PL charge City for alleged breaches of financial rules

[Churchlawtonblue]

Pathetic.
Haven't you got something better to do than coming onto this forum and being a wum. Your life must be boring.

Does the same on the Ukraine thread. Tbh I'm not totally convinced he's even a City fan.

 

[kaz7]

Does the same on the Ukraine thread. Tbh I'm not totally convinced he's even a City fan.

No way is he a blue

 

[WRicko]

The emails don’t stand up unless they can produce a transaction to confirm payments were funded via Mansour and directed through related parties sponsorship deals. They wont have that and the sponsors can produce transactions that show they paid the correct amounts of money. Irrefutable evidence trumping opinion.

I agree So I do not know why you are mentioning this to me. I am not making a judgement on guilt or innocence or amount or lack of evidence I am just stating what we are accused of and how it has came about

 

[Saddleworth2]

Marginally yes, although that’s different issues.

Murdoch has dripped poison into the nations ear for decades. He has damaged us as much as any politician. It’s difficult to conceive how ownership of the Telegraph by one of the emirates could be worse than that. Only my opinion mind.

 

[Sky Blue]

No way is he a blue

A snake in the grass.

 

[Iassel]

And if we were found "guilty" on all charges do you think the club would sit back and accept it, given that they very much believe they've done nothing wrong? Getting rid of people just wouldn't be on any "to do list" as that would imply guilt. We would double down and fight tooth and nail.

There are very few options to fight though unless they could prove the tribunal had erred spectacularly in any findings of ‘guilt’. The club already tried to get the case killed at commercial court who rejected that and said the PL had jurisdiction and acted ‘fairly’. There wouldnt be future commercial court appeals, there wouldn’t be government intervention etc etc.

Of course it’s all semantics as the PL would need to present something so explosive to land all of the charges that it’s extremely unlikely to ever get to that stage, as I’ve said for ages now, my guess has long been ‘guilty’ of non compliance, a chunky fine and Pep and the board drinking Manchester dry.

 

[abu13]

Lets face it, if the PL had some smoking gun or whistle blower the club would be fully aware of the situation by now. And if we were bang to rights there would be things happening now that would indicate a problem. For example we may look to offload players to secure market value transfer fees, key people at the club would be moving on to new roles outside of the club.

What we wouldn't be doing is spending money on redeveloping the stadium, that on its own makes me feel very confident about the future.

 

[feedmpenzaandhewillscore]

I agree So I do not know why you are mentioning this to me. I am not making a judgement on guilt or innocence or amount or lack of evidence I am just stating what we are accused of and how it has came about

Apologies, I agree on what you said just reinforcing it for the prying eyes on this forum who want to see City hung drawn and quartered. They need to understand how flakey this case is and curb their enthusiasm.

 

[inbetween]

We don’t know the precise details of the charges but they use terms akin to false accounting such as in accurate etc. ok this might only mean in accurate in relation to FFP but I don’t believe it is and if it where that would likely only be the case of something that was contested like with Everton certain costs etc this would have be n discovered and argued over at the time like Everton

We assume these charges relate to hacked emails the hacked emails refer to what the media call inflated sponsorship they are in fact actually under the table payments from sheik and also off the books payments to players managers and agents. I think any of this would constitute cooking the books fraud etc

Our response will always be the same which is that we've complied with all legal process and as a result we haven't done anything wrong. The Premier League can't just create rules on what is good and bad on non-sporting issues because who are they to say otherwise? The rules can actually be deemed as damaging because punishments can harm clubs financially and this is where it will always be defeated in court, especially if it isn't done fairly and independently.

Everton were punished because they broke the rules but it's easy to prove that the punishment is ridiculous and actually stupid. Everton exceeded FFP by £20m and because of league position payouts their 10pt deduction could be worth far more than that, that's how stupid it is. Instead the Premier League is punishing them and making the problem even worse, it hardly saves clubs from going bust does it?

City can easily argue anything like this on the grounds of fairness. I know it's different but look at Real Madrid and Barcelona who are still going for a Super League and they haven't been punished. They haven't been punished because the Spanish courts have ruled that UEFA isn't allowed to punish them and so UEFA has no choice but to comply.

The emails etc aren't admissible in court so you can bet that they aren't admissible in an investigation conducted by a non-legal entity like the Premier League. The Premier League is actually just a company, it has no business really investigating other companies and handing out punishments for anything.

 

[Prestwich_Blue]

False accounting would be a problem yes but I don't think that is an accusation. There is a difference between creative accounting and false accounting. False accounting would be fraud, IE, you have lied about a transaction. I don't think that this is the case because the legal authorities such as the Serious Fraud Office or HMRC would be involved. The taxman would certainly be dropping the hammer on us.

The Premier League again is in no position to judge our accounts, as far as they're concerned our accounts are fully legal and audited because city are legally obligated under UK law to ensure that happens. The Premier League however has its own rules on accounting reporting and that's where the problem lies. Structuring deals to get around those rules isn't false or illegal accounting, it's creative accounting. Failure to comply and disclose these deals according to those rules is what we're accused of.

On creative accounting alone you could easily argue these same accusations against any club in the Premier League. Why do you think that the parent business who owns United is registered in the Cayman Islands? Why is the parent of Liverpool registered in Delaware USA? The reason for this is to avoid tax and keep the books out of UK scrutiny which is just another form of creative accounting.

I haven't read into all of the supposed breaches but it seems that they often come down to an extremely complicated web of transactions which probably aren't seen in the accounts. This doesn't mean that they're illegal, it may just mean that clearly certain transactions have been structured in such a way to avoid the rules let's say.

This is where I diverge slightly from Stefan's somewhat apocalyptic view that we're effectively being accused of fraudulent accounting and therefore expulsion from the PL and criminal charges are a potential outcome. I'm not sure that follows necessarily but I'm not an expert so he may well be correct. He definitely knows there's a fine line.

Accounting can often be a matter of interpretation as to how you show something and there can sometimes be a fine line between interpretation and deception. Accountancy at its heart requires being prudent about assets, liabilities, revenue and expenses. Don't undervalue expenses/liabilities and don't overvalue revenue/assets.

Valuation of stock is a classic example. The higher you value your stock in hand, the higher your reported profit. Companies are supposed to value stock at the lower of cost or net realisable value. So if you buy something for £100 and plan to sell it for £200, the stock value of that item should be £100. But if you'd had that item for sale for a while, and it had been superseded by a newer version, you might just want to get rid of it for £75, which should be its NRV and the value shown in the accounts. However you might leave it at £100. That's not necessarily 'true and fair' but it's not fraudulent either. It's an opinion. I used to do the audit of a brickworks in Little Lever and there were hundreds of thousands of bricks in stock that had to be valued. You couldn't count them and you certainly couldn't look at each one and estimate its NRV. And they were made there, not bought in so you made a best guess as to the total value of the stock. It may have been overvalued but that was the best we could do, as long as we could justify it.

At Wirecard my former KPMG colleague, Markus Braun, put $1.9bn of cash on the balance sheet that they didn't have. My former bosses at Independent Insurance deliberately withheld large claims from the system, thereby reporting profits that were actually significant losses. The software company Autonomy, who used to sponsor Spurs, are alleged to have claimed revenues on potential contracts they hadn't actually signed (among other things) leading HP to pay an inflated price when they they bought them.

So what could we have done? Have we inflated the value of sponsorships? No, at least according to UEFA/CAS. Was the Mancini contract an attempt to hide expenses? Unlikely but even if it was, it was a pin prick given the losses we were reporting. Did we attempt to deceive anyone over the players' image rights payments? No, as there was a clear trail to Fordham.

And who are we alleged to have committed fraud against? We were privately owned by Sheikh Mansour for the whole period under charges. Silverlake bought in in 2019, whereas the charges only cover the period to 2018. There's our auditors and other advisers potentially but have they (or anyone else) lost anything if we did? No. So who's the victim (don't say it!) here?

At worst, we've submitted potentially inaccurate accounts to the PL, which might impact our FFP position but (unless this 'fraud' is far more extensive than we think) definitely not the PL's Profit & Sustainability Rules.