mathare
12th January 2010, 12:07
I'm sure MattR will correct me if any of this is wrong but I received an email this morning spelling out the situation at Portsmouth, which I found interesting as I had been struggling to keep up with who owns what and what this all means. Here's what I received:
"The club are 90 per cent owned by Falcondrone Ltd, a company
registered in the British Virgin Islands owned outright by Ali Al-
Faraj, a Saudi Arabian whose family wealth is understood to derive
from an international property portfolio and supply contracts to
the Saudi Army.
Faraj tried to buy the club in August but his offer was rejected by
Sacha Gaydamak, who sold instead to Dubai-based businessman
Sulaiman Al Fahim. Faraj took control six weeks later when Fahim,
who controls the remaining 10 per cent, failed to pay the players'
wages.
The Premier League is satisfied that Faraj, who has never been to
Fratton Park or seen Portsmouth play is the ultimate owner of
Falcondrone Ltd and he has passed the fit-and-proper persons test.
The League has raised concerns about some of his advisers.
One of those advisers is Daniel Azougy, a lawyer with multiple
fraud convictions, who is managing the club's finances and leading
the search for investment. The Premier League has sought assurances
that Azougy, whose convictions prevent him from taking a seat on
the board, is not operating as a "shadow director."
Faraj can not personally bail out the club's £60 million worth of
debts, he is hoping to refinance the club with fresh investment
from third parties. This process has been hampered by serious
doubts over the club's viability, as well as the state of the
credit markets.
The fans are asking whether Faraj has put any money into the club -
the answer is 'yes.'
Since taking over, the new owner has directed around £20 million
into the club, paying off various debts including more than £9
million owed to HMRC. Sources close to Faraj say that some of the
money has come directly from the owner but the majority, around £17
million, has come in the form of loans from Hong Kong-based
businessman Balram Chainrai. Those loans are secured against
Fratton Park, effectively giving Chainrai control over the ground.
Chainrai is a British citizen of Nepali extraction whose wealth
derives from consumer electronics. He has attended several games,
home and away.
The former Portsmouth owner Sacha Gaydamak is owed £28 million,
with £9 million payable at the end of this month and the balance in
May 2012. Gaydamak refused to sell the club to Faraj in the summer,
and has raised questions over the true ownership of the club.
Gaydamak cannot afford to tip the club into administration and risk
not being paid off, so as security he has retained ownership of a
crucial piece of land adjacent to Fratton Park, without which the
ground cannot be redeveloped. Negotiations over that land will be
central to Portsmouth's future.
If you are wondering why on earth Faraj ever bought the club - the
number of property developers involved suggests that this might
have been a land deal that has been undermined by a failure to
grasp the full extent of the problems. The new owners may have
banked on receiving all of the television revenue due from Sky
without realising that the Premier League could withhold it to
settle debts to football creditors.
The end is nigh?
The imminent threat to the club is the winding-up order issued by
HMRC. It is due to be heard in the High Court on Feb 10, giving the
club a month to satisfy those debts.
If they fail then the court could be asked to appoint an
administrator to recoup what it is owed. Administration would
trigger a nine-point penalty, but the Premier League believes the
club will be able to complete their 2009-2010 fixtures."
It all sounds like a proper mess that is unlikely to be sorted out to everyone's satisfaction any time in the near future, unfortunately.
"The club are 90 per cent owned by Falcondrone Ltd, a company
registered in the British Virgin Islands owned outright by Ali Al-
Faraj, a Saudi Arabian whose family wealth is understood to derive
from an international property portfolio and supply contracts to
the Saudi Army.
Faraj tried to buy the club in August but his offer was rejected by
Sacha Gaydamak, who sold instead to Dubai-based businessman
Sulaiman Al Fahim. Faraj took control six weeks later when Fahim,
who controls the remaining 10 per cent, failed to pay the players'
wages.
The Premier League is satisfied that Faraj, who has never been to
Fratton Park or seen Portsmouth play is the ultimate owner of
Falcondrone Ltd and he has passed the fit-and-proper persons test.
The League has raised concerns about some of his advisers.
One of those advisers is Daniel Azougy, a lawyer with multiple
fraud convictions, who is managing the club's finances and leading
the search for investment. The Premier League has sought assurances
that Azougy, whose convictions prevent him from taking a seat on
the board, is not operating as a "shadow director."
Faraj can not personally bail out the club's £60 million worth of
debts, he is hoping to refinance the club with fresh investment
from third parties. This process has been hampered by serious
doubts over the club's viability, as well as the state of the
credit markets.
The fans are asking whether Faraj has put any money into the club -
the answer is 'yes.'
Since taking over, the new owner has directed around £20 million
into the club, paying off various debts including more than £9
million owed to HMRC. Sources close to Faraj say that some of the
money has come directly from the owner but the majority, around £17
million, has come in the form of loans from Hong Kong-based
businessman Balram Chainrai. Those loans are secured against
Fratton Park, effectively giving Chainrai control over the ground.
Chainrai is a British citizen of Nepali extraction whose wealth
derives from consumer electronics. He has attended several games,
home and away.
The former Portsmouth owner Sacha Gaydamak is owed £28 million,
with £9 million payable at the end of this month and the balance in
May 2012. Gaydamak refused to sell the club to Faraj in the summer,
and has raised questions over the true ownership of the club.
Gaydamak cannot afford to tip the club into administration and risk
not being paid off, so as security he has retained ownership of a
crucial piece of land adjacent to Fratton Park, without which the
ground cannot be redeveloped. Negotiations over that land will be
central to Portsmouth's future.
If you are wondering why on earth Faraj ever bought the club - the
number of property developers involved suggests that this might
have been a land deal that has been undermined by a failure to
grasp the full extent of the problems. The new owners may have
banked on receiving all of the television revenue due from Sky
without realising that the Premier League could withhold it to
settle debts to football creditors.
The end is nigh?
The imminent threat to the club is the winding-up order issued by
HMRC. It is due to be heard in the High Court on Feb 10, giving the
club a month to satisfy those debts.
If they fail then the court could be asked to appoint an
administrator to recoup what it is owed. Administration would
trigger a nine-point penalty, but the Premier League believes the
club will be able to complete their 2009-2010 fixtures."
It all sounds like a proper mess that is unlikely to be sorted out to everyone's satisfaction any time in the near future, unfortunately.