PL charge City for alleged breaches of financial rules

give it to gordon said:
Just seen this how are Leicester allowed to be owned and sponsored by the same company ?

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Same as Newcastle under Ashley with Sports Direct. Nothing wrong with that, they’ll just be deemed related party transactions. If you were owners of those clubs, you’d be pretty daft not to sponsor them with your other businesses if you think about it!
 
I've watched bits here and there but, they start with City not winning a trophy for 40 years, then finish with not winning a trophy for more than 40 years.

There's a bit about one of our lawyers(?) travelling on an Etihad flight.

Now, if I recall, you have to get permission to use media material in any broadcast? Funny how they use SKY for the news coverage.
 
Prestwich_Blue said:
That's a good question that hinges on who is an isn't a related party. In accountancy standards that's defined as someone who owns, is a major shareholder in , or has significant influence over a business, or is a close relative of such a person.

It could be argued that Sheikh Mohammed bin Zayed, a full brother of Sheikh Mansour, is such a person with regard to Etihad. So, could he say to Etihad's management "Fund this sponsorship"? I suspect he could, so it's possible that Sheikh Mansour could be classed as a lclose relative" and therefore potentially Etihad could be deemed a related party to City. I suspect that's unlikely though.

If Sheikh Mansour was an Executive Director of Etihad, then they'd probably be classed as a related party. In that case, as long as the sponsorship was deemed fair value, there's no issue at all. Had he done that, then as long as we declared Etihad to be a related party, then there would have been no issue.

If, on the other hand, he has no role or influence in the day-to-day business of Etihad, then they're unlikely to be classed as a related party. But if he then personally funds the sponsorship then that classed a disguised owner investment, which is against FFP rules, even if it's fair value.

Now all commercial deals in excess of £1m have to pass the PL's fair value test, plus we know from CAS (which I'd long known) that the Etihad sponsorship wasn't funded by Sheikh Mansour.
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What would happen if you get an entrepreneur who was a deep affinity for a club - say Forest Green for arguements sake - the is absolutely no question of it being a related party transaction but the entrepreneur- driven by his love of the club decides he wants to pay tenfold the going rate? I’m assuming from an accounting perspective it is fine but, the other clubs in the league would woman like hell to the Football League - but I’m guessing technically there’s nothing they can do.
 
hertsblue said:
Same as the Rags, no indication they were being investigated, no list of failures or charges, just a statement and token fine after they were found to be guilty of breaking the rules with the press desperate to include the words “minor breach” re the Rags even though no ne knows the figures
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Well either, like in our case, UEFA leaked the fact of the investigation to the media and, unlike in our case, the media just sat on it, or UEFA didn’t leak it to the media.

Either way it stinks.
 
Prestwich_Blue said:
That's a good question that hinges on who is an isn't a related party. In accountancy standards that's defined as someone who owns, is a major shareholder in , or has significant influence over a business, or is a close relative of such a person.

It could be argued that Sheikh Mohammed bin Zayed, a full brother of Sheikh Mansour, is such a person with regard to Etihad. So, could he say to Etihad's management "Fund this sponsorship"? I suspect he could, so it's possible that Sheikh Mansour could be classed as a lclose relative" and therefore potentially Etihad could be deemed a related party to City. I suspect that's unlikely though.

If Sheikh Mansour was an Executive Director of Etihad, then they'd probably be classed as a related party. In that case, as long as the sponsorship was deemed fair value, there's no issue at all. Had he done that, then as long as we declared Etihad to be a related party, then there would have been no issue.

If, on the other hand, he has no role or influence in the day-to-day business of Etihad, then they're unlikely to be classed as a related party. But if he then personally funds the sponsorship then that classed a disguised owner investment, which is against FFP rules, even if it's fair value.

Now all commercial deals in excess of £1m have to pass the PL's fair value test, plus we know from CAS (which I'd long known) that the Etihad sponsorship wasn't funded by Sheikh Mansour.
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I think my issue is, and always has been that, from an accounting viewpoint the related party argument is largely irrelevant. A note dislosure omission at the worst. And then, if the disclosure note was included, it wouldn't make any actual difference for FFP because, as has been pointed out, fair value owner sponsorship is allowed.

Legally, I suppose there could be a case for fraudulent accounting or criminal conspiracy in some circumstances (even if it happened and they could prove it, which I doubt) but for either of these, as far as I understand it, you would have to prove some benefit from the fraud/conspiracy. What is the benefit here, when the contract is at fair value? If Etihad/ Etisalat hadn't signed, someone else would have at the same value. It's hardly the Salad Oil Scandal.

And, while I have you here, is disguised equity investment actually referred to in FFP? Can't remember seeing it other than in charges as a way to reduce our income.

Long post, sorry. Ignore it by all means :)
 
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