Why have HMRC NCA SFO etc haven’t been involved
For what its worth, this is one of my "notes to self'" I wrote a while ago to get my head straight, based on the various contributions on here. I included the part about fraud as you seem to doubt the seriousness of the case. Ignore it and skip to the second part if I am wrong about that. It's long, but you asked .....
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Are these allegations of fraud?
The alleged rule breaches do not specifically refer to fraud or fraudulent behaviour, but it is generally understood that the combination of allegations around filing of accounts that don’t give a true and fair view, disguising equity as sponsorship and acting in bad faith, are effectively an accusation of fraud.
Let’s not forget that, before it was overturned by CAS, UEFA found the club guilty of improperly reporting, in the club’s audited accounts and various financial submissions to them, the source of around GBP 50 million annually by presenting it as income that could legitimately be expended under the FFP rules on transfers and player wages, among other things, when those funds in fact (according to UEFA, constituted owner investment that couldn't be spent on those items under the rules.
That UEFA made such a determination is there in black and white in the CAS award. The club certainly considered that the allegations were tantamount to accusations of fraud: The club said in its submission to CAS:
“The Adjudicatory Chamber found that ADUG entered into “arrangements” and/or a “scheme” to make payments to Etisalat and Etihad that were, in fact, “disguised equity payments”. The true nature of these payments is said to have been deliberately concealed and improperly reported by MCFC under the CLFFPR. These very serious allegations necessarily involve a conspiracy on the part of MCFC, its shareholder and these two sponsors [emphasis in the original]”.
As for UEFA's view on the matter, they stated that MCFC's conduct constituted:
"a series of very serious breaches, over [a four-year period] which were committed intentionally and concealed from the CFCB. The seriousness of these breaches is compounded by (.....) putting forward a case that ADUG know to be misleading.
So they outright accused the club of systematic, dishonest conduct, and of lying about that conduct in an attempt "to circumvent the objectives of [UEFA's FFP] Regulations".
The PL allegations, as far as anyone can judge from information in the public domain, repeated the accusation. In particular, the PL's statement of allegations included:
“In respect of each of Seasons 2009/10 to 2017/18 inclusive, the Premier League Rules applicable in those seasons that required provision by a member club to the Premier League, in the utmost good faith, of 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)”.
The references in that accusation to the duty to act "in the utmost good faith" and to produce financial information giving a "true and fair view" in addition to the specific mention of "sponsorship revenue" suggests that the PL's charge is exactly the same as UEFA's in this regard. Those formulations really don't lend themselves to any other credible interpretation.
Now, this is good and bad. It is bad for the club, because if the PL can prove the most serious allegations then that is very, very serious and the consequences in terms of sanction will be very severe for the club and, possibly, eventually for the individuals involved. On the other hand, it is good for the club because it raises the level of cogency of the evidence required by the PL to prove their allegations. As discussed previously, there is an acceptance that, generally speaking, people are inherently honest and do not generally engage in fraudulent behaviour and so, to prove such behaviour, the evidence would have to be far more cogent than in proving, for example, a mistake or an omission.
The CAS panel said:
“The panel adheres to the reasoning (.....) that, considering the particularly serious nature of the allegations in the present proceedings, the evidence supporting such allegations must be particularly cogent”.
Again, it is unlikely the PL panel will have had a different view.
If these are allegations of fraud, why hasn’t HMRC and the SFO started an investigation?
The above leads to another point often raised by City fans: if the PL’s allegations effectively represent allegations of fraud, why are authorities such as HMRC and the Serious Fraud Office not investigating the club?
Firstly, this is a civil case concerning breach of the contract between the PL and the club. There are many considerations at play in terms of what criminal investigatory bodies do and don't investigate, of course, but it would be very unusual for (say) the Serious Fraud Office to commence a criminal investigation in a case like this where what is alleged is a breach of the PL’s internal rules. Especially when there has previously been a case before CAS which has rejected the most serious claims because there was no evidence of any wrong-doing. I would hope HMRC and the SFO have better things to do than launch investigations on a whim. Both organisations can effectively just sit back and wait for the PL to do their preliminary work for them.
If none of the most serious allegations are proven to the standard required in a civil case it would be impossible to meet the standard of proof in a criminal case, which is much higher, of course (beyond a reasonable doubt).
If any of the most serious charges are proven, it is quite possible that a criminal investigation would be launched. Given how high-profile this case is, one can imagine a scenario where it would be difficult for the SFO to resist the pressure to launch such an investigation. However, the standard of proof in a criminal case and the age of some of the charges mean that it would be very difficult to persuade a jury that the accounts signed off up to 16 years ago were knowingly and fraudulently mis-stated. Moreover, if the PL were able to prove their most serious allegations it is almost inevitable that there would be an appeal, which would mean that the events in question would be even more historic. You can never say never in legal matters, but criminal charges seem very, very unlikely even if the PL allegations are successful. Which, as I have stated many times before for the many reasons set out here, I don't think there is the slightest likelihood they will be."
I am no lawyer and this includes just a little original thought, most having been summarised from people better qualified on here. But I think it sums up the discussions of knowledgeable posters reasonably well. I'm not really interested in a debate about the content. If you disagree with anything, knock yourself out.
