

Having said that though, any club whose owners' accounts are filed in a tax haven should definitely be investigated. Any responsible regulator would want to know about any debt not declared via publicly filed accounts, in order to ensure that the club was at no risk should something happen.
 
halfcenturyup said:
The PL would have to prove that the two parties were related on the balance of probabilities. That wouldn't be easy in the first place, but what is the effect if they can prove it?

There is no legal requirement for the accounts to show related party transactions at fmv, so it would make no difference to the main accounting statements. There is a requirement for a note disclosure, though, so readers of the accounts can make their own minds up. No-one is getting a points deduction or going to jail for a disputed note disclosure.

The PL rules, though, do allow the PL to restate related party income to fmv and so the later inclusion of a related party transaction disclosure may lead to a correction to the club's FFP results.

I still think this is maybe what the PL is looking at, although others disagree. I think Herbert's "understanding" and the shift (if it's not nonsense) from fraud to complexity supports that.

I think that is all right, but it's just my opinion and may all be bollocks, of course.
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And could the accounts potentially be deemed false if and a lot of ifs here so maybe I am over doing it and being overly worried. I am not really too worried more seeing if I can be less worried if that makes sense.

Any what I was going to say if they can be disputed as related party and then potentially marked down in value potentially significantly then could the accounts be deemed false ?

Also it strikes me as problematic for the panel they are presumably set up in a way that takes evidence and forms opinions on trustworthiness of witness etc if the focus has been on are such and such telling the truth and is this or that related etc and what happened with x y or z money etc.

If they then decide that x is actually related would it not need another panel or another hearing and some outside companies to value the deals and determine fair market value ?
 
WRicko said:
And could the accounts potentially be deemed false if and a lot of ifs here so maybe I am over doing it and being overly worried. I am not really too worried more seeing if I can be less worried if that makes sense.

Any what I was going to say if they can be disputed as related party and then potentially marked down in value potentially significantly then could the accounts be deemed false ?

Also it strikes me as problematic for the panel they are presumably set up in a way that takes evidence and forms opinions on trustworthiness of witness etc if the focus has been on are such and such telling the truth and is this or that related etc and what happened with x y or z money etc.

If they then decide that x is actually related would it not need another panel or another hearing and some outside companies to value the deals and determine fair market value ?
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:) I am going to get in trouble again discussing your hypotheticals, but no. Again, there is no requirement for RPTs to be at FMV in the main accounting statements, only that they are disclosed with some detail. As I said, no-one is going to say the accounts are false because of a missing note disclosure.

For the rest I don't really care because I don't think it will happen.
 
petrusha said:
Nor does it mean that, as he seems to suggest, there must therefore be something wrong with them. Obviously, as we've done to death on here, if they're set up with a view to creating a fraudulent disguise for shareholder investment by portraying it as sponsorship income, then THAT would constitute (among other things) rule breaches along the lines of the accusations against City.

Otherwise, the arrangements presumably amount, in the final analysis, to: individuals at City with connections to the Abu Dhabi royals or government apparatus allowing AD publicly owned sponsors preferential payment delays by making funds available to MCFC pending reimbursement; AD public body shareholders of such companies providing the latter with funding to meet the sponsorships obligations; or a combination of the above.

OK, fine, but how does this constitute, as the ‘charge’ references, a failure to provide "in the utmost good faith ... accurate financial information that gives a true and fair view of the club’s financial position, in particular with respect to its revenue (including sponsorship revenue), its related parties and its operating costs". Maybe there's an argument it does, and the PL obviously thinks so. It's far from evident based on the information in the public domain, though, and the explanations in the preceding paragraph are IMO prima facie far more persuasive.

As pithily stated in the post I've quoted, this field isn't an area of strength for Herbert, a lamentable illiterate in serious legal and financial matters He proclaims himself a friend as well as a former colleague of Nick Harris, on whose judgement here he's in all probability relying. Yet while Harris is more knowledgeable than Herbert on these issues, the former’s proficiency is still grievously deficient itself and, moreover, is tainted by a stench rather than a whiff of manifest bias.

There are all kinds of issues potentially at play here, none of which either Herbert or even Harris is even close to capable of analysing in competent or credible fashion (as opposed to Nick’s detailed but myopic rehashes of the ‘prosecution’ case). I could speculate what the issues at hand might possibly be, but I'm really not sure that it serves any purpose. Nonetheless, in this monster of a thread they've all had an airing at some point anyway.

That said, unless City have been improbably and monumentally stupid in the drawing up and execution of the arrangements, I'd contend that they're really not especially likely to be the subject matter of the kind of fraud or deliberate concealment that would allow the statutory time-bar to be lifted for issues before season 2016/17. And it's hard to see how the accounts didn't give a "true and fair" view thereafter.

The latter argument seems to me to apply even if one accepts the wholly contentious premise that AD sponsors should have been declared as "related parties", at least as long as the fees under the relevant contracts were broadly at market value. No doubt our accounting brethren will pull me up on this one if I have it wrong.

TL, DR. Another year, another vacuous, cheerleading piece of simplistic clickbait bullshit from Herbert, coming close to straying over the border with outright mendacity if it doesn't actually do so. No surprises there. Still, I have to give the guy credit for one thing, namely his sheer chutzpah in being that grotesquely ugly yet being prepared even so to appear in public without a bag over his head. He has looks and intellectual ability on the same level.
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WRicko said:
And could the accounts potentially be deemed false if and a lot of ifs here so maybe I am over doing it and being overly worried. I am not really too worried more seeing if I can be less worried if that makes sense.

Any what I was going to say if they can be disputed as related party and then potentially marked down in value potentially significantly then could the accounts be deemed false ?

Also it strikes me as problematic for the panel they are presumably set up in a way that takes evidence and forms opinions on trustworthiness of witness etc if the focus has been on are such and such telling the truth and is this or that related etc and what happened with x y or z money etc.

If they then decide that x is actually related would it not need another panel or another hearing and some outside companies to value the deals and determine fair market value ?
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This issue of whether Etihad, Etisalat or any other Abu Dhabi company is a related party is a complete red herring.

The accounts aren't rendered fraudulent or misleading if they are deemed to be, and we didn't declare them as such. The definition of an RP is partly subjective but there's no obvious way that Etihad and Sheikh Mansour are related parties. Etihad and City definitely aren't.

The red cartel have got their knickers in a twist over this, and I suspect that's at least partly due to them wanting to see the value of the Etihad sponsorship (assuming we'd have to declare that if it was an RPT).

FFP allows investment, including via commercial sponsorships, from owners and other related parties, as long as these are deemed to be at FMV. PSR doesn't say anything about this. CAS said that (at the time of that hearing) that Etihad was FMV and not disguised equity funding. As long as that's the case, the issue of whether it's an RPT is irrelevant.
 
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halfcenturyup said:
I was just answering a question about the effect if the PL succeeded in changing the nature of the Etihad transaction, for example, to an RPT.

But yes, it's all speculation. No-one knows anything. You do agree, though, that the fact he has this "understanding" suddenly and chooses to share it is interesting?

Edit: And just to be clear, I never said RPTs and FMVs are the key allegations, the key (most serious) allegations are presumably the funding of the sponsorships and its effect on the accounts. I do think it's likely they have been included in the PL's Statement of Facts, though. It's fine if you don't share that view.
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I tend to think there is a good chance Herbert’s piece is based on the most throwaway of comment that someone heard third hand via a Chinese whisper.

PS I don’t know what you mean re the PLs Statement of Fact. There may be areas of Common Ground but the related party position
in fact is that Etihad and Etisalat are not RPs so it could not included in any statement of fact except City’s. If you are right it is an issue not common ground.
 
petrusha said:
Nor does it mean that, as he seems to suggest, there must therefore be something wrong with them. Obviously, as we've done to death on here, if they're set up with a view to creating a fraudulent disguise for shareholder investment by portraying it as sponsorship income, then THAT would constitute (among other things) rule breaches along the lines of the accusations against City.

Otherwise, the arrangements presumably amount, in the final analysis, to: individuals at City with connections to the Abu Dhabi royals or government apparatus allowing AD publicly owned sponsors preferential payment delays by making funds available to MCFC pending reimbursement; AD public body shareholders of such companies providing the latter with funding to meet the sponsorships obligations; or a combination of the above.

OK, fine, but how does this constitute, as the ‘charge’ references, a failure to provide "in the utmost good faith ... accurate financial information that gives a true and fair view of the club’s financial position, in particular with respect to its revenue (including sponsorship revenue), its related parties and its operating costs". Maybe there's an argument it does, and the PL obviously thinks so. It's far from evident based on the information in the public domain, though, and the explanations in the preceding paragraph are IMO prima facie far more persuasive.

As pithily stated in the post I've quoted, this field isn't an area of strength for Herbert, a lamentable illiterate in serious legal and financial matters He proclaims himself a friend as well as a former colleague of Nick Harris, on whose judgement here he's in all probability relying. Yet while Harris is more knowledgeable than Herbert on these issues, the former’s proficiency is still grievously deficient itself and, moreover, is tainted by a stench rather than a whiff of manifest bias.

There are all kinds of issues potentially at play here, none of which either Herbert or even Harris is even close to capable of analysing in competent or credible fashion (as opposed to Nick’s detailed but myopic rehashes of the ‘prosecution’ case). I could speculate what the issues at hand might possibly be, but I'm really not sure that it serves any purpose. Nonetheless, in this monster of a thread they've all had an airing at some point anyway.

That said, unless City have been improbably and monumentally stupid in the drawing up and execution of the arrangements, I'd contend that they're really not especially likely to be the subject matter of the kind of fraud or deliberate concealment that would allow the statutory time-bar to be lifted for issues before season 2016/17. And it's hard to see how the accounts didn't give a "true and fair" view thereafter.

The latter argument seems to me to apply even if one accepts the wholly contentious premise that AD sponsors should have been declared as "related parties", at least as long as the fees under the relevant contracts were broadly at market value. No doubt our accounting brethren will pull me up on this one if I have it wrong.

TL, DR. Another year, another vacuous, cheerleading piece of simplistic clickbait bullshit from Herbert, coming close to straying over the border with outright mendacity if it doesn't actually do so. No surprises there. Still, I have to give the guy credit for one thing, namely his sheer chutzpah in being that grotesquely ugly yet being prepared even so to appear in public without a bag over his head. He has looks and intellectual ability on the same level.
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A magnificent post to kick off 2025! Happy New Year to you, Sir!
 
Prestwich_Blue said:
You have to have good grounds to launch an investigation, is my understanding. Unless there's another Der Spiegel-type article about the financial dealings of another club, there are no grounds.

Having said that though, any club whose owners' accounts are filed in a tax haven should definitely be investigated. Any responsible regulator would want to know about any debt not declared via publicly filed accounts, in order to ensure that the club was at no risk should something happen.
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Why on earth are some clubs allowed to file in a tax haven?!! If they belong to an English PL that seems to have its own rules (legal or not) then all accounts should be filed here
 
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