Derek Chapman has a swipe at DK

[El Presidente]

Sorry in advance if I'm showing my ignorance, but...

are you saying that the notional (not actual) value of 40 million £1 shares equates to only six per cent of the value of the club?

It's more of a mathematical relationship...

Tony Bloom originally owned (and these are ball park figures) 20 million out of 22 million shares, which is 90.9%

He now owns (having converted £40 million of debt into £40 million of equity) 60 million out of 62 million shares, which is 96.7%

 

[Creaky]

But it does matter. Using your inaccurate way to describe what happened: The shares are worth nil pence and Tony paid the privilege of a pound a piece for each of them. But that is not what happened. TB paid £40M of Albion bills and then wrote off the debt in the most tax-efficient way to the Albion. It's a time-honoured way of doing things, standard practice in many football clubs and throughout the business world. DK himself did precisely this.

This is not just semantics, it's a fundamentally different principle to 'buying' shares although I suspect you will disagree.

Yes I do disagree - if as has been suggested and the loan was made as a CLN then it was either linked to a fixed number of shares or a share value - either way the 40 million shares equated to the £40M loan.

Of course I agree that this is a 'time honoured way' of injecting capital into a company or writing off a loan to a company but doesn't change the outcome - TB acquired 40 million shares at a cost to him of £40M and increased his percentage holding in the club.

If the shares have no value I wonder if TB has heard of Freecycle

 

[Creaky]

It was to increase his shareholding in the club in percentage terms. However, as he already had over 90% of the club, it's merely an accounting adjustment. Whether he owns 90% or 97% it makes no difference in reality to the power he wields.

But does make a difference to those whose shares previously represented ~10% of the club if/when it reaches a sound financial footing.

 

[Buzzer]

Yes I do disagree.

Fair enough although I would advise against describing it as you have done if you ever sit an accountancy exam paper on financial reporting.

 

[Titanic]

But does make a difference to those whose shares previously represented ~10% of the club if/when it reaches a sound financial footing.

 

[El Presidente]

Yes I do disagree - if as has been suggested and the loan was made as a CLN then it was either linked to a fixed number of shares or a share value - either way the 40 million shares equated to the £40M loan.

Of course I agree that this is a 'time honoured way' of injecting capital into a company or writing off a loan to a company but doesn't change the outcome - TB acquired 40 million shares at a cost to him of £40M and increased his percentage holding in the club.

If the shares have no value I wonder if TB has heard of Freecycle

But it isn't a CLN

 

[Creaky]

Fair enough although I would advise against describing it as you have done if you ever sit an accountancy exam paper on financial reporting.

The clubs financial accounts do show that TB's holding has increased by 40 million shares, that the total of paid up shares has increased by 40 million and that the company liabilities have reduced by £40M

TB's personal portfolio shows that he has increased his holding in the club by 40M shares and that the amount owed by his debtors has decreased by £40M

 

[Creaky]

But it isn't a CLN

View attachment 48869

In which case then as these were new shares wouldn't it have been a rights issue and the other share holders, including DK have been given the option to buy shares, (in proportion to their existing holding), at the same price?

 

[Buzzer]

The clubs financial accounts do show that TB's holding has increased by 40 million shares, that the total of paid up shares has increased by 40 million and that the company liabilities have reduced by £40M

TB's personal portfolio shows that he has increased his holding in the club by 40M shares and that the amount owed by his debtors has decreased by £40M

Look, I know you love these cyclical arguments where both sides repeat their position ad infinitum but unfortunately I have the attention span of an 8 year old and get bored v quickly so I'm just going to refer you to the previous answers that both El Pres and I have given - and we're both professional accountants.

 

[Creaky]

Look, I know you love these cyclical arguments where both sides repeat their position ad infinitum but unfortunately I have the attention span of an 8 year old and get bored v quickly so I'm just going to refer you to the previous answers that both El Pres and I have given - and we're both professional accountants.

Fine - I'm just a businessman who knows that however an accountant likes to describe something, if I own something I didn't previously own and that it has cost me x amount to own it then that is what I have paid for it.

Accountants are very useful, wouldn't do without them, sometimes though I wonder if they see things the same as others do.

 

[Titanic]

Fine - I'm just a businessman who knows that however an accountant likes to describe something, if I own something I didn't previously own and that it has cost me x amount to own it then that is what I have paid for it.

Accountants are very useful, wouldn't do without them, sometimes though I wonder if they see things the same as others do.

I rather suspect that they (accountants) see them ('things') ACCURATELY rather than with some peculiar and rather tiresome slant on them (as you seem to insist on doing ad nauseam).

 

[Creaky]

I rather suspect that they (accountants) see them ('things') ACCURATELY rather than with some peculiar and rather tiresome slant on them (as you seem to insist on doing ad nauseam).

Well you may be correct - I have had enough dealings with accountants over forty odd years to believe anything! Maybe though it's knowing the difference between the value of something and the cost of something that is the difference between a businessman and an accountant.

 

[El Presidente]

Fine - I'm just a businessman who knows that however an accountant likes to describe something, if I own something I didn't previously own and that it has cost me x amount to own it then that is what I have paid for it.

Accountants are very useful, wouldn't do without them, sometimes though I wonder if they see things the same as others do.

Let's use your analogy.

You buy a house (let's say in Croydon) for £500,000.

There is a major property crash, and the market value of the property decreases.

You therefore swap the house for a tin of baked beans from Tesco.

According to you, the tin of baked bean has therefore cost you £500,000.

And whilst I agree with everything Buzzer says, I'm not strictly a professional accountant by trade, and never admit that when I am talking to an attractive lady, unless she wants a VAT return completed.

 

[Buzzer]

the value of something and the cost of something that is the difference between a businessman and an accountant.

Ah, that old cliche. And there was I thinking that you were the one arguing that these subtly different words were mere semantics.

 

[Creaky]

Let's use your analogy.

You buy a house (let's say in Croydon) for £500,000.

There is a major property crash, and the market value of the property decreases.

You therefore swap the house for a tin of baked beans from Tesco.

According to you, the tin of baked bean has therefore cost you £500,000.

And whilst I agree with everything Buzzer says, I'm not strictly a professional accountant by trade, and never admit that when I am talking to an attractive lady, unless she wants a VAT return completed.

In the real world let's say you stayed in that same house and the value of the house falls to the same price as a can of beans - how much did the house cost you? - that is the difference between the value of something and the cost of something.

The value of the shares that TB acquired may be the same as a can of beans but they sure as heck cost him £40M or £1 each.

 

[EDS]

In the real world let's say you stayed in that same house and the value of the house falls to the same price as a can of beans - how much did the house cost you? - that is the difference between the value of something and the cost of something.

The value of the shares that TB acquired may be the same as a can of beans but they sure as heck cost him £40M or £1 each.

You may as well go and bang your head against the wall, the fact accountants are employed by people who actually run businesses tells you all you need to know

 

[Buzzer]

You may as well go and bang your head against the wall, the fact accountants are employed by people who actually run businesses tells you all you need to know

58% of FTSE 100 companies have accountants running them. You're clearly wrong.

http://www.theglobalrecruiter.com/news/accountants-running-more-than-half-ftse-100-businesses/2875

 

[El Presidente]

In the real world let's say you stayed in that same house and the value of the house falls to the same price as a can of beans - how much did the house cost you? - that is the difference between the value of something and the cost of something.

The value of the shares that TB acquired may be the same as a can of beans but they sure as heck cost him £40M or £1 each.

No they didn't.

Let's say I lend you £40 million, and decide that the loan is never going to be recovered. I therefore ask you to do a poo in a bucket, and take that in lieu of the debt. It doesn't mean the poo has cost me £40 million, it simply means I have written off a £40 million debt.

TB may have tax reasons for converting the debt into shares, I don't know enough about his personal circumstances to comment, but he does not have shares worth £40 million.

 

[Creaky]

No they didn't.

Let's say I lend you £40 million, and decide that the loan is never going to be recovered. I therefore ask you to do a poo in a bucket, and take that in lieu of the debt. It doesn't mean the poo has cost me £40 million, it simply means I have written off a £40 million debt.

TB may have tax reasons for converting the debt into shares, I don't know enough about his personal circumstances to comment, but he does not have shares worth £40 million.

So you are writing off TB's ability to pull the finances of the club round at some time in the future - I think I have more faith in his abilities than that.

 

[Creaky]

58% of FTSE 100 companies have accountants running them. You're clearly wrong.

http://www.theglobalrecruiter.com/news/accountants-running-more-than-half-ftse-100-businesses/2875

Hmmmm

"According to financial recruiter Marks Sattin has said 58 per cent of the companies have an accountant or someone with financial services background running them compared to 24 per cent the mid 1990s. Fully qualified accounting chairman or CEOs, account for 40 per cent of FTSE100 company leaders"

Has that 58% been based on EITHER the chairman or CEO having a financial background? - if so then I'm not sure it would be good maths let alone good accountancy practice to claim that 58% of companies are run by someone with a financial background.