Is it all starting to unravel for the owners of Coventry City Football Club?

SISU and the SISU nominated administrator are now under serious pressure.  The administration process of CCFC Ltd is set to become a liquidation process, although not yet initiated, where investigations in the failure of the company will be high on the agenda.  New evidence has come to light that questions their interpretation of the structure of the companies behind the club as set down by both Tim Fisher, CEO of Otium Entertainment Group and CCFC Holdings Ltd, part of the SISU group of companies, and contained in the Administrators Report written by Paul Appleton.  On Tuesday, the owners issues were compounded by the rejection of the application for a judicial review at the High Court, initiated by SISU, into the loan ACL received from the Council earlier this year.  It is somewhat unfortunate for ACL that the ruling came after the final meeting of the creditors when the CVA was rejected, although the extent to which it would have changed the outcome, had it arrived earlier, is marginal.

Throughout the administration process, Fisher and Appleton have consistently declared that CCFC Ltd did not own any players.  They have stated that the registrations reside with parent company Holdings.  Just to be recap, Appleton declared on 27 June 2013 that

However, as I’ve stated on many occasions, it is Holdings which employs the players

The club made a declaration at the beginning of the process, stating on March 21 that

The Club can confirm that all staff wages, PAYE and all other creditor commitments will continue to be met as before by Coventry City Football Club Holdings.

The minutes of a club meeting in 2008 were published on Friday which record that the board at that time considered that the roles and responsibilities for CCFC Ltd should include ‘football operations, player registrations, current land issues and the holding of the golden share’.  Holdings Ltd responsibilities were to include ’employment of all non-football staff’ and ‘the management of ACL day to day relationship’.  It would appear to show that the intention was for CCFC Ltd to be the football club and Holdings to be the property and administrative arm of the business.  ACL issued a statement, after the final creditors meeting, that included the following

These documents show also that far more than the Golden Share lay in Coventry City Football Club Limited, which was also the location of the players, manager, gate revenues and everything else associated with the Football Club

The clubs current accountants, BDO, were appointed as auditors shortly after that Board Meeting.  As part of the pre-engagement investigations, inquiries would have been made to ensure that the manner in which the reports were prepared was in accordance with both the Memorandum of Association and the wishes of the Board.  All of these papers submitted thus far have confirmed the structure of the companies as directed by the Board – CCFC Ltd is the football club.   Former Chairman, Ray Ranson, signed off the 2008 Balance Sheet and was present at the meeting.  Former director of both CCFC Holdings Ltd and SBSL Ltd, the ultimate parent company, Igwe Onyechinaeduanaghaefuuzo, was both present at that meeting and also signed off SBSL Ltd reports in 2008.  By completing the accounts in the manner submitted, both the auditors and the chairmen surely must have considered that the allocation of assets, income and costs to be in agreement with the intention and direction of the Board.  Igwe remained a director until 14 September 2012, after the last set of accounts were submitted which Fisher even signed off for both companies.  None saw any reason to contradict the manner of preparation.

Fisher put forward his case on the ground share with Northampton in the national media, before the publication of the new evidence, and declared

 You cannot posture or mislead in a situation like this. It would be insane.

It would surely be insane to mislead on any of the issues surrounding the structure of the companies, one of which is in administration and yet interpretations differ to such an extent that this appears to have occurred. As a detailed investigation has already been undertaken with the administration process, a statement could be released to provide the background as to what grounds their interpretations were based upon.  Will Fisher and Appleton now provide the evidence that supports their version of events?  On the day of the creditors meeting, the Coventry Telegraph reported that Fisher said

They’ve run us up against a cliff edge of liquidation and they’ve moved to tip us over, … All I can say is that it is the biggest crying shame

Were ACL attempting to push the club over the edge or was this a case of posturing by the club?  At this point, ACL, as landlords at the Ricoh, had offered a new rental deal, below market value at £120,000 per year, rolling over a period of 10 years with break clauses, in an attempt to convince Otium and SISU to allow the club to remain in the city of its name. If this and other conditions were agreed, ACL would sign the CVA to bring CCFC Ltd out of administration. ACL’s statement after the final creditors meeting also included the following

It is interesting to note Mr Fisher’s failure to mention Ms Seppala’s verbal statement during this meeting [on the 25th July], made in the presence of her own lawyers that the only circumstance in which the Club would return to the Ricoh would be upon SISU assuming full ownership of the venue without any negotiation on purchase price. Ms Seppala also stated at this meeting her intention to continue to threaten ACL and its shareholders with expensive litigation at every possible opportunity. Perhaps the fact that Mr Fisher was not himself present at this meeting has distorted his view of what was really discussed.

Seppala’s alleged attack confirms the suspicions of many commentators and supporters of the club and certainly concurs with the opinion of a Member of Parliament. Bob Ainsworth, the MP for Coventry North East, suggested in parliament in March that for SISU,

the agenda has been to destabilise the company and thereby gain control at a fire-sale price

The club issued its response with the Coventry Telegraph reporting that

When Joy Seppala met with representatives of ACL on July 25, she certainly did not demand full ownership without negotiation. She made the point that every football club needs access to matchday revenues and should own its stadium – especially under the Financial Fair Play rules.

Two conflicting reports on the same topic once more.  However, it is the failure to engage with the whole statement made by ACL which is key – it is unlikely to be the newspaper failing to report on such a matter.  The statement makes no mention of the split of responsibilities between the two companies that conflicts with that put forward by Fisher and Appleton.  Two former directors have also chosen to speak on the matter.  Joe Elliot, former director and life president has discussed the attempts that he has made to disclose information to both the Football League and the Administrator.  Neither accepted any of the documents offered – Elliot described the folder as ‘six inch deep’.  The other director, Garry Hoffman was reported as stating

Nothing changed in fact, or that being the intent, until I left the board in December 2010. I don’t know what’s happened since.

The Football League must be watching nervously in the wings. Greg Clarke, the Chairman released a statement on the ten point deduction for starting the season in administration, stating that

Once again, it is a source of immense frustration to everyone involved that the two parties in this dispute have failed to reach any agreement. The board is dismayed at the level of intransigence being shown.

It would appear that it is SISU that is now looking increasingly as the party likely to be described as uncompromising in this dispute.  It is worth reflecting on Tuesday’s judgement at the High Court. The judge, Mr Justice Males has refused permission for the application for the judicial review to proceed.  An appeal can be made but, judging by the tone of the response, would not be welcomed by the courts.  Should SISU decide not to appeal, the judge will instruct them to pay the legal costs of ACL.  The ruling noted that the application was submitted outside of the time limits required in these types of cases. Regardless, the Judge was

not persuaded that there is an arguable case that the loan by the Council constituted an unlawful state aid.  It was made on commercial terms

The judge has reviewed the documents submitted with the application and the corresponding documents put forward in response from ACL and has dismissed the case out of hand.  So when all of the relevant documents regarding the structure of the club and the companies that control it are surveyed by the Liquidator and the Football League, if they are minded to do so, would a very similar conclusion be drawn to that of the judge, of not being persuaded that there is an arguable case?  Rhetoric needs to now be backed up with hard evidence by all parties involved.  The wider football world and governments are waiting.

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16 Responses to Is it all starting to unravel for the owners of Coventry City Football Club?

  1. I reference a quote by Churchill on this, its not the end of the beginning but the beginning of the end…….i think fans not attending 6 home games will be enough to break Sisu. Whoever is waiting in the wings needs to polish their lines ready for them to take to the stage……..

    • James Burberry says:

      I think Churchill actually said “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” I can only hope you’re right about 6 home games but I suspect that this is going to play out for some time before the end-game is reached and I can well imagine nobody will be happy with the final result.

    • rickster says:

      itl take more than 6 but the point stands

  2. JOHN UNITT says:

    I hope they dont attend any matches at Northampton EVER, and i hope you are right – because by God SSIU need breaking and fast! Most CCFC fans with half a brain cell can see clearly that you cant trust Fisher’s word on anything – i dont know how he sleeps at night – must be being a paid mercenary for the faceless Seppela that helps him,There is no way on this earth they have any intention of building another Stadium in Coventry – and no council whether Coventry Rugby or any other adjacent Administration area in their right mind would let them. SISU are an utter abomination and have never intended to sit and negotiate at any point SISU SCUM OF THE EARTH for RUINING COVENTRY CITY FOOTBALL CLUB!

  3. I am not sorry to disappoint some of the bigots who follow the Sky Blues but the answer is NO!

  4. isDear Richard Higlett _
    I am afraid that you got your quote wrong. What Winston Churchill said was, “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

    SISU obviously moved the players’ contracts and salaries etc., from Ltd to Holdings before SISU put themselves into administration in March. So what? The Council was trying to wrest control of the Football Club from the rightful owners and give it to someone of their choosing, i.e. Preston Haskell IV. This is surely unethical and possibly unlawful and is a kind of theft. But I have noticed that your blog although interesting comes at this, always from one side, you never criticise the Council’s actions.

    The minutes of the Board Meeting from 2008 prove only that the players’ contracts etc., were in Ltd in 2008. So what? This is history and surely Joe Elliott and Gary Hoffman knew this, as they were on the board and one of them may well have placed a copy in the public domain. This is irrelevant.

    Were the owners of the Club expected to do nothing and let the Council steal the Football Club off their rightful ownership? Of course not. SISU did what any other company would have done to protect themselves and I believe have done nothing wrong. I am afraid, I think you are clutching at straws.

    As for the judge and his ruling, yes it is clearly a setback for SISU, but it is not anywhere near the end game. Compass, the catering company will not have any patrons and the Council/ACL will be in breach of contract and could be sued for loss of income. So too could the casino whose viability was only ever marginal. The sponsorship of the Arena comes up in 2015 and I can’t see Ricoh renewing without a Football Club as the anchor tenant. It must have been told to expect a Premier League team would soon be playing there, when the sponsorship started in 2005. The Jewson, Tesco and Telegraph stands are no longer sponsored and I expect the Lloyds Pharmacy stand sponsorship will end when that comes up for renewal. There will be no advertisers in the stadium. Who will want to advertise in an empty stadium? The other businesses there, like the restaurant, hotel , shops, banqueting and conference centre are likely to suffer a downturn in footfall. What businesses would want to locate there when its owner rips off and litigates against its own football club and ultimately forces it out. This bad publicity is going to hit the Ricoh hard.

    Who will outlast the other between SISU and the Labour Council. Well SISU have millionaire backers and investors, while the Council have to answer to the electorate of Coventry and explain the loss and waste of their money.

    The Labour Council seems to think the Arena is the People’s Democratic Republic of Coventry stadium. But the Sky Blues supporters thought the Council only stepped in to finish the Arena project and that it was only in safe keeping until the Football Club could afford to buy it back.

    I think the sentiment is beginning to turn and will turn. So far the Council has been like “Macavity’s Mystery Cat”, and have escaped much attention, but I think that is beginning to change. Who will buckle first, could be very interesting.

    It is a no brainer that the Football Club should own the Football Ground and the only vehicle that can bring the Club and the Arena together is SISU. If you are waiting for SISU to fall apart I think you could wait for a long time.

    Best wishes,

    Peter Chambers.

    • Iain says:

      Dear Peter,

      I have no doubt that you are a long time CCFC supporter, especially if your are the one and only music journalist. Like you I am a very cross and angry about the whole situation. Before the start of last season I gave up my season ticket (with 12 of my friends) after 25 years. The graffiti was clearly already on the walls of the Ricoh and many of us thought SISU had shown their hand and were no longer to be trusted with our hard earned money. However, there may be a little merit in some of what you say as it is a mess of everyone’s making. We should remember that SISU once saved the club, But we must also remember that ACL saved Coventry City FC from playing in the park with “jumpers for goal posts”.

      ACL built the ground with local tax payers money to save the club, and it cost quite a lot of our money, personally I do not run away from paying my debts and I don’t think the club should either. I would certainly not advocate that the council just gives my investment to a hedge fund to profit from and provide me with nothing in return. I would prefer they demolish it and turn it into much needed social housing rather than SISU have it at a fire sale price. At least it will do some good for the community who owns it.

      In my opinion your anger at the council, however heartfelt, is misplaced as SISU have had no interest in the well being of the football club since Ray Ranson left the board.

      best wishes

    • Russ says:

      Actually Peter, transferring assets whilst leaving debts in the way that you seem to describe here is unlawful (unethical too, many would say)::

      And SISU could’ve bought the Higgs 50% share of ACL at any given point in this, probably for around £4m – £6m but decided to walk away from the deal.

      In the meantime, the council’s conduct has been investigated by a judge, so hardly escaping attention there. I’d welcome a similar focus on SISU.

      You are factually incorrect on ACL’s relationship with Compass – so I’m afraid you’re grasping at straws there. A joint company (IEC) has been set up with Compass to handle F&B, ACL with the majority holding. No scope for legal action there, sorry.

      Similarly, what landlord would not litigate against a tenant who steadfastly refused to pay the contracted rent – or negotiate honestly.

      It’s not actually a ‘no brainer’ that a football club need to own their ground. That’s just lazy thinking. What they need is some sort of access to revenue streams, which of course CCFC sold when the Ricoh was built, and now seem to want back for free.

      Maybe if SISU had negotiated honestly rather than trying to break ACL, they might have been in a position to discuss this whilst still playing in Coventry. Indeed, that option would still seem to be open. CCFC could play at the Ricoh whilst either negotiating straightforwardly or making plans to move on, and make more money than they will at Northampton whilst doing so. But for some reason Mr Fisher has already said that he’s not willing to talk to ACL; there’s no commercial sense in that decision unless SISU’s sole aim is still to distress ACL.

      Who breaks first? From here ACL seem to be sitting on a decent sized asset with potential for development into other areas and sympathetic bankers. SISU on the other hand have few assets, huge costs, and have alienated 90% of their core customers. They’ve already lost £30m – 60m and they are now proposing to plough another £20m – £30m in for a new stadium. Then they will recover all of that debt through a business that hasn’t turned a profit in living memory. That is a truly remarkable business plan.

      What fans really want though, is for this to be resolved before either side ‘breaks’. I suspect it may need new ownership of CCFC before that can happen though, given SISU’s intransigence.

      Anyway, I doubt any of the above will change your opinions Peter, but I don’t want you to labour under the misapprehension that you are basing your hatred of ACL and the Council on facts. From where I sit, that doesn’t seem to be the case.

  5. V Ryder says:

    Very interested to see Michael Byng at Leyton match. Are Otium getting nervous? Looking for an exit strategy?

  6. Paul O'Donnell says:

    NEPSSI LLP , anyone know anything about this limited liability partnership?

    Some interesting partners

    • Richard B says:


      The LLP means we will never see their accounts which is unfortunate. This may be of interest – a post which breaks down part of the SISU empire.

      Apologies for the delay in getting replies up – I am in the middle of moving house and a little bit busy!

      • Paul O'Donnell says:

        If you go into the company check website you can see who the fellow partners are. I looked at some of the registered addresses, and they read like a world atlas of tax havens.
        In the old days of partnership law, if one of partners was doing something “naughty”, other partners could be held liable. I wonder why and for what reason this partnership exists.
        Also, presumably Coventry City FC is only part of the SISU empire at the moment. What other operations and schemes are they involved with? We also only hear the name of Joy Victoria Seppala mentioned. Where is Mr Dermot Coleman in all this? He is more anonymous than she, but presumably he must have a lot riding on it. Finally, who are the “other investors” in SISU? I think we should be told.

  7. Pingback: The Sky Blue Daily | Sky Blue Daily Digest 8 August 2013

  8. Paul O'Donnell says:

    If the players contracts were transferred from one entity (CCFC Ltd) to Holdings Limited, would there have been any TUPE impications? (Transfer of undertakings, protection of employment).
    If so, this would establish when the players contracts were transferred.

  9. Martyn G says:

    Peter Chambers you raise some interested, but as you put it one sided view of the situation. More and more information is being brought to the Public Domain, some of which is available by completing a quick Google search, but the Shining world of SISU is not a rosey as people are lead to believe by the SISU followers……


    As to the Billionaire backers, they will only stick around as long as they are making money, and given the figures above this cannot be long now. ACL have always been open that they looked to bid for the company in Administration, along with other bidders, but SISU clearly were lookingt o wrestle the Ricoh Arena from the Legal Entity that owned this land and ran this venture on behalf of the joint owners. Like SISU, ACL went to their Owners/Backers and asked for Financial Support due to the refusal of the Club to pay the rent that they had signed up to when the club was purchased by SISU, in order to avoid defaulting on their loan and and the Council and Higgs Trust being left with a shortfall when SISU bought the Arena for less than the debt owed.

    I fear that SISU are still playing games with talk of a new stadium. Another Google search on Otium Entertainment reveals that they are still to issue reports for the previous accounting year, due in January 2013, and recent omissions that they have been re-capitalised by another SISU-related company just shows how they are moving money around to prop up a failing business.

    I hope that we see and end to this sorry saga as soon as possible but I believe the delay tatics are being rolled out to try and get this situation out of the public domain so some quiet deals can be done.

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