PL charge City for alleged breaches of financial rules

halfcenturyup said:
I think it's fair to say that, when any auditors are looking at the related party nature of transactions, one of the first things they will do is look at the accounts of the other party.

It would be very unusual for a relationship to be described as related by one party and not the other, so it's no real surprise that the accounts back themselves up.

If the PL is looking through the nature of City's ownership, though, to some sort of "state ownership" that would make a difference. I have no idea if they are doing that but I wouldn't be surprised (the stated justification for the APT rules being that City weren't properly reporting related parties, together with that same claim in the allegations, may support this). It's no more far-fetched than the allegation of a fraudulent conspiracy that they seem to be pursuing.

Maybe the Mohammed reference with the CPC is more to do with that, than with Etisalat, explaining why it has been raised recently?

In a way, it may not be bad for the club if they are trying that, as it will finally clear all this sort of stuff up after 15 years.

Hopefully :)

Btw, I always wondered what caused the change in ownership halfway through the investigation from ADUG to Newton. I suppose it could have been to clarify (or confuse) ownership .....
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It hard to see on what basis the PL IC is able to undermine the established position of ownership and reciprocal accounting treatments by, potentially say 3 of the Big 4 (depending on who, for example, audits Etihad). As you say the other accounts should match. The allegation on related party is far simpler to my mind (if made) - ie that Etihad and Etisalat are related to City and that everyone has got all the accounting wrong. But as we can see, this means it is all wrong in each of these partners, which seems unlikely to me especially as they all have different auditors.

I don't think "state ownership" comes into it and is legally not the case anyway given we know full well who the registered shareholders are. That is unless you are saying the PL IC is going to say all of that is a lie. But the idea that the PL IC is going to say that MCFC is, like Etihad, actually beneficially owned by the Government of Abu Dhabi and everyone who has said it wasn't has lied for 15 years, is surely, fanciful. It would have already caused a diplomatic meltdown just to allege it. FYI Etihad states that its beneficial owner is The AD Government.

I also do not agree CPC changes anything either way.

I may have misunderstood. And I don't understand why we need anything "cleared" up. Unless it is a lie.

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halfcenturyup said:
It's straight-forward as long as the PL is accepting the substance of the ownership structure.
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You mean unless the PL can prove a different ownership structure and that different owner being The Abu Dhabi Government - just moving MCFC to, say, CPC takes them no further in proving their case.

And in any event, in such a scenario why is the club the offending party in that scenario - their shareholders will have been found to have lied to the corporate entity about the beneficial ownership.

That really is very very unlikely to happen and I can't see that they were trying that.

None of this is going to happen but the argument doesn't work.
 
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slbsn said:
Whilst I’ve never been convinced the related party aspect of sponsors was the key element of the 115 charges, I hadn’t previously looked at Abu Dhabi sponsors’ accounts. We can look at Etisalat’s and Aldar’s as both are listed. Aldar since 2011.

Etisalat are audited by E&Y. Aldar by Deloitte. Neither of those firms audit CFG or MCFC.

No City entity is a related party under IFRS according to their accounts. So that’s at least 3 different auditors (also possible/probable that Etihad have another auditor and I’d guess Etihad also don’t declare CFG as related) who don’t assess CFG and these sponsors to be related.

Looks very challenging against that backdrop for the PL to prove all of those professional firms wrong on this point of detail.

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I’m pretty sure Etihad are audited by Grant Thornton.
 
slbsn said:
You mean unless the PL can prove a different ownership structure and that different owner being The Abu Dhabi Government - just moving MCFC to, say, CPC takes them no further in proving their case.

And in any event, in such a scenario why is the club is not the offending party - their shareholders will have been found to have lied to the corporate entity about the beneficial ownership.

That really is very very unlikely to happen and I can't see that they were trying that.

None of this is going to happen but the argument doesn't work.
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@slbsn - you’re sounding a bit more hopeful about the charges???
 
slbsn said:
Whilst I’ve never been convinced the related party aspect of sponsors was the key element of the 115 charges, I hadn’t previously looked at Abu Dhabi sponsors’ accounts. We can look at Etisalat’s and Aldar’s as both are listed. Aldar since 2011.

Etisalat are audited by E&Y. Aldar by Deloitte. Neither of those firms audit CFG or MCFC.

No City entity is a related party under IFRS according to their accounts. So that’s at least 3 different auditors (also possible/probable that Etihad have another auditor and I’d guess Etihad also don’t declare CFG as related) who don’t assess CFG and these sponsors to be related.

Looks very challenging against that backdrop for the PL to prove all of those professional firms wrong on this point of detail.

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Great post.

I'd just say that the related party issue is not THE key issue but it is one of them, as it's one of the recurring themes from the 2014 settlement, the 2018 charges & CAS, the introduction of the APT rules and there is specific mention of them in the first group of the PL charges. One of the reasons it's key, in my opinion, is that if we were forced to declare them as related parties then we'd also have to declare the value of the contracts.

Your illustration that the companies who our enemies believe should be related parties are audited by different firms, none of whom believe City is a related party, is a very powerful one. It's just a shame that your pals at PWC aren't one of those companies, as they were acting for UEFA in 2014, and their opinion was that Etihad et al were related parties. KPMG are Etihad's auditors I believe, and they also aren't connected to City (although they used to be).

So that's 3 of the 'Big Four', plus BDO, who don't believe that Etihad, Etisalat and Aldar are related parties. The evidence is so compelling that you wonder why the hearing lasted as long as it did.

One other thing I'd point out on the back of this is that some of us believe this case is 'politically motivated' and more designed to hurt our reputation, with any substantive result being a bonus. You've been consistent in your opinion that this isn't the case, and that the PL is acting fairly and even-handedly.

The fact you've demonstrated yourself, that there is little basis for the charges relating to the misreporting of related parties
 
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Prestwich_Blue said:
Great post.

I'd just say that the related party issue is not THE key issue but it is one of them, as it's one of the recurring themes from the 2014 settlement, the 2018 charges & CAS, the introduction of the APT rules and there is specific mention of them in the first group of the PL charges. One of the reasons it's key, in my opinion, is that if we were forced to declare them as related parties then we'd also have to declare the value of the contracts.

Your illustration that the companies who our enemies believe should be related parties are audited by different firms, none of whom believe City is a related party, is a very powerful one. It's just a shame that your pals at PWC aren't one of those companies, as they were acting for UEFA in 2014, and their opinion was that Etihad et al were related parties. KPMG are Etihad's auditors I believe, and they also aren't connected to City (although they used to be).

So that's 3 of the 'Big Four', plus BDO, who don't believe that Etihad, Etisalat and Aldar are related parties. The evidence is so compelling that you wonder why the hearing lasted as long as it did.

One other thing I'd point out on the back of this is that some of us believe this case is 'politically motivated' and more designed to hurt our reputation, with any substantive result being a bonus. You've been consistent in your opinion that this isn't the case, and that the PL is acting fairly and even-handedly.

The fact you've demonstrated yourself, that there is little basis for the charges relating to the misreporting of related parties
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But much of this would be true and consistent if RP was only a minor part of the case (as I suspect) with bigger allegations and detailed witness evidence as to what happened when.

We all know RP was *some* part of the charges because we can all see it in the charges.

Point of detail: RP was not in play at CAS. It was not suggested by UEFA that they were RPs.
 
Prestwich_Blue said:
Great post.

I'd just say that the related party issue is not THE key issue but it is one of them, as it's one of the recurring themes from the 2014 settlement, the 2018 charges & CAS, the introduction of the APT rules and there is specific mention of them in the first group of the PL charges. One of the reasons it's key, in my opinion, is that if we were forced to declare them as related parties then we'd also have to declare the value of the contracts.

Your illustration that the companies who our enemies believe should be related parties are audited by different firms, none of whom believe City is a related party, is a very powerful one. It's just a shame that your pals at PWC aren't one of those companies, as they were acting for UEFA in 2014, and their opinion was that Etihad et al were related parties. KPMG are Etihad's auditors I believe, and they also aren't connected to City (although they used to be).

So that's 3 of the 'Big Four', plus BDO, who don't believe that Etihad, Etisalat and Aldar are related parties. The evidence is so compelling that you wonder why the hearing lasted as long as it did.

One other thing I'd point out on the back of this is that some of us believe this case is 'politically motivated' and more designed to hurt our reputation, with any substantive result being a bonus. You've been consistent in your opinion that this isn't the case, and that the PL is acting fairly and even-handedly.

The fact you've demonstrated yourself, that there is little basis for the charges relating to the misreporting of related parties
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City think it’s politically motivated.
 
cheekybids said:
City think it’s politically motivated.
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Just be clear PB has overly simplified my view on this point.

Of course the driver of the *commencement* of the investigation was political. Aspects of the decision to pursue will also have had political aspects. But likewise it is hard to argue that there is simply no possible case to answer. I trust that in the process itself, the PLs lawyers have acted within their rights and fairly. If not, I expect we will see that in the decision.
 
slbsn said:
Just be clear PB has overly simplified my view on this point.

Of course the driver of the *commencement* of the investigation was political. Aspects of the decision to pursue will also have had political aspects. But likewise it is hard to argue that there is simply no possible case to answer. I trust that in the process itself, the PLs lawyers have acted within their rights and fairly. If not, I expect we will see that in the decision.
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If it wasn’t politically motivated there would have been no evidence or appetite for the investigation to proceed.
 
slbsn said:
But much of this would be true and consistent if RP was only a minor part of the case (as I suspect) with bigger allegations and detailed witness evidence as to what happened when.

We all know RP was *some* part of the charges because we can all see it in the charges.

Point of detail: RP was not in play at CAS. It was not suggested by UEFA that they were RPs.
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It was in play at CAS. It was explicitly mentioned in the verdict that City may be guilty of misreporting if they hadn't declared sponsors as related parties (but the panel obviously didn't rule on whether that was in fact the case or not).

My view is that this encouraged our detractors to pursue this specific avenue.

Edit: It was covered from paragraph 126 to 135. The reference in my first paragraph was in paragraph 127.
 
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