League and taxman oppose Bates' latest Leeds move Matt Scott Friday August 3, 2007
Guardian Ken Bates's hopes of securing the Football League share for his new company Leeds United 2007 appeared more distant yesterday after the league and HM Revenue and Customs declared their opposition to his most recent takeover of the club. Customs & Revenue had already challenged through the high court the result of a previous sales process arranged by the administrator, KPMG, that saw the consortium led by the former Chelsea chairman win control of Leeds. That was a company voluntary agreement (CVA) in which Bates's company proposed to pay 8p in the pound to all creditors. KPMG responded by organising a second bidding process that Bates again won, with an offer that amounted to 52.9p in the pound to creditors. The key to winning the bid was that Astor Investment Holdings, a company that insisted it had no existing formal connections to Bates, withdrew its claim for £17.6m owed to it by Leeds. The administrator had been satisfied by Astor's solicitor, Mark Taylor - himself a director of Leeds United 2007 - that no connections existed. However, Customs & Revenue yesterday said it was not satisfied by the sales process. "We are not prepared to enter into any arrangement that lacks complete transparency about the identity of creditors and the terms of any deal being reached," said Dave Hartnett, a director-general of business at the revenue. "HMRC believes it is vital that all creditors are treated fairly. HMRC is determined to achieve a full and fair settlement for the taxpayer." The Football League has meanwhile been working to persuade the administrator and Leeds United to reinstate the CVA process. Meetings have been taking place this week involving the chairman of the Football League, Lord Mawhinney, Leeds and senior officials from KPMG. Mawhinney claimed yesterday that his demand to reinstate the CVA had been approved by the two other parties to the negotiations. "We have got to resolve it soon because the season starts in nine days' time," he said. "We all agreed that the best way forward would be to see if the administrators could reconstitute the CVA. Prior to Leeds we have had 41 clubs go through administration and every single one of them has gone through on the basis of a CVA." Although KPMG conceded that there is a "small window of opportunity" in which to reinstate the CVA, the administrator is not expected to do so. Any such move would probably lead to Customs & Revenue pursuing its legal challenge, since it has not withdrawn its previous litigation. But the league will not hand over the share to Bates's company - which would provide it with the players' registrations - without the approved CVA. "One of the issues [the parties have] been wrestling with is that the administrators have sold to [Bates's] Leeds United 2007 certain assets and liabilities, including Elland Road and the players' contracts," said Mawhinney. "The players' registration remains with the old club, which is in administration. The registrations are a relationship between us and the club. "But the normal way to resolve this is for a CVA to go through and once it has been through there is a legal agreement as to what all the unsecured creditors get. "The administrators tell us everything has been done properly. The administrators are not answerable to us. They are answerable to the law of the land." _______________________________________________ the Leeds List is an unmoderated mailing list and the list administrators accept no liability for the personal views and opinions of contributors. Leedslist mailing list [email protected] http://list.zetnet.co.uk/mailman/listinfo/leedslist Join The Leeds United Supporters Trust at www.lufctrust.org
