PL charge City for alleged breaches of financial rules

[halfcenturyup]

It could be fraud if we sold off shares at prices that were inflated by heightened revenue and profits due to owner investment/equity funding being disguised tbf. Not sure what dog the PL have in that fight though.

There is no issue with fair values afaik, though.

 

[WRicko]

No problem over the use of the phrase or anything else. :)

Just to respond quickly to this last point while I'm between meetings: I actually appreciate the point that the charges are somewhat ridiculous in the light of our having received only a fair value sponsorship as the result of all this. Ask any of our detractors, and they'll suggest that the Etihad deal was ridiculously overvalued and Mansour pumped in the excess, but that wasn't the case. Any meaningful benefit from the alleged arrangement accrued to Etihad by way of paying an annual GBP 8 million for a sponsorship whose fair value, according to UEFA's experts, was anywhere between GBP 40 million and GBP 77 million.

City actually ran the argument before the Panel that they should reject the charges because the argument that we'd enter into an arrangement to receive GBP 8 million p.a. for the above sponsorship was commercially irrational. The Panel rejected that, saying in numbered paras 133 and 134 on page 42 that the rationale for MCFC would have been as follows:



I find that incredibly tenuous. To be fari, I suppose they did have the grace to suggest twice that it was more a theoretical than a practical argument.

Anyway, in response to your question about what I'd advise if I were a lawyer acting for the PL, it would really depend on the evidence. If they actually have no more than UEFA put before the CAS, then I'd tell them that they really had no serious basis to be bringing charges of this nature. If they'd gathered more vidence in the long period that they'd been investigating, then maybe it'd be more reasonable to advise them to charge us, but it really depends on what the evodence is.

One thing I'd note is that, as a lawyer, you quite often find yourself telling people that you don't think a particular course of action is prudent, but they don't always listen. Here, it strikes me that the PL - whether with the encouragement of their legal advisers or otherwise - might possibly have two aims in bringing a case based on alleged conduct that would, if true, constitute a criminal offence;

The first is that the PL might want to throw enough shit that the Panel infers dubious conduct on our part and thus feels obliged to nail us for something even if the main charges aren't proven. I suspected that the CAS's GBP 10 million for non-cooperation fell into this category.

The second is that the PL might want to placate key stakeholders who are frothing at the mouth for City to be prosecuted. They therefore might be inclined to bring extremely serious charges whether or not the evidence justifies doing so.

Obviously, the above is speculative. It's just my conjecture aimed at showing how occasionally in such a situation a decision may be taken regarding how to proceed even if it's not one that the lawyers are particularly keen on.

Hope this makes some kind of sense. It's a bit rushed and I haven't proofread it.

Why only 8 million ?

 

[halfcenturyup]

Why only 8 million ?

This isn't controversial so I will give it a go.

One of the DS emails suggested that only 8 million came from Etihad's marketing budget and the rest from "other sources" with the help of HH. City showed that the other monies came from Etihad but from a central fund budget and that the HH referred to wasn't Mansour, but the Emir, as was common, reverential practice. In any case the club showed that no money transfers between ADUG and Etihad took place and there were several witnesses confirming all this.

Edit: I think :)

 

[Chris in London]

Mmuuuuuuh... mmuhh..... (to self) must keep lips closed.

Well you did manage half an hour

 

[KS55]

SM could just call it a soft loan to Etihad. Seems to be ok direct from Roman to Chelsea so can't see what they'd do us for.

Imagine if SM turns up with Pannick at the hearing and denies everything, the PL would shit themselves.

Seriously I'd doubt we'd be so unprofessional to fuck up enough to be guilty of anything serious.

In that case you would need to account for it as a loan. This is about sponsorship.

 

[halfcenturyup]

Well you did manage half an hour

Just a slip, your honour :)

 

[KS55]

Might be a bit pedantic but the PL (or UEFA) have some jurisdiction over City but they have none whatsoever over Etihad Airways. Just supposing SM did decide to purchase £50m of equity (through one of his investment vehicles unrelated to CFG) in Etihad Airways each year - a totally above board purchase of equity - how can the FA or UEFA challenge that? It’s a legitimate business investment. It could bring into play an issue of a related party but that could only mean a ‘fair value’ test. I think at UEFA and at the PL there’s a bunch of shisters so intent on nailing us they are in danger of losing their perspective and thinking that they can bully Etihad and other sponsors when in reality they absolutely cannot.

More red herrings.

 

[KS55]

I'm not clever at all this stuff but regarding the potential take-over at the swamp their followers and the media are getting giddy about them having billions to spend on players and infrastructure so surely that equates to an individual or group bank-rolling them by nook or by crook???

Rags can get as giddy as they like, but would be subject to PL/UEFA rules. Where the millions would help would be in rebuilding the swamp while leaving other income free for team building.

 

[WRicko]

This isn't controversial so I will give it a go.

One of the DS emails suggested that only 8 million came from Etihad's marketing budget and the rest from "other sources" with the help of HH. City showed that the other monies came from Etihad but from a central fund budget and that the HH referred to wasn't Mansour, but the Emir, as was common, reverential practice. In any case the club showed that no money transfers between ADUG and Etihad took place and there were several witnesses confirming all this.

Edit: I think :)

Right but the full value of Etihad / other stuff related to that sponsorship would have to go in the accounts and I assume we would have to declare the split as such and fair value test applied on the whole amount. It would pass fair value but we would be done for not declaring it

 

[KS55]

Mr N.Harris and a Mr J.Klopp. No idea of first names.

I was thinking more Ratboy and Jordan.