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Tuesday, October 06, 2009

Football League Meeting Thursday re Briatore/QPR

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David Conn/The Guardian - October 7, 2009

- If Football League is to pass its test, Flavio Briatore must fail hisThe 'fit and proper persons' meeting over QPR, Leeds and Notts County could be a benchmark for the game

- The Football League and its chairman Lord Mawhinney have earned deserved praise over the years for their efforts to introduce regulation and decency to a landscape which, particularly after ITV Digital's 2002 collapse, became a swamp prey to mismanagement and insolvency, even fraud. Mawhinney and his board, supported by the overwhelming majority of league clubs, have stood up strongly when imposing severe points penalties on clubs that have plunged into administration owing millions, then sought to emerge without the necessary 75% agreement of creditors.

- Yet tomorrow, the league faces probably the sternest examination of its regulatory backbone since it became the first football body, in 2004, to introduce a "fit and proper person test" for club directors and owners. That test, banning convicted fraudsters, bankrupts and directors of two football club insolvencies from being 30% owners or directors of clubs, set an upright standard, but has never really been tested. In a meeting that Mawhinney will chair tomorrow, the league's board will have on its agenda the application of the fit and proper person test to three clubs: Notts County, Leeds United and Queens Park Rangers.

- The Notts County issue is whether the league is satisfied that the new owners of the club, the investors in the Qadbak investment fund, which is registered in the tax-haven of the British Virgin Islands, of which little has been publicly revealed, have been identified sufficiently to the league to be passed as "fit and proper people."

- The Leeds United case poses particularly serious questions. As revealed in this column last week, the club's chairman, Ken Bates, has sworn a statement in a Jersey court saying he made an "error" when he previously said that he jointly owned the club's holding company, the Forward Sports Fund. In fact, his statement disclosed, Forward, registered in the tax-haven of then Cayman Islands, is owned by the holders of 10,000 shares, whom the fund's Swiss administrators have refused to identify.
- The league has in its files the names Leeds advanced as the club's owners after Forward took over the club, appointing Bates as the chairman, in January 2005, then again in 2007 when the fund bought Leeds out of a £35m administration. If Bates put himself forward to the league as a 50% owner, which he now says was an "error," Mawhinney and his board must consider whether Bates, and Leeds, breached the league's rules by failing to disclose the true owners. The league must also now ask the club to reveal who its true owners are, and they must be passed as "fit and proper."
- The league's rules state that every club must provide a list of all its directors, and holders of 30% or more of a club's shares, within 14 days of a takeover. Any club that fails to comply with that rule "shall be guilty of misconduct," the rules say, with penalties of "fixed fines". Any club that "intentionally or negligently" provides to the league a "false" declaration as to who its directors and owners are, is deemed "guilty of misconduct". The league has the power to bring disciplinary proceedings against a club and an individual director where that has happened.
- Leeds United and Bates, and his solicitor Mark Taylor, also a Leeds director, have refused to comment so far on how the "error" was made when Bates said he co-owned "management shares" in Forward, or to say who they submitted as the club's owners to the league.

- Of the three cases, the most clear cut appears to be the car crash that is Flavio Briatore. In November 2007, he became a QPR director and majority shareholder via his company, Sarita Capital Investments Inc, which is also registered in the British Virgin Islands. The minority stakes taken by Lakshmi Mittal and Bernie Ecclestone accorded QPR the unlikely status of world's richest club, which has not quite been merited by the limited investment that has followed.

- A fortnight ago, Briatore was hit with that swingeing ban by the World Motor Sport Council, which found that, as the principal of the Renault F1 team, he conspired with Pat Symonds, Renault's executive director of engineering, and the driver Nelson Piquet Jr, that Piquet would deliberately crash his car in the 2008 Singapore grand prix to seek advantage for Renault's other driver, Fernando Alonso. Briatore, according to the WMSC's written decision, "repeatedly insisted he had no knowledge of the affair," which it found was "a deliberate falsehood."

- In its verdict, the WMSC seemed to struggle adequately to express how beyond the pale this scandal was. As the team principal, it said, Briatore was in "the position of highest responsibility," and also Piquet's manager. "Mr Briatore manifestly did not guide Mr Piquet Jr appropriately," the judgment said, "and indeed allowed and seemingly encouraged him to engage in potentially ruinous and life-threatening activities."

- The Football League's "fit and proper persons test" bars people, besides fraudsters, bankrupts and serial insolvents, if they are: "Subject to a ban from involvement in the administration of a sport by a sports governing body or such other similar forms of disqualification as may operate from time to time."

- The ban on Briatore, declared by the WMSC, runs to a fat paragraph that seeks to be comprehensive and all-encompassing enough to reflect the enormity of what Briatore did. "For an unlimited period," it ruled, "the FIA does not intend to sanction any international event, championship, cup, trophy, challenge or series involving Mr Briatore in any capacity whatsoever, or grant any license to any team or other entity engaging Mr Briatore in any capacity whatsoever. It also hereby instructs all officials present at FIA-sanctioned events not to permit Mr Briatore access to any areas under the FIA's jurisdiction. Furthermore, it does not intend to grant or renew any superlicence granted to any driver who is associated (through a management contract or otherwise) with Mr Briatore, or any entity or individual associated with Mr Briatore."

- QPR's spokesman, Ian Taylor, said that neither Briatore nor any member of the club's board is making any public comment before the league meeting on Thursday. Since the WMSC decision was handed down, though, there have been suggestions that somehow this complete exclusion of Briatore from any FIA event, to the point of not physically allowing him in, still leaves him wriggle room to remain in football. The argument appears to be that Briatore has not been banned personally by the WMSC, just that other people have been banned from working with him, and that does not translate into him falling foul of the Football League's fit and proper person test.
- This reasoning appears to contradict both the total nature of the WMSC ban, and the catch-all wording of the Football League's own rule. It is difficult to see how the exclusion of Briatore by the FIA can amount to anything other than "a ban from involvement in the administration of a sport

- The Football League board must tomorrow make its decision in the public glare on these three clubs, whose circumstances ask different searching questions of the fit and proper person test. The time for congratulating itself just for having such a test has passed. Now the league must prove to the sporting world that it is serious, about upholding its rules to the letter, and being seen to do so. The Guardian

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