The Football League, led by Chairman Brian Mawhinney, has led the way in England in some respects in steps towards more enlightened governance of the game for some years now, as we have commented on before.
Notably, the Football League was the first in England to require clubs to reveal their payments to agents, a move which has not entirely uncoincidentally seen those payments cut in half.
The Football League was also the first to introduce a “fit and proper persons” test for club owners and directors to prevent, for example, those who have taken more than one club to bankruptcy before or who have criminal convictions for fraud from being a director of a club.
But in one important area, the Football League’s fit and proper persons test has fallen down: it does not require owners to reveal in public who they are. Given last year’s fiasco at Notts County, that seems like a mistake.
Indeed, just a few months ago, Mawhinney said “I would like total transparency. That’s me personally and I think we’re on a journey towards that point.”
Unfortunately, as the case of Leeds United shows, the League is some way off from what ought to be the most basic requirement of an owner of a football club.The club are owned 100% by a Cayman Islands registered ownership firm known as Forward Sports Fund. Who is behind that company remains a mystery,
As David Conn reports today, Leeds’ offshore owners have been approved as “fit and proper” even though their identity remains a secret, a decision condemned by both the government and fans’ organisations.
The Premier League does now require its clubs to publish the names of all shareholders with stakes of 10% or more, but the Football League does not. Instead, clubs must tell the League’s chairman, Lord Mawhinney, and three other senior executives, who the ultimate owners are, but the information is not made public.
Leeds have declined requests from the Guardian, following the League’s ratification, to say who the ultimate owners are. The only response this week came from Peter Boatman of Château Fiduciare, the Geneva-based financial administrator of Leeds’ holding company, Forward Sports Fund. “It is not necessary for you to have that information,” he said.
The politicians were joined by the Leeds United Supporters Club, the national Football Supporters’ Federation and Supporters Direct in calling for League clubs’ owners to be publicly identified. “Like all football clubs, Leeds United’s character is that of a public institution wrapped in a privately owned business and that creates a mismatch,” said Dave Boyle, the chief executive of Supporters Direct. “The authorities can recognise that public nature by sending a clear message: you can remain a private anonymous citizen, and you can own a football club, but you cannot do both.”
The importance of this isn’t just a matter of principle; it was Conn’s own investigation into Leeds’ mysterious ownership structure that led the Football League to seek clarification from the club, as he goes on to explain:
The League’s approval of Leeds’ owners follows inquiries it began in October after the Guardian revealed that the club’s chairman, Ken Bates, had revised his account of its ownership at a court case in Jersey. In January last year, Bates’ solicitors told Jersey’s royal court, which is hearing a dispute between Leeds and a finance company, Admatch, that he and his long term financial adviser, Patrick Murrin, jointly owned “management shares” in the club’s holding company, the Forward Sports Fund. In May, Bates swore an affidavit stating that the previous statement had been “not correct” and “an error on my part”. In fact, he stated, he did not own a management share in FSF. The affidavit attached a letter from Château Fiduciare, which said FSF had 10,000 shares, owned by shareholders who have not been named.
The League confirmed it had written to Leeds seeking clarification because directors and 30% shareholders in its clubs must be identified to it and passed as fit and proper people who have no recent criminal convictions and have not run a football club into insolvency twice. The League made no further comment until a spokesman said last month: “The Football League has concluded its enquiries regarding Leeds United’s fit and proper persons test documentation and has addressed the issues raised with the club. Following further information from Leeds, the League is now satisfied that the club is compliant with Football League regulations.”
The Football League need to change those regulations: not just to meet the solid principle that fans should know who owns their club, but because rules that encourage owners to skirt transparency can lead to the sort of problems we’ve seen at Notts County all too recently.