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.