City's Ownership Raised In Parliament

Last updated : 27 February 2012 By Covsupport News Service

MP Damian Collins has spoken in Parliament about the problems faced by Coventry City supporters in knowing who actually owns the club.

Speaking in a debate about Football Governance on February 9th, Mr Collins was asked about the fit and proper persons test and the merits of great supporter involvement said: "I made some inquiries of the Football League about the ownership of Coventry City. It transpired that it is owned by an investment trust—a private equity firm. It is not known who the investors in that trust are. The Football League had to concede to me that to this day it does not know who owns the club.

"But many clubs in Coventry City’s position will have a management company—a holding company that runs the club—and a supporters’ trust may have a seat on that board. However, that is just a holding company. The ownership of the club is somewhere else completely, and that management company may not know who the owner is. It may deal with a businessman who represents the owners, but it may not know who the owners are.

"I recently had conversations with a businessman who was involved in running Sheffield Wednesday from the moment when it went into administration through to the period when it was taken over by Milan Mandaric. He described a series of potential investors coming forward, some of whom used fake names and identities. When non-disclosure agreements were signed, it turned out that the principal investors were based in the far east and were not who they originally seemed to be. The impression is created of a murky world where no one is quite who they say they are. People running clubs in this country who seek to sell them to a foreign investor to raise funds for the club may not know who they are dealing with.

"When I wrote to the Football League about Coventry City, I had a reply from Nick Craig, the director of legal affairs, who made a telling point:

“We have for some time expressed our concerns as regards investment vehicles (often offshore) and the issue of the lack of transparency surrounding ownership of them. Indeed we have previously sought assistance from DCMS and HMRC in that respect but to no avail. We are left in a position where we can regulate and seek to require clubs to comply but are reliant on self-declaration with no official means of independent verification.

That the proliferation of offshore investment trusts means we will never always be 100% certain in all cases but we continually assess the appropriateness of our rules in a changing environment.”

"There is not very much comfort there for any football fans concerned, because the Football League is saying that if a company is registered offshore and it buys a British football club, it does not have the authority or power to know who owns the club."

More on this http://www.publications.parliament.uk/pa/cm201212/cmhansrd/cm120209/halltext/120209h0001.htm