Date: 13th October 2013 at 6:39pm
Written by:

This guest article comes from a land down under

Thanks for the article, Mike. You’ve certainly done your homework and Davies and Gartside certainly take a scalding.



I often read comments about the financial turmoil our club was engulfed in when P.Gartside took over the helm in the late 90`s, I remain unconvinced this was the case at all, similarly I have never swallowed the patronising hype that Eddie Davies has and forever will be our financial saviour, someone we should be forever humbly grateful towards no matter what.

I am known for my personal criticism of the aforesaid gentlemen and with good reason, but for the benefit of this article I prefer to leave self opinion aside and reflect on the facts.

In 97 Gartside became Director alongside Brett Warburton, Gartside an accountant by profession while Brett had his MBA from Harvard, I wonder how the clubs fortunes may have changed had Brett been free to take the mantle of Club Chairman instead of Gartside, alas family business interests came first for Mr Warburton. Shortly thereafter Duckworth became Director C. Executive in 98 followed by E Davies joining the board in 2000. We are all aware at this time Big Sam led the club into the premiership from where we enjoyed 11 seasons raking in the Sky money, from which we departed in 2011/12 under Owen Coyle`s failed management. Club accounts indicate at the time Gartside took over we had £8 million cash in the bank and circa` £5 million of debt, in theory we were in the black by £3 million. Fast forward to 2012 and our relegation into the Championship, after 11 years and circa £400 million of Sky TV revenue, the club sat on a meagre £ 500,000 cash in the bank and £144 million of debt, thus over 11 years we had blown £540 million, that`s over half a Billion – mind boggling.

For an accountant in charge this represents financial failure on a huge unprecedented scale. But these figures alone mask over a far more worrying scenario of financial trickery and exploitation going on behind the scenes. It is reported in 2011 that the 2008 accounts show the club negotiated a loan from E Davies for £4.5 million at 10% interest with a £623,000 arrangement fee, that equates to 15% of the loan itself which is startling to say the least, if you factor in the huge interest the club has paid circa £2 million costs to borrow £4.5 million, that is Wonga territory nothing beneficial or sensible about this deal. In 2012 as relegation hit us the club paid one director ( Duckworth) £858,000 including £100,000 bonus and a £397,000 pay off – why ? the club had previously paid Duckworth & Gartside annual bonuses circa £150,000 +, why again ? Unless rewarding their perpetual failure is entirely justified with debt increasing by around £25 million a year. The club also paid certain Directors £62,000 a year in pension contributions, over a £1,000 a week to a personal pension – which planet are these men on ? Over and above this Gartside received £532,000 in pay for 2010 and he is noted as personally having 18.6 million shares in the club.

All in all these factual snippets illustrate the flamboyant financial benefits certain individuals take from the club while everything around them is burning to the ground, in part I am tempted to consider such benefits have been bestowed on those classed as allies, who have assisted and supported the financial restructuring of our great club to suit the individual interests of one man – our beloved owner Eddie Davies.

As we know virtually all of the club debt is owed to Moonshift Investments Ltd, owned by Fildrew Private Trust, an offshore company registered in Bermuda, both ED family operations. Offshore Trusts have one primary purpose to evade tax and the scrutiny that UK registered companies are exposed to, they are simply self manipulated operations designed to benefit the individuals who run them. Christian Aid, the world wide respected charity that fights poverty have published an interesting report covering the offshore companies that have taken a stranglehold over British Football Clubs, they claim ” the deployment of financial secrecy by business entities to minimise tax liability and accountability ” ” the anonymity of tax havens hides the financial meltdown of our football clubs with club supporters in particularly being betrayed ”

Christian Aid studied a wide variety of criteria to formulate what they call an Opacity Score, designed to highlight the reluctance of individual clubs to share information in the public domain and hide the same, for what it is worth BWFC received a score of 83 from 100. In summary they state ” financial secrecy comes at a price jeopardising the very existence of a club, the financial crises created can destroy a club which for generations previously sat within the very heart of the community it serves ” ” transparency now sits in an unmarked grave, we cannot trust what we cannot see ” ” tax havens are washing stations for dirty money, the intangible figures placed on player values hide the murky waters ” This report provides much food for thought.

I now shed the light on the patronising hypocrisy our club feeds us the supporters, Gartside reported in the 2012 accounts ” our aim is to get back in the premiership to build on the progress made across the business model, club facilities are one of our biggest assets vital for future revenue generation ” really ? and what progress is he referring to ? the main success emanating from the club is the financial benefits he and his directors receive. He talks about our valuable assets of which the De Veres White Hotel is a shining example, why is it the 2012 accounts show the club was unable to pay a £2 million loan repayment to De Veres ? One of the primary legal obligations placed upon the club directors ” they must make judgements and account estimates that are reasonable and prudent as they are responsible for safeguarding the assets of the company ” Why then following the fire sale of our best players in 2011 such as Cahill, Al Habsi, etc did our directors claim in the 2012 accounts the value of the current squad is placed at £50 million ! – we are talking about the same squad of players we have now, whom we would struggle to get £5 million for. For me this polarises the utter lack of accuracy and the financial abuse prevalent across the club, it has been rampant for years, orchestrated by Gartside and Davies who have taken a leaf from the bankers charter – look after yourself and screw the club and its supporters.

As recently as April this year the Guardian reported on the annual interest paid to ED ” 5% interest is a very nice earner indeed under current market forces ” reference is also given to how ED cannot cover the debt we owe from his personal wealth, that he must be using institutional loans, subsequently our plight does not sit with ED himself as he will never sacrifice his family fortune on the club, we are slaves to the faceless bodies he has borrowed the money from. Finally I cannot help but recall the press statement made by Coyle to the Telegraph in January 2012 ” we are in a fantastic position to progress, come the summer we will be in the best position the club has seen for many years, we sold Matt Taylor & Al Habsi to fund buying Mears & N`Gog ” how utterly hollow those statements have become, as a poodle to Gartside, Coyle epitomises everything that leaves a bad taste in the mouth.

 

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