PL charge City for alleged breaches of financial rules

[ricky77]

Just to be clear, you are aware that we didn't pick 2 of them? Each picked 1 (UEFA went for their reliable fallback of Ulrich Hans(sp)). We did suggest that we would be happy with a named 3rd who had knowledge of the case I think and UEFA were fine with him, so not 'picking' him in reality.

Yes mate.

It’s just the uneducated fans of other clubs who genuinely believe we picked 2

 

[bobbyowenquiff]

I'm not being dramatic, a bad outcome simply starts the pile on.

Should City have been found guilty of committing financial fraud, it is only a matter of when HMRC and the Fraud Squad become involved.

These charges are accusing of exactly that. Our owner, executive board, sponsors and manager, all being complicit in it.

The PL handbook just opens the door. It's a very serious collection of allegations once someone tugs on the first string.

Agreed. There could be a criminal investigation not least because the political pressure would be huge in the current climate. Though I disagree with the phrase "found guilty" because any ruling by the panel is not part of a criminal case. If the ruling goes against us it could arouse suspicion which provides grounds for a subsequent criminal investigation.
Whatever happens I believe that it this ever goes to a proper court we would be cleared. If it does end up in a court the PL know full well that all the skeletons in their closet would be publically exposed. I am confident they have more to hide than us.

 

[Saddleworth2]

here you go.

https://www.tas-cas.org/fileadmin/user_upload/CAS_Award_6785___internet__.pdf

contrast para 240 or 253 on the one hand with para 273 on the other.

otherwise fill your boots.

fascinating reading mate. I was particularly interested in the wording around our failure to cooperate which was stronger than I expected. My understanding was that we withheld evidence because it was commercially sensitive and not relevant to the accusations, in essence a fishing expedition. Don‘t think my reading of the document actually matches that.
It looks like we are heading down the same road with PL.

 

[terraloon]

That was my view when I first saw the charges, but I have been beaten black and blue by the legal experts on here who say the alleged breaches do amount to fraudulent accounting (annual accounts not giving a true and fair view). I have promised to shut up about that (doing my best), but I will say this: if the PL is alleging such serious misdemeanours, it's good for the club because, firstly, the burden of proof is much higher (cogency of evidence) and, secondly, I don't see anything from what we know from CAS that would affect the true and fair view given by the signed, audited annual accounts from what we think we know about these alleged breaches. Not even if Mansour himself drove the sponsorship monies to Etihad in a bag with "disguised equity funding" written on it. Unless the PL has something new, I just don't see it.

But, hey ho.

As I say I haven’t seen anything to suggest to me, (a Chelsea supporter who has a background in some of these matters ) to suggest that city have filed with HMRC and or Companies House accounts that understate income.

The Mancini Contracts do pose a question for the football authorities but I very much doubt that HMRC would be that interested in money paid out and accounted for under other nations tax regiemes

It’s not just city that probably have an image rights issue but that will almost be a separate debating point.
For most clubs it’s one issue but for city the problem is wider because of the issue re selling image rights off.That I suspect is something additional that HMRC will be taking a view on but not sure it’s close to fraud.
The question for me in this regard is did the other entity pay the players and account for tax etc ? If not why not?

In this area cities biggest issue for me is how they sold off rights as I am far from sure that complies with the PL rules on such matters.

 

[halfcenturyup]

If you're saying that the allegations specifically over inflating sponsorship which are specifically referenced in the PL charge sheet differ substantially from those put forward by UEFA as justification for banning MCFC and fining the club £30 million, then that would impact on a analysis of the position. If you're not saying this, on the other hand, then I invite you to read the CAS Award in City's case against UEFA because the Award is arguably the best source out there in terms of explaining the charges in question.

After all, we're accused by the PL of breaching the duty contained in its rules to provide financial information that gives a true and fair reflection of the club's financial position "with respect to its revenue (including sponsorship revenue), its related parties and its operating costs". This is exactly the issue that dominated the CAS proceedings, and unless we're presented with evidence to the contrary, it seems to me perfectly reasonable to assume that the nature of the accusations from the PL is materially the same as that of the charges UEFA found proven against us.

In particular, then, I invite you to consider the text between pages 8 and 12 of the CAS Award, the Panel summarises the nature of the UEFA decision we were appealing in the proceedings at hand. In doing so, the panel quotes directly from the Decision of UEFA's Adjudicatory Chamber, so we have the findings straight from the horse's mouth as follows:



So there you have it in black and white. UEFA said that City deliberately and intentionally concealed the source of sponsorship income to circumvent the FFP regulations. In doing so, the club produced accounts that "were not complete and correct".

The offence of false accounting under section 17 of the Theft Act 1968 is a fraud-based offence. By virtue of section 17(1)(b), a person "shall, on conviction on indictment, be liable to imprisonment for a term not exceeding seven years" if that person "dishonestly, with a view to gain for himself or another or with intent to cause loss to another" when he "in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular".

That, in effect, is exactly what UEFA accused us of doing. The CAS rejected it, but the allegation was that the employees and officers of MCFC with whom they were dealing in the context of our FFP issues had committed conduct that happens to fall squarely within the above definition for the following reason.

If the CAS had found MCFC guilty, the relevant officers of MCFC;

1. would have had to have acted dishonestly (they're sophisticated businesspeople who fully understood UEFA's rules and, according to UEFA, knew what they were doing);
2. would certainly have been acting with a view to gain ... for another (the other being the club, and such gain taking the form of allowing the club to spend £200 million that otherwise wouldn't have counted as income for FFP purposes, as referred to in para 206 of the CAS Award); and
3. would have supplied various sets of accounts and other documents that were "misleading, false or deceptive" because they'd have provided documents including but not limited to our annual accounts that duped UEFA into thinking we had an extra £50 million available to us annually while still meeting the requirements of FFP.

How else are UEFA's accusations to be interpreted if not as allegations of conduct that, if committed, constitutes a serious criminal offence. There are all sorts of reasons why a prosecution might not have ensued even with a guilty verdict from the CAS, but make no mistake, what UEFA claimed we'd done constituted conduct that was, in effect, fraudulent.

I gave that a like purely because someone else was getting it in the neck, not me :)

 

[tolmie's hairdoo]

If you're saying that the allegations specifically over inflating sponsorship which are specifically referenced in the PL charge sheet differ substantially from those put forward by UEFA as justification for banning MCFC and fining the club £30 million, then that would impact on a analysis of the position. If you're not saying this, on the other hand, then I invite you to read the CAS Award in City's case against UEFA because the Award is arguably the best source out there in terms of explaining the charges in question.

After all, we're accused by the PL of breaching the duty contained in its rules to provide financial information that gives a true and fair reflection of the club's financial position "with respect to its revenue (including sponsorship revenue), its related parties and its operating costs". This is exactly the issue that dominated the CAS proceedings, and unless we're presented with evidence to the contrary, it seems to me perfectly reasonable to assume that the nature of the accusations from the PL is materially the same as that of the charges UEFA found proven against us.

In particular, then, I invite you to consider the text between pages 8 and 12 of the CAS Award, the Panel summarises the nature of the UEFA decision we were appealing in the proceedings at hand. In doing so, the panel quotes directly from the Decision of UEFA's Adjudicatory Chamber, so we have the findings straight from the horse's mouth as follows:



So there you have it in black and white. UEFA said that City deliberately and intentionally concealed the source of sponsorship income to circumvent the FFP regulations. In doing so, the club produced accounts that "were not complete and correct".

The offence of false accounting under section 17 of the Theft Act 1968 is a fraud-based offence. By virtue of section 17(1)(b), a person "shall, on conviction on indictment, be liable to imprisonment for a term not exceeding seven years" if that person "dishonestly, with a view to gain for himself or another or with intent to cause loss to another" when he "in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular".

That, in effect, is exactly what UEFA accused us of doing. The CAS rejected it, but the allegation was that the employees and officers of MCFC with whom they were dealing in the context of our FFP issues had committed conduct that happens to fall squarely within the above definition for the following reason.

If the CAS had found MCFC guilty, the relevant officers of MCFC;

1. would have had to have acted dishonestly (they're sophisticated businesspeople who fully understood UEFA's rules and, according to UEFA, knew what they were doing);
2. would certainly have been acting with a view to gain ... for another (the other being the club, and such gain taking the form of allowing the club to spend £200 million that otherwise wouldn't have counted as income for FFP purposes, as referred to in para 206 of the CAS Award); and
3. would have supplied various sets of accounts and other documents that were "misleading, false or deceptive" because they'd have provided documents including but not limited to our annual accounts that duped UEFA into thinking we had an extra £50 million available to us annually while still meeting the requirements of FFP.

How else are UEFA's accusations to be interpreted if not as allegations of conduct that, if committed, constitutes a serious criminal offence. There are all sorts of reasons why a prosecution might not have ensued even with a guilty verdict from the CAS, but make no mistake, what UEFA claimed we'd done constituted conduct that was, in effect, fraudulent.

Cheers Pete, that's what I was trying to say in layman terms, but your legalese explains it so much better ;)

 

[halfcenturyup]

You can have 100% legal books that still deceive the Premier League.

Inflating sponsorships, paying players and managers off the books, disguising owner investment...these are all things that would constitute dishonest accounting from the Premier League's point of view but not criminal fraud.

They would represent dishonest disclosures to the PL, not dishonest accounting. Imho.

 

[halfcenturyup]

Cheers Pete, that's what I was trying to say in layman terms, but your legalese explains it so much better ;)

And so much longer :)

 

[mcfcphil]

They would represent dishonest disclosures to the PL, not dishonest accounting. Imho.

Surely inflating/concealing the true nature of revenue/costs has to be dishonest accounting?

For example, let's say the Sheikh got bored and sold up - the accounts upon which any potential buyer would base a valuation of the club would include fictitious revenue/concealed costs that would disappear the moment they took control.

I have very little idea of accounting but I'd be surprised if you could carry out that kind of activity and stay within the law.

 

[feedmpenzaandhewillscore]

Surely inflating/concealing the true nature of revenue/costs has to be dishonest accounting?

For example, let's say the Sheikh got bored and sold up - the accounts upon which any potential buyer would base a valuation of the club would include fictitious revenue/concealed costs that would disappear the moment they took control.

I have very little idea of accounting but I'd be surprised if you could carry out that kind of activity and stay within the law.

Silverlake purchased $500 million share in the City Football Group back in 2019. They would have done the due diligence on City’s accounts and would have come to the conclusion that $500 million was worth a 10 percent stake in the club.

As daft as these charges sound, did Citys owners mislead Silverlake on what the value of the club was? Or were they in on it as well? Building a £365 million pound asset on the Etihad campus in the Co-Op Live arena is not something you do if you felt you had been ripped off or miss sold something by City’s owner.