PL charge City for alleged breaches of financial rules

[dickie davies]

Nor does it mean that, as he seems to suggest, there must therefore be something wrong with them. Obviously, as we've done to death on here, if they're set up with a view to creating a fraudulent disguise for shareholder investment by portraying it as sponsorship income, then THAT would constitute (among other things) rule breaches along the lines of the accusations against City.

Otherwise, the arrangements presumably amount, in the final analysis, to: individuals at City with connections to the Abu Dhabi royals or government apparatus allowing AD publicly owned sponsors preferential payment delays by making funds available to MCFC pending reimbursement; AD public body shareholders of such companies providing the latter with funding to meet the sponsorships obligations; or a combination of the above.

OK, fine, but how does this constitute, as the ‘charge’ references, a failure to provide "in the utmost good faith ... accurate financial information that gives a true and fair view of the club’s financial position, in particular with respect to its revenue (including sponsorship revenue), its related parties and its operating costs". Maybe there's an argument it does, and the PL obviously thinks so. It's far from evident based on the information in the public domain, though, and the explanations in the preceding paragraph are IMO prima facie far more persuasive.

As pithily stated in the post I've quoted, this field isn't an area of strength for Herbert, a lamentable illiterate in serious legal and financial matters He proclaims himself a friend as well as a former colleague of Nick Harris, on whose judgement here he's in all probability relying. Yet while Harris is more knowledgeable than Herbert on these issues, the former’s proficiency is still grievously deficient itself and, moreover, is tainted by a stench rather than a whiff of manifest bias.

There are all kinds of issues potentially at play here, none of which either Herbert or even Harris is even close to capable of analysing in competent or credible fashion (as opposed to Nick’s detailed but myopic rehashes of the ‘prosecution’ case). I could speculate what the issues at hand might possibly be, but I'm really not sure that it serves any purpose. Nonetheless, in this monster of a thread they've all had an airing at some point anyway.

That said, unless City have been improbably and monumentally stupid in the drawing up and execution of the arrangements, I'd contend that they're really not especially likely to be the subject matter of the kind of fraud or deliberate concealment that would allow the statutory time-bar to be lifted for issues before season 2016/17. And it's hard to see how the accounts didn't give a "true and fair" view thereafter.

The latter argument seems to me to apply even if one accepts the wholly contentious premise that AD sponsors should have been declared as "related parties", at least as long as the fees under the relevant contracts were broadly at market value. No doubt our accounting brethren will pull me up on this one if I have it wrong.

TL, DR. Another year, another vacuous, cheerleading piece of simplistic clickbait bullshit from Herbert, coming close to straying over the border with outright mendacity if it doesn't actually do so. No surprises there. Still, I have to give the guy credit for one thing, namely his sheer chutzpah in being that grotesquely ugly yet being prepared even so to appear in public without a bag over his head. He has looks and intellectual ability on the same level.

 

[Prestwich_Blue]

And could the accounts potentially be deemed false if and a lot of ifs here so maybe I am over doing it and being overly worried. I am not really too worried more seeing if I can be less worried if that makes sense.

Any what I was going to say if they can be disputed as related party and then potentially marked down in value potentially significantly then could the accounts be deemed false ?

Also it strikes me as problematic for the panel they are presumably set up in a way that takes evidence and forms opinions on trustworthiness of witness etc if the focus has been on are such and such telling the truth and is this or that related etc and what happened with x y or z money etc.

If they then decide that x is actually related would it not need another panel or another hearing and some outside companies to value the deals and determine fair market value ?

This issue of whether Etihad, Etisalat or any other Abu Dhabi company is a related party is a complete red herring.

The accounts aren't rendered fraudulent or misleading if they are deemed to be, and we didn't declare them as such. The definition of an RP is partly subjective but there's no obvious way that Etihad and Sheikh Mansour are related parties. Etihad and City definitely aren't.

The red cartel have got their knickers in a twist over this, and I suspect that's at least partly due to them wanting to see the value of the Etihad sponsorship (assuming we'd have to declare that if it was an RPT).

FFP allows investment, including via commercial sponsorships, from owners and other related parties, as long as these are deemed to be at FMV. PSR doesn't say anything about this. CAS said that (at the time of that hearing) that Etihad was FMV and not disguised equity funding. As long as that's the case, the issue of whether it's an RPT is irrelevant.

 

[slbsn]

I was just answering a question about the effect if the PL succeeded in changing the nature of the Etihad transaction, for example, to an RPT.

But yes, it's all speculation. No-one knows anything. You do agree, though, that the fact he has this "understanding" suddenly and chooses to share it is interesting?

Edit: And just to be clear, I never said RPTs and FMVs are the key allegations, the key (most serious) allegations are presumably the funding of the sponsorships and its effect on the accounts. I do think it's likely they have been included in the PL's Statement of Facts, though. It's fine if you don't share that view.

I tend to think there is a good chance Herbert’s piece is based on the most throwaway of comment that someone heard third hand via a Chinese whisper.

PS I don’t know what you mean re the PLs Statement of Fact. There may be areas of Common Ground but the related party position
in fact is that Etihad and Etisalat are not RPs so it could not included in any statement of fact except City’s. If you are right it is an issue not common ground.

 

[Exeter Blue I am here]

Nor does it mean that, as he seems to suggest, there must therefore be something wrong with them. Obviously, as we've done to death on here, if they're set up with a view to creating a fraudulent disguise for shareholder investment by portraying it as sponsorship income, then THAT would constitute (among other things) rule breaches along the lines of the accusations against City.

Otherwise, the arrangements presumably amount, in the final analysis, to: individuals at City with connections to the Abu Dhabi royals or government apparatus allowing AD publicly owned sponsors preferential payment delays by making funds available to MCFC pending reimbursement; AD public body shareholders of such companies providing the latter with funding to meet the sponsorships obligations; or a combination of the above.

OK, fine, but how does this constitute, as the ‘charge’ references, a failure to provide "in the utmost good faith ... accurate financial information that gives a true and fair view of the club’s financial position, in particular with respect to its revenue (including sponsorship revenue), its related parties and its operating costs". Maybe there's an argument it does, and the PL obviously thinks so. It's far from evident based on the information in the public domain, though, and the explanations in the preceding paragraph are IMO prima facie far more persuasive.

As pithily stated in the post I've quoted, this field isn't an area of strength for Herbert, a lamentable illiterate in serious legal and financial matters He proclaims himself a friend as well as a former colleague of Nick Harris, on whose judgement here he's in all probability relying. Yet while Harris is more knowledgeable than Herbert on these issues, the former’s proficiency is still grievously deficient itself and, moreover, is tainted by a stench rather than a whiff of manifest bias.

There are all kinds of issues potentially at play here, none of which either Herbert or even Harris is even close to capable of analysing in competent or credible fashion (as opposed to Nick’s detailed but myopic rehashes of the ‘prosecution’ case). I could speculate what the issues at hand might possibly be, but I'm really not sure that it serves any purpose. Nonetheless, in this monster of a thread they've all had an airing at some point anyway.

That said, unless City have been improbably and monumentally stupid in the drawing up and execution of the arrangements, I'd contend that they're really not especially likely to be the subject matter of the kind of fraud or deliberate concealment that would allow the statutory time-bar to be lifted for issues before season 2016/17. And it's hard to see how the accounts didn't give a "true and fair" view thereafter.

The latter argument seems to me to apply even if one accepts the wholly contentious premise that AD sponsors should have been declared as "related parties", at least as long as the fees under the relevant contracts were broadly at market value. No doubt our accounting brethren will pull me up on this one if I have it wrong.

TL, DR. Another year, another vacuous, cheerleading piece of simplistic clickbait bullshit from Herbert, coming close to straying over the border with outright mendacity if it doesn't actually do so. No surprises there. Still, I have to give the guy credit for one thing, namely his sheer chutzpah in being that grotesquely ugly yet being prepared even so to appear in public without a bag over his head. He has looks and intellectual ability on the same level.

A magnificent post to kick off 2025! Happy New Year to you, Sir!

 

[CC1]

You have to have good grounds to launch an investigation, is my understanding. Unless there's another Der Spiegel-type article about the financial dealings of another club, there are no grounds.

Having said that though, any club whose owners' accounts are filed in a tax haven should definitely be investigated. Any responsible regulator would want to know about any debt not declared via publicly filed accounts, in order to ensure that the club was at no risk should something happen.

Why on earth are some clubs allowed to file in a tax haven?!! If they belong to an English PL that seems to have its own rules (legal or not) then all accounts should be filed here

 

[halfcenturyup]

I tend to think there is a good chance Herbert’s piece is based on the most throwaway of comments that someone heard third hand via a Chinese whisper

Very possibly :)

 

[Prestwich_Blue]

You have to have good grounds to launch an investigation, is my understanding. Unless there's another Der Spiegel-type article about the financial dealings of another club, there are no grounds.

Having said that though, any club whose owners' accounts are filed in a tax haven should definitely be investigated. Any responsible regulator would want to know about any debt not declared via publicly filed accounts, in order to ensure that the club was at no risk should something happen.

Just to add to this issue of offshore funding, when we bought Sergio from Atletico, the agreement involved payment in instalments. I think it was something like one-third down upfront and the balance over two years.

Atletico did what many other clubs do, and 'sold' the future instalments in exchange for a one-off payment. That payment came from an offshore trust and the PL would not register the transfer until they had clarity over the actual source of the funds. This is standard in Anti-Money Laundering processes (unless you're Standard Chartered of course).

There was a bit of a stand-off though, as one of the points of an offshore trust can be to hide beneficial ownership. Eventually it was revealed that it was the owner of what was described as "an eponymous chain of bookmakers". I hazarded a guess it was Fred Done but I think the proceeds of the trust came from a sale of the chain, and I think him and Peter still own their shops.

It doesn't matter who the individual is though. The point is that the PL were not prepared to register the transfer due to unattributed offshore funds being involved. And they were able to get the information they wanted, despite the presumed secrecy of an offshore trust.

 

[Man_City_Loyal]

Just to add to this issue of offshore funding, when we bought Sergio from Atletico, the agreement involved payment in instalments. I think it was something like one-third down upfront and the balance over two years.

Atletico did what many other clubs do, and 'sold' the future instalments in exchange for a one-off payment. That payment came from an offshore trust and the PL would not register the transfer until they had clarity over the actual source of the funds. This is standard in Anti-Money Laundering processes (unless you're Standard Chartered of course).

There was a bit of a stand-off though, as one of the points of an offshore trust can be to hide beneficial ownership. Eventually it was revealed that it was the owner of what was described as "an eponymous chain of bookmakers". I hazarded a guess it was Fred Done but I think the proceeds of the trust came from a sale of the chain, and I think him and Peter still own their shops.

It doesn't matter who the individual is though. The point is that the PL were not prepared to register the transfer due to unattributed offshore funds being involved. And they were able to get the information they wanted, despite the presumed secrecy of an offshore trust.

Predominately UK-based bookies?

 

[Prestwich_Blue]

Why on earth are some clubs allowed to file in a tax haven?!! If they belong to an English PL that seems to have its own rules (legal or not) then all accounts should be filed here

They do file accounts in the UK. There are at least 7 companies registered at Companies House, including Manchester United Football Club and Manchester United Limited, along with 5 companies set up when the Glazers took over (all starting with Red Football). So you can see any filings for those, including accounts.

But what we don't know is if anything is hidden in the Cayman Islands, or even in Delaware. The PL shouldn't issue the 'golden share' or whatever, which confers official PL membership, until it's had sight of these companies. Otherwise how can they be sure there's no money laundering or other dubious legal or financial activity (e.g. disguised ownership)?

 

[CC1]

They do file accounts in the UK. There are at least 7 companies registered at Companies House, including Manchester United Football Club and Manchester United Limited, along with 5 companies set up when the Glazers took over (all starting with Red Football). So you can see any filings for those, including accounts.

But what we don't know is if anything is hidden in the Cayman Islands, or even in Delaware. The PL shouldn't issue the 'golden share' or whatever, which confers official PL membership, until it's had sight of these companies. Otherwise how can they be sure there's no money laundering or other dubious legal or financial activity (e.g. disguised ownership)?

Exactly - but it’s the usual acceptance for certain clubs. Imagine if we had been doing that ….