Right, really hoping you Pompey fans can help me out again, because youve been a great help so far. Milan Mandaric owned the club till January 2006, no problems. The club was bought by Alexandre Gaydamak in Jan 2006, who accepted a bid in May 2009 by Sulaiman Al Fahim for the club. - speculated afterwards that Gaydamak was a bit of a crook, asset stripping Pompey and still hassling the club for payments of £32m as an alledged secured creditor Al Fahim becomes non-executive chairman, then completes the sale in August 2009, after which his finances dry up straight away, the club admits both staff and players are not being paid, and in Oct 2009, media reports "Ali Al-Faraj" is close to taking over. Al Faraj and his company Falcondrone take over 90% of the club, Al-Fahim keeping 10% and remaining non-executive chairman. December 2009 and once more the players arent being paid, and the HMRC issue a winding up petition. This bit becomes a blur, when did Chanrai become the owner and how? It becomes apparent in the 09/10 season to Chanrai that Pompey are £135m in debt Feb 2010, club placed in administration, thus they are relagated. They reach the FA Cup final and lose to Chelsea. October 2010, up pops Gaydamak who claims he'll save the club, but Pompey leave administration with Chanrai still in charge. June 2011, CSI Nand Vladimir Antonov takeover. Nov 2011, Antonov arrested and so on and so forth............(i know the rest) So to me it looks like Mandaric was doing fine, Gaydamak was just a nob in it for his own good, Al Fahim was just interested in making some money (sold the club for £10m profit), Al-Faraj was probably made up as a cover for Chanrai to takeover the company, which he did, and was overwhelmed by debt so placed the club in administration (which I dont understand, because he's rich!) So can anybody clear this above haze up for me? Cheers!
Chanrai become owner in about late January. He lent Al-Faraj £17 million with Fratton Park as security. Al-Faraj defaulted on the loan and so Fratton Park (and thus Portsmouth) shifted to his ownership, as reluctant owner in order to 'protect his investment'. At least, that's the official version.....
Oh right, I did read that somewhere actually. Okay so when Pompey entered Administration in February of 2010, this is because Chanrai became the owner of Pompey following "Al-Faraj"'s defaulting payments of £17m in loans from Chanrai's Portpin. Okay this makes sense, blimey your club really was riddled with fraudulent activity wasn't it?!
Yep, that's pretty much it. Yeah definitely. Some people think Al-Faraj didn't actually exist and was just a method for Chanrai to acquire the club from Gaydamak. IIRC, he wanted to buy the club during the summer but Alexandre Gaydamak wouldn't sell to him because Chanrai was involved in suing his father, Arcadi Gayadamak, or something like that. So he made up Al-Faraj so he could acquire the club Fahim indirectly (using the reason of 'protecting his investment' to become owner). I don't know how true that is, and you might want to check with the others on the forum as I'm not sure if the details are completely correct, but I think that's the general gist of it.
That sounds about right to me, and I only need the general jist of it for my presentation, as I need to focus mainly on why Pompey couldnt control their finances and the incapabilitiy of its owners/directors. Cheers PompeyLapras, I may be back on the forum in the next few hours for some more help.
Back already! Clearly the club was torn apart by these businessmen over a one year period, between 09 and '10, but for four years since Gaydamak's takeover, the club's money was in short supply, so clearly something was going wrong at the heart of the business, and CEO Peter Storrie worked at the core of Portsmouth throughout the entire era, so to what extent do you reckon this bloke had to blame? Clearly he was a bit useless?
Yeah, useless is a nice way of putting it. He's definitely somewhat to blame at least. He always said he was just doing what he was asked to do by Gaydamak but as CEO, he's got the authority to make his own decisions on behalf of Portsmouth FC. It's not like, for example, an intern who doesn't really have much say. So I'm afraid that argument doesn't cut it for me (and I guess most fans as well). Plus, the fact that he got a win bonus was taking the mickey somewhat. Ultimately, the main problems was a failure to invest in a sustainable manner (i.e. improving infrastructure) but rather paying ridiculous wages (apparently Campbell was on over £100k a week for example). Despite what he says about just doing what Gayadamak says, I somehow doubt Gaydamak was involved in negotiating with potential signings.
I'll have a little go for you - no doubt others will correct anything I don't get correct. (It is a mess!) Milan Mandaric owned the club from 1998/9 until 2006. He took the club to the Premiership - he invested in the players but he failed to invest in the infrastructure. So that was the first problem really. Sasha Gaydamak bought the club from Mandaric. The story goes that he wanted to relocate the stadium and build executive apartments but his dastardly plan failed. However there is no evidence that he was a crook........... as such. But there was an arrest warrant in France for his father (arms offences) so the funding ceased. It became apparent that all the funding had been provided by Gaydamak Senior (allegedly). The club was then sold to Al Fahim in 2009 but he had no funds. He apparently put in £5m and that was the end of him. Peter Storrie was definitely involved in the A Faraj sale - he admitted that he did the due diligence on Al Faraj. Next bit is correct re the 10% etc. Chanrai lent Falcondrone £17m which was ostensibly to keep Pompey running, but it was confirmed that the £17m did not go through the club's books. You will see from the Administrator's report that they are waiting for reports from Baker Tilly Accountants on a number of questions. HMRC issue a winding up order - Chanrai steps in to keep the club running and to protect his investment by placing the club into administration as a creditor. He appointed UHY Hacker as Administrators and lodged a debenture over Fratton Park at Companies House. UHY Hacker is duly appointed by the Court as Administrator who then convinces the Court that Chanrai was the only possible purchaser. A CVA was agreed and Chanrai became the owner of Pompey. The Gaydamak thing in Oct 2010 was that he was trying to get a bigger up-front payment for his debt - the club went public and he backed down leaving the way clear for the CVA and for Chanrai to take the reins. Chanrai immediately put the club up for sale. In June 2011 CSI completed the purchase of the club. Antanov is the major shareholder of CSI. Chanrai still has his debenture at Companies House. November 2011 a European wide arrest warrant was issued for Antanov by the Lithuanian government. He was arrested in November and Chanrai placed CSI into Administration, appointing UHY Hacker as the Administrator. The debenture is over Fratton Park and CSI owned Fratton Park so Chanrai was still a secured creditor, this time of CSI. It sounds to me as though Chanrai was offered a deal for his loan, and he was wrong-footed - he has always made clear he just wants his money back.
Great information you two, it's really helped. I've moved on from ownership issues in my presentation onto poor management, from where I can hopefully start talking about no investment in infratstructure, as you mentioned, poor gate receipts compared to other clubs, yet still enormous spending on wages and transfers.
It would also be worth pointing out that the appointment of UHY Hacker was opposed by HMRC and the MP (she wrote to the judge apparently) so Admin Andy was removed and Trevor Birch was appointed. The latest CEO, Lampitt, was (I believe) Head of Compliance at the FA - he should have known better than agree/negotiate big wages, although it may have been that the strategy was to try and get back to the Prem as quickly as possible hence the signing of so many players with Prem experience.
Exactly! But that is a clear sign of extremely poor management. With a club in such poor financial stability, it surely cannot be responsible for an experienced CEO to spend spend spend money the club does not have on players which may or may not result in promotion, which is traditionally the biggest aim of all football clubs. I think the biggest aim of Portsmouth 4 or 5 years should have been to gain some financial stability, because it wouldn't take a genious to work out that 81% of annual spending, which was already composed of debt, was on player wages, so surely something was going badly wrong. The club was bound to collapse and this is where a decent firm of accountants, with finely tuned commercial awareness should be able to step in and guide clubs so that all goals can be met without tearing the company to shreds. Does this make sense to you?
Ah - you need to bear in mind that new businesses, whether set-up or take-over, needs an initial investment from the owner/s. I'm not convinced that these latest problems were caused purely by bad management, but with a dose of bad fortune into the mix. It is possible/probable that costs were too high across the club but Lampitt had a cash-flow forecast and CSI were providing funding for those periods where it was required. £3m was to be provided in December but Antanov's and CSI's assets were frozen by the Lithuanian government in November before Antanov was arrested. You need also to remember that this latest debt includes £10+m to CSI because it was just a loan. They had used the funds to pay transfer fees, plus repairs to Fratton Park and to the training ground. It is also possible, but the PKF report will be able to show this, that a payment had been made to Portpin/Chanrai. Is it inevitable that the club was "bound to collapse" if Antanov hadn't been arrested?
Completely true, it must have been a mix of bad management and ownership issues. I guess, as long as the investment had been there, the club would have picked itself up and carry on, but the investment never was there because of untrustworthy owners. Which makes it a pickle for me. Do you think it's possible for me to maintain the spin that bad decision making from management, who perhaps were not as commercially aware, or financially realistic as they should have been ultimately cost the club? I've also focused quite a bit on Peter Storrie's poor management, seeing as his tenure stretched across the entire disastrous 5 years and he made some notorious mistakes.
Okay - well the first admin/CVA was down to ownership, management and a poor CEO. The club was sold as a going concern but it was carrying a lot of baggage from the previous decade (including Mandaric's failure to invest in the infrastructure) which you have managed to cover with the trail of destruction and criminality. The fans were concerned about Antanov because of what we had read about him on the internet. That's why the anger with the FL and its Owners & Directors Test. Their behaviour once they took over pacified their critics somewhat though. I've heard a lot about a 5 year plan since CSI took over. They appeared to have a slowly, slowly and cautious approach. Don't forget they also owned 7 other sports companies within CSI so we can't assume they were commercially naive or unrealistic. Although there was £10m "investment" they seemed to stem from necessary repairs and payments for transfers. I do know that Cotterill was saying that he had a small budget and he used it to sign the players and put improvements in place for the academy. Without having seen the 5 year plan you won't be able to answer with any real authority about what, if anything, the firm could have done. We can't be sure that this time it was down to bad management - yes the wages were high for this season but we don't know if these would have been reduced next season due to staying in the Championship. For the question of "How can this firm help" - perhaps this needs forward thinking. I don't know how big this firm is, but there are some who undertake a variety of "audits" - eg. contracts, player contracts, personnel issues, business plans, due diligence, business restructuring, investments etc. as well as the more dry accountancy figure work. The past is the past and at the end of this PKF will have restructured the business as part of the administration process so it will be a case of moving on to the next phase really, and that will be new owners and the club in league one with the resultant drop in income. The question seems to be "........in future" so perhaps you need to find something very innovative to ensure that the problems of the past cannot be brought into play again.
Righto, thanks a lot guys, everything was a hell of a lot of help. I'll give you a post tomorrow and let you know how I got on. Thanks again! Night.
