None of this is the fault of those two players. How much is Trevor Birch being paid? Perhaps he should work for nothing too?
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Will Pompey fold? (merged threads)
- Thread starter Brighton TID
- Start date
seagullsovergrimsby
#cpfctinpotclub
Latest Update on BBC sport:
BBC Sport - Euro 2012 Sportsday
1236:
FOOTBALL
Portsmouth are a step closer to coming out of administration after former owner Balram Chainrai's offer to take over at Fratton Park again was accepted.
I nearly fell off my chair laughing when I read about another £500k payment to creditors being made when Portsmouth returned to the Premier League , most of them will be dead before that happens
severnside gull
Well-known member
£40K (if it ever gets paid) on a debt of £40M is my understanding............................
BensGrandad
New member
I thought that Meridian ITV sports news said that the debts would be paid in full but I may have misheard it and just wished it.
severnside gull
Well-known member
Interesting read - a squad of 11 players but a wage bill of £9.5m!
http://www.portsmouth.co.uk/sport/pompey/pompey-past/birch-no-pompey-signings-until-players-depart-1
Staggering really on the same day that newly promoted Swindon were boasting of having one of the biggest budgets in League 1 at just £4m for a squad of around 25 players
http://www.portsmouth.co.uk/sport/pompey/pompey-past/birch-no-pompey-signings-until-players-depart-1
Staggering really on the same day that newly promoted Swindon were boasting of having one of the biggest budgets in League 1 at just £4m for a squad of around 25 players
Barrel of Fun
Abort, retry, fail
£40m paid by the tax payer for some precious memories for an assorted bunch of oiks to enjoy a double trip to Wembley. Nice.
He's an idiot. He desperately wants in to go wrong for us, and is clutching at straws. It wouldn't matter how the loan was worded, the fact is that Tony owns the club, he's not charging interest on the loan, and if he were selling it he'd decide how much he wants (which would include payment for the ground, training facilities, players, goodwill, whatever). The wording of whether the loan is shares or whatever is irrelevant.
Last edited:
severnside gull
Well-known member
Nothing (directly) to do with Portsmouth but everything that is wrong with football........
Middlesboro' chairman Steve Gibson today offering a few words of comfort to Glasgow Rangers who are planning to go into liquidation and re-form as a "new club" almost certainly without any penalty whatsoever........."Don't worry about the legal stuff - it's all paperwork behind the cscenes and after a few weeks you will just be able to carry on as normal. Rangers will continue as they did before and that's the important thing."
The day after the new EPL television deal is announced with reports that earnings for a Premier League player may increase to an average £350K a week as a result, I really genuinely do despair
YOU COULDN'T MAKE IT UP: THE GOOGLE AD AT THE TOP OF THIS PAGE AS I TYPE...................................."How to Declare Bankruptcy"
Middlesboro' chairman Steve Gibson today offering a few words of comfort to Glasgow Rangers who are planning to go into liquidation and re-form as a "new club" almost certainly without any penalty whatsoever........."Don't worry about the legal stuff - it's all paperwork behind the cscenes and after a few weeks you will just be able to carry on as normal. Rangers will continue as they did before and that's the important thing."
The day after the new EPL television deal is announced with reports that earnings for a Premier League player may increase to an average £350K a week as a result, I really genuinely do despair
YOU COULDN'T MAKE IT UP: THE GOOGLE AD AT THE TOP OF THIS PAGE AS I TYPE...................................."How to Declare Bankruptcy"
The day after the new EPL television deal is announced with reports that earnings for a Premier League player may increase to an average £350K a week as a result, I really genuinely do despair
YOU COULDN'T MAKE IT UP: THE GOOGLE AD AT THE TOP OF THIS PAGE AS I TYPE...................................."How to Declare Bankruptcy"
This season is a VERY good season to get promoted to the Premiership, a few teams will throw some money about this summer. That new TV deal is sickening.
I've held Gibson in reasonable regard previously. In the space of one utterly disgusting quote, he's just dropped to a level in my estimations alongside Phil Gartside.
severnside gull
Well-known member
that is so much a certainty that I think I am revising my aspirations for this season - we will not spend money willy-nilly so I reckon we may have to settle for lower mid table at best.
seagullsovergrimsby
#cpfctinpotclub
I would settle for a mid table finish but only on the proviso that Palace get relegated and fail to go into administration before the cut off date and incur a 30 points deduction the following season for doing it the 3rd time.
seagullsovergrimsby
#cpfctinpotclub
Some more news from yesterday evening :Pompey face liquidation in five weeks if the high earners don’t quit club - Pompey Past - Portsmouth News
- Jul 7, 2003
- 47,639
Sounds like scare tactics designed to get the fans putting pressure on the likes of Ben Haim & Kanu.
Barnham Seagull
Yapton Actually
http://www.telegraph.co.uk/sport/foo...continues.html
Portsmouth’s storm-tossed creditors will trudge wearily into the Victory Lounge at Fratton Park on Monday with a sinking feeling all too familiar to them.
It was in exactly the same venue, two years and a week before, that creditors last heard proposals from an administrator restructuring the club after insolvency. Then, Pompey had become the only Premier League side ever to be declared insolvent while still playing in the top flight; now they do so while preparing for a season in League One.
This ignominious spiral has had big repercussions in the local community. When Portsmouth last emerged from administration creditors like the local carpet cleaner were promised payment in full on all claims of less than £2,500; everyone else was promised 20p in the pound on the club’s debt to them.
“I’ve never been paid,” said Mike Aldridge, whose Carpet & General Cleaning was owed £792.66 when the club called in receivers in 2010.
“It’s very disappointing. They owed us money and we’re a small local firm. We were promised that all claims under £2,500 would be paid but we’ve never seen a penny.”
It is a measure of the power of the local football club that some small creditors refused to identify themselves. But every one of those Telegraph Sport spoke to said the same thing: in the two years since Portsmouth last came out of administration they have received nothing.
Aqua Cars, owed £5,623.04 from unpaid invoices, made it plain. “They owed us money and because it’s Pompey Football Club we let it go six or seven months without them paying us,” said Bruce Hall, Aqua’s general manager.
“By the time Christmas came, with all their staff parties, they were trying to get taxis on account.
“I just stopped the work. The amount of times I went in personally and spoke to the accounts department with invoices in my hand.
“And there’s a knock-on effect. Another company owes me and he can’t pay me because Portsmouth took him for more than 100 grand.”
Creditors have seen what they were owed slashed almost to nothing by the latest insolvency process. Whether they will even bother to go through the same dispiriting circus in the Victory Lounge, only two years since the last time, remains to be seen.
What is clear is that many of Portsmouth’s current problems can be traced back to what was discussed at the creditors’ meeting on 17 June 2010.
Andrew Andronikou, the administrator of Pompey’s insolvent UK parent company, Portsmouth City Football Club, informed creditors that the total unsecured claims against the club amounted to almost £132.8 million.
For the purposes of the creditor voluntary arrangement (CVA) agreed at that meeting there were £83.3 million of verifiable claims. In addition there were £22.4 million of football creditors.
The latter would be paid in full, and directly from the Premier League’s parachute payments following Portsmouth’s 2010 relegation from the top flight.
In common with every other football insolvency, it meant millionaire players were given their full dues (Kanu, Tal Ben Haim and Papa Bouba Diop could share £9.2 million; Sol Campbell, David James and Peter Crouch almost £2.3 million more). Others were not so lucky: while the football creditors filled their ladles from the insolvency soup, the rest had to make do with the meagre pickings left over.
The CVA meeting agreed that 20p in the pound on the £83.3 million owed to the unsecured creditors would be repaid after a deal was struck for Balram Chainrai to take over the club.
It reduced the debt to about £16.5 million, repayable in installments over three years between April 2012 and June 2015.
Andronikou confidently told creditors they could “anticipate” in the coming months £3 million to be paid in to the CVA pot from player transfers. In reality, it did not turn out like that.
When in March 2011 Andronikou filed his CVA completion report to creditors, he acknowledged that £3 million had been generated in player sales as 11 players departed, the highest profile of whom was Kevin-Prince Boateng, in a move to Milan, via Genoa. But it did not accrue to the creditors as “anticipated”.
“Any player sale contribution to the CVA, whether £3 million or otherwise, was clearly only ‘anticipated’ and not in any way guaranteed or included as a condition of the CVA,” wrote Andronikou.
“Those monies could not be considered a guaranteed contribution towards the CVA. This is apparent within the wording of the CVA.”
Andronikou has told Telegraph Sport he lays the blame for this outcome squarely at the feet of Convers Sport Initiatives, the investment company belonging to Vladimir Antonov that bought Portsmouth from Chainrai 12 months ago.
“We produced business cash flows and a plan for the Football League,” he said. “The League wouldn’t have allowed the exit from administration if we couldn’t pay the CVA.
“But the new board copied the mistakes of the previous company. They just played football without making any provision for the CVA debt. The money went to players and agents. The same, usual reasons. On what basis did they not have to pay their creditors?”
In fact the instalments to creditors were not due to be paid until 10 months after the CVA was agreed, giving ample time for the club to fail.
By passing Portsmouth over to CSI, Chainrai — who Andronikou says had been funding the club with “£200,000 to £300,000 a month” —got out before the first lump of almost £1.25 million was due on April Fool’s Day this year. By then football’s reflex recklessness had long taken hold.
The football creditors’ rule guaranteed players’ wage claims would be paid in full and so they were not significantly renegotiated.
It saddled Pompey with Premier League salary liabilities on a much-reduced turnover. Moreover, with relegation to the Championship, the historical football creditors would swallow the rump of the Premier League parachute payments, reducing incomes still further.
More damaging even than that was how the sale-and-purchase agreement struck by Andronikou with Balram Chainrai, and approved by the High Court, allowed Chainrai and his partner, Levi Kushnir, to transfer their £14.2 million debenture to a new parent company, Portsmouth Football Club (2010) Limited, which they would own.
It left the club’s UK parent company with an insolvent balance sheet even as it started life. No one should be surprised that the new company is also now in administration.
Although it was CSI’s management that tipped the club into insolvency, Chainrai and Kushnir’s lending might also be termed somewhat reckless.
In February 2010 the book value of Fratton Park, which those with knowledge of the situation say is in practice worthless if a football club is not playing there, was stated at £7.7 million.
If they did not already know, Chainrai and Kushnir were informed when the insolvent club’s statement of affairs was released to creditors in July 2010 that their loans to the club grossly exceeded the value of the assets they were secured against.
With the UK economy tanking, most football clubs were finding their lenders — high-street banks for the most part — were unwinding their loan facilities. Not Chainrai and Kushnir’s British Virgin Islands-registered vehicle, Portpin.
According to Portsmouth (2010)’s management accounts shortly before it plunged into administration in February this year, about £215,000 had been spent on “premises improvements” to Fratton Park since the last administration. Yet the stadium’s net book value was now stated as being about £13.2 million.
Whether or not that massive rise in the asset price represented fair value is questionable. It is also pretty much irrelevant, since whatever the true value it was still outweighed by the size of Portpin’s debenture, which had by now grown to £18.6 million.
“The debt to Portpin is significantly greater than any valuation of the land under existing use or alternative use,” wrote Portsmouth (2010)’s administrator, Trevor Birch, in his statement of affairs to creditors in April.
How Portpin came to be involved in Portsmouth in the first place is puzzling. Chainrai’s spokesman at the time said he had been introduced to the club by the agent Pini Zahavi. Yet it was an odd choice for an investment, given the history between Chainrai, Kushnir and the family of Pompey’s former owner.
Chainrai and Kushnir were at one time business partners of the controversial Russo-Israeli Arkady Gaydamak. According to a contemporaneous report in the Jerusalem Post, Gaydamak was ordered by a Tel Aviv court to pay Kushnir and Chainrai almost $27 million after resiling from a contract to buy shares in Ameris, an Israeli company they had founded.
That was September 2009; on 6 October 2009 Portpin plunged those hard-won millions into Portsmouth, which had until recently belonged to Gaydamak’s son, Sacha, and was already suffering massive financial and football difficulties.
Gaydamak’s distressed sale of the club to Suleiman Al Fahim had been announced in July 2009, at a time when his father’s creditors were closing in on his assets in Israel.
Al Fahim also failed to raise capital to fund the club and control was handed to Ali Al Faraj, a Saudi no one ever saw but whose representatives seemed to have links back to Gaydamak senior.
Peter Storrie, Sacha Gaydamak’s long-term Pompey lieutenant, was said to have brought Al Faraj to the table. Among his advisers was Daniel Azougy, a former lawyer from Israel and another with links to Gaydamak senior. And all the while Portpin’s debenture was attached to the club.
Chaos ensued. As Portsmouth was passed between Al Fahim, Al Faraj, and ultimately to administrators, its liabilities mounted while incomes fell.
When Portpin’s money had come in Chainrai was described as the “saviour” who forestalled administration. But the loan advanced in October 2009, and added to since, has in all its incarnations contributed to the indebtedness that has forced Portsmouth into administration twice in two years.
As Andronikou attests, the most recent failure came after funding from CSI dried up and it had to call in an administrator last year. Coincidentally, that administrator also happened to be Andronikou, who wrote in his statement of proposals for CSI in January: “In November 2011 [CSI’s] major shareholder, Vladimir Antonov, was detained by the UK authorities in connection with the disappearance of circa £200 million from AB Bank Snoras, a Lithuania-based bank.
“Antonov is the majority shareholder of the bank which was placed into temporary administration, which resulted in investigations into Antonov’s financial affairs.”
Antonov denies any allegations of wrongdoing.
How CSI managed Portsmouth is entirely unconnected to the Lithuanian allegations but Andronikou’s view, that the methods were cavalier to say the least, is clear.
It is impossible to see what happened to the £3 million in transfer income “anticipated” to go to creditors through the CVA. Or how Pompey ran such big cash-flow deficits as to require millions of pounds in extra funding from Portpin.
Or indeed how the £10.5 million in unsecured loans injected by CSI were spent, because no accounts have been filed for any of the club’s UK parents since those for the year ending May 2008.
(That Birch’s accountancy firm PKF is now the administrator of the insolvent club having been engaged as its auditor prior to Portsmouth’s most recent collapse —though it never completed a statutory audit — is another notable element of the saga.)
According to Andronikou, CSI’s strategy was to acquire a number of sports interests to raise its profile. How it intended to make money is not obvious, but at least one thing is: that UK insolvency law has always accorded much control over Portsmouth to Portpin.
Its loan is a “fixed and floating charge” enabling Portpin to call in its debt at any time. This gives it a power of life and death over Pompey, since the club could never afford to raise £18.6 million at a stroke.
Football regulators recognise this effectively makes shadow directors at Portsmouth out of Portpin’s investors, but the rules relating to shareholders and directors cannot be applied since the relationship appears to be at arms’ length.
The absence of the statutory annual report and accounts, coupled with the fact that Portpin is registered in the secrecy jurisdiction of the British Virgin Islands, have made transparency impossible to achieve.
Last month Chainrai was announced as the only bidder for Portsmouth, and so he remained until the local Supporters’ Trust lodged its own counterbid on Friday.
The dearth of takers was always a likely outcome of the current administration, since any external buyer wanting to keep Pompey at their historical home would first have to satisfy Portpin’s secured loan over Fratton Park.
Like the protected football creditors, and despite the multimillion-pound gap between the value of the stadium and the size of his loan secured against it, Chainrai could still legally demand every penny be repaid to him. Interested parties understandably walked away.
The only alternative is for Birch, as the administrator and an officer of the court, to take the bold step of persuading a judge to let him sell Fratton Park “as if it were not subject to the security”, as is provided for under the Insolvency Act.
Birch made noises on Friday that he may do exactly that but the clock is against him: the season cycles inflict different timescales on football administrations than in normal businesses and a court application against Chainrai’s debenture could set in train a long legal process.
If Chainrai’s bid, on which a vote will be taken on Monday, is not successfully challenged over the coming weeks it will be the third time Chainrai has owned the club.
“I always said I would not let the club be liquidated,” he said. “I’m a businessman but I realise that the club will only have value if it is successful. I now want to turn things around at Portsmouth and see the club regain its rightful position.”
If he takes over Pompey and restructures it effectively Chainrai is right to be bullish. Birch estimates that on current numbers the club’s total liabilities are up to £11 million, but there is £13 million still due to the club from Premier League parachute payments.
Chainrai’s offer to the unsecured creditors amounts to £500,000 (promotion to the Premier League within five years would earn another £500,000).
If the CVA is agreed on Monday and not successfully countered by another offer Portsmouth will have legitimately shed £107.3 million in debts in two years — up to £40.1 million of it to the UK taxman — and, according to Andronikou, without having paid a penny on them.
“It’s a hard one because I’m a Pompey fan but I’d rather have that money in my bank account,” said Aldridge.
Once again, though, Chainrai might again assign the Portpin debenture to the new company when it starts life. If Aldridge’s club is ever to “regain its rightful position” Portsmouth fans must hope Portpin removes that millstone from around its neck.
Portsmouth’s storm-tossed creditors will trudge wearily into the Victory Lounge at Fratton Park on Monday with a sinking feeling all too familiar to them.
It was in exactly the same venue, two years and a week before, that creditors last heard proposals from an administrator restructuring the club after insolvency. Then, Pompey had become the only Premier League side ever to be declared insolvent while still playing in the top flight; now they do so while preparing for a season in League One.
This ignominious spiral has had big repercussions in the local community. When Portsmouth last emerged from administration creditors like the local carpet cleaner were promised payment in full on all claims of less than £2,500; everyone else was promised 20p in the pound on the club’s debt to them.
“I’ve never been paid,” said Mike Aldridge, whose Carpet & General Cleaning was owed £792.66 when the club called in receivers in 2010.
“It’s very disappointing. They owed us money and we’re a small local firm. We were promised that all claims under £2,500 would be paid but we’ve never seen a penny.”
It is a measure of the power of the local football club that some small creditors refused to identify themselves. But every one of those Telegraph Sport spoke to said the same thing: in the two years since Portsmouth last came out of administration they have received nothing.
Aqua Cars, owed £5,623.04 from unpaid invoices, made it plain. “They owed us money and because it’s Pompey Football Club we let it go six or seven months without them paying us,” said Bruce Hall, Aqua’s general manager.
“By the time Christmas came, with all their staff parties, they were trying to get taxis on account.
“I just stopped the work. The amount of times I went in personally and spoke to the accounts department with invoices in my hand.
“And there’s a knock-on effect. Another company owes me and he can’t pay me because Portsmouth took him for more than 100 grand.”
Creditors have seen what they were owed slashed almost to nothing by the latest insolvency process. Whether they will even bother to go through the same dispiriting circus in the Victory Lounge, only two years since the last time, remains to be seen.
What is clear is that many of Portsmouth’s current problems can be traced back to what was discussed at the creditors’ meeting on 17 June 2010.
Andrew Andronikou, the administrator of Pompey’s insolvent UK parent company, Portsmouth City Football Club, informed creditors that the total unsecured claims against the club amounted to almost £132.8 million.
For the purposes of the creditor voluntary arrangement (CVA) agreed at that meeting there were £83.3 million of verifiable claims. In addition there were £22.4 million of football creditors.
The latter would be paid in full, and directly from the Premier League’s parachute payments following Portsmouth’s 2010 relegation from the top flight.
In common with every other football insolvency, it meant millionaire players were given their full dues (Kanu, Tal Ben Haim and Papa Bouba Diop could share £9.2 million; Sol Campbell, David James and Peter Crouch almost £2.3 million more). Others were not so lucky: while the football creditors filled their ladles from the insolvency soup, the rest had to make do with the meagre pickings left over.
The CVA meeting agreed that 20p in the pound on the £83.3 million owed to the unsecured creditors would be repaid after a deal was struck for Balram Chainrai to take over the club.
It reduced the debt to about £16.5 million, repayable in installments over three years between April 2012 and June 2015.
Andronikou confidently told creditors they could “anticipate” in the coming months £3 million to be paid in to the CVA pot from player transfers. In reality, it did not turn out like that.
When in March 2011 Andronikou filed his CVA completion report to creditors, he acknowledged that £3 million had been generated in player sales as 11 players departed, the highest profile of whom was Kevin-Prince Boateng, in a move to Milan, via Genoa. But it did not accrue to the creditors as “anticipated”.
“Any player sale contribution to the CVA, whether £3 million or otherwise, was clearly only ‘anticipated’ and not in any way guaranteed or included as a condition of the CVA,” wrote Andronikou.
“Those monies could not be considered a guaranteed contribution towards the CVA. This is apparent within the wording of the CVA.”
Andronikou has told Telegraph Sport he lays the blame for this outcome squarely at the feet of Convers Sport Initiatives, the investment company belonging to Vladimir Antonov that bought Portsmouth from Chainrai 12 months ago.
“We produced business cash flows and a plan for the Football League,” he said. “The League wouldn’t have allowed the exit from administration if we couldn’t pay the CVA.
“But the new board copied the mistakes of the previous company. They just played football without making any provision for the CVA debt. The money went to players and agents. The same, usual reasons. On what basis did they not have to pay their creditors?”
In fact the instalments to creditors were not due to be paid until 10 months after the CVA was agreed, giving ample time for the club to fail.
By passing Portsmouth over to CSI, Chainrai — who Andronikou says had been funding the club with “£200,000 to £300,000 a month” —got out before the first lump of almost £1.25 million was due on April Fool’s Day this year. By then football’s reflex recklessness had long taken hold.
The football creditors’ rule guaranteed players’ wage claims would be paid in full and so they were not significantly renegotiated.
It saddled Pompey with Premier League salary liabilities on a much-reduced turnover. Moreover, with relegation to the Championship, the historical football creditors would swallow the rump of the Premier League parachute payments, reducing incomes still further.
More damaging even than that was how the sale-and-purchase agreement struck by Andronikou with Balram Chainrai, and approved by the High Court, allowed Chainrai and his partner, Levi Kushnir, to transfer their £14.2 million debenture to a new parent company, Portsmouth Football Club (2010) Limited, which they would own.
It left the club’s UK parent company with an insolvent balance sheet even as it started life. No one should be surprised that the new company is also now in administration.
Although it was CSI’s management that tipped the club into insolvency, Chainrai and Kushnir’s lending might also be termed somewhat reckless.
In February 2010 the book value of Fratton Park, which those with knowledge of the situation say is in practice worthless if a football club is not playing there, was stated at £7.7 million.
If they did not already know, Chainrai and Kushnir were informed when the insolvent club’s statement of affairs was released to creditors in July 2010 that their loans to the club grossly exceeded the value of the assets they were secured against.
With the UK economy tanking, most football clubs were finding their lenders — high-street banks for the most part — were unwinding their loan facilities. Not Chainrai and Kushnir’s British Virgin Islands-registered vehicle, Portpin.
According to Portsmouth (2010)’s management accounts shortly before it plunged into administration in February this year, about £215,000 had been spent on “premises improvements” to Fratton Park since the last administration. Yet the stadium’s net book value was now stated as being about £13.2 million.
Whether or not that massive rise in the asset price represented fair value is questionable. It is also pretty much irrelevant, since whatever the true value it was still outweighed by the size of Portpin’s debenture, which had by now grown to £18.6 million.
“The debt to Portpin is significantly greater than any valuation of the land under existing use or alternative use,” wrote Portsmouth (2010)’s administrator, Trevor Birch, in his statement of affairs to creditors in April.
How Portpin came to be involved in Portsmouth in the first place is puzzling. Chainrai’s spokesman at the time said he had been introduced to the club by the agent Pini Zahavi. Yet it was an odd choice for an investment, given the history between Chainrai, Kushnir and the family of Pompey’s former owner.
Chainrai and Kushnir were at one time business partners of the controversial Russo-Israeli Arkady Gaydamak. According to a contemporaneous report in the Jerusalem Post, Gaydamak was ordered by a Tel Aviv court to pay Kushnir and Chainrai almost $27 million after resiling from a contract to buy shares in Ameris, an Israeli company they had founded.
That was September 2009; on 6 October 2009 Portpin plunged those hard-won millions into Portsmouth, which had until recently belonged to Gaydamak’s son, Sacha, and was already suffering massive financial and football difficulties.
Gaydamak’s distressed sale of the club to Suleiman Al Fahim had been announced in July 2009, at a time when his father’s creditors were closing in on his assets in Israel.
Al Fahim also failed to raise capital to fund the club and control was handed to Ali Al Faraj, a Saudi no one ever saw but whose representatives seemed to have links back to Gaydamak senior.
Peter Storrie, Sacha Gaydamak’s long-term Pompey lieutenant, was said to have brought Al Faraj to the table. Among his advisers was Daniel Azougy, a former lawyer from Israel and another with links to Gaydamak senior. And all the while Portpin’s debenture was attached to the club.
Chaos ensued. As Portsmouth was passed between Al Fahim, Al Faraj, and ultimately to administrators, its liabilities mounted while incomes fell.
When Portpin’s money had come in Chainrai was described as the “saviour” who forestalled administration. But the loan advanced in October 2009, and added to since, has in all its incarnations contributed to the indebtedness that has forced Portsmouth into administration twice in two years.
As Andronikou attests, the most recent failure came after funding from CSI dried up and it had to call in an administrator last year. Coincidentally, that administrator also happened to be Andronikou, who wrote in his statement of proposals for CSI in January: “In November 2011 [CSI’s] major shareholder, Vladimir Antonov, was detained by the UK authorities in connection with the disappearance of circa £200 million from AB Bank Snoras, a Lithuania-based bank.
“Antonov is the majority shareholder of the bank which was placed into temporary administration, which resulted in investigations into Antonov’s financial affairs.”
Antonov denies any allegations of wrongdoing.
How CSI managed Portsmouth is entirely unconnected to the Lithuanian allegations but Andronikou’s view, that the methods were cavalier to say the least, is clear.
It is impossible to see what happened to the £3 million in transfer income “anticipated” to go to creditors through the CVA. Or how Pompey ran such big cash-flow deficits as to require millions of pounds in extra funding from Portpin.
Or indeed how the £10.5 million in unsecured loans injected by CSI were spent, because no accounts have been filed for any of the club’s UK parents since those for the year ending May 2008.
(That Birch’s accountancy firm PKF is now the administrator of the insolvent club having been engaged as its auditor prior to Portsmouth’s most recent collapse —though it never completed a statutory audit — is another notable element of the saga.)
According to Andronikou, CSI’s strategy was to acquire a number of sports interests to raise its profile. How it intended to make money is not obvious, but at least one thing is: that UK insolvency law has always accorded much control over Portsmouth to Portpin.
Its loan is a “fixed and floating charge” enabling Portpin to call in its debt at any time. This gives it a power of life and death over Pompey, since the club could never afford to raise £18.6 million at a stroke.
Football regulators recognise this effectively makes shadow directors at Portsmouth out of Portpin’s investors, but the rules relating to shareholders and directors cannot be applied since the relationship appears to be at arms’ length.
The absence of the statutory annual report and accounts, coupled with the fact that Portpin is registered in the secrecy jurisdiction of the British Virgin Islands, have made transparency impossible to achieve.
Last month Chainrai was announced as the only bidder for Portsmouth, and so he remained until the local Supporters’ Trust lodged its own counterbid on Friday.
The dearth of takers was always a likely outcome of the current administration, since any external buyer wanting to keep Pompey at their historical home would first have to satisfy Portpin’s secured loan over Fratton Park.
Like the protected football creditors, and despite the multimillion-pound gap between the value of the stadium and the size of his loan secured against it, Chainrai could still legally demand every penny be repaid to him. Interested parties understandably walked away.
The only alternative is for Birch, as the administrator and an officer of the court, to take the bold step of persuading a judge to let him sell Fratton Park “as if it were not subject to the security”, as is provided for under the Insolvency Act.
Birch made noises on Friday that he may do exactly that but the clock is against him: the season cycles inflict different timescales on football administrations than in normal businesses and a court application against Chainrai’s debenture could set in train a long legal process.
If Chainrai’s bid, on which a vote will be taken on Monday, is not successfully challenged over the coming weeks it will be the third time Chainrai has owned the club.
“I always said I would not let the club be liquidated,” he said. “I’m a businessman but I realise that the club will only have value if it is successful. I now want to turn things around at Portsmouth and see the club regain its rightful position.”
If he takes over Pompey and restructures it effectively Chainrai is right to be bullish. Birch estimates that on current numbers the club’s total liabilities are up to £11 million, but there is £13 million still due to the club from Premier League parachute payments.
Chainrai’s offer to the unsecured creditors amounts to £500,000 (promotion to the Premier League within five years would earn another £500,000).
If the CVA is agreed on Monday and not successfully countered by another offer Portsmouth will have legitimately shed £107.3 million in debts in two years — up to £40.1 million of it to the UK taxman — and, according to Andronikou, without having paid a penny on them.
“It’s a hard one because I’m a Pompey fan but I’d rather have that money in my bank account,” said Aldridge.
Once again, though, Chainrai might again assign the Portpin debenture to the new company when it starts life. If Aldridge’s club is ever to “regain its rightful position” Portsmouth fans must hope Portpin removes that millstone from around its neck.
Working class pride
Banned
- Feb 14, 2010
- 4,932
Why anyone lends money to football clubs is beyond me.
Certainly those that have previous. I guess most of the credit is HMRC (that hasn't loaned anything) and the owner, who's just on the take.
- Jul 7, 2003
- 47,639
Fascinating that the nation is up in arms over individuals (Jimmy Carr & friends) electing to avoid a couple of million in taxes, yet HMRC just write off nearly £50 million unpaid by Lower League Pompey with barely more than a whimper.
I know which pisses me off more, and it's not some smart arse panel show presenter.
I know which pisses me off more, and it's not some smart arse panel show presenter.
maltaseagull
Well-known member
Agreed, it isn't the fans fault any more than we were responsible for the troubles in our past. There by the grace etc