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Money laundering, Notts County, Portsmouth, Newcastle, etc

This is the strangest summer break I’ve known. It’s not the transfer or non-transfer stuff – it is this business of who owns the clubs.

This issue has been lurking around for weeks at Southampton, Portsmouth, Newcastle and little Notts County. But what brings it into focus today is that the Financial Action Task Force (FATF) has issued a report saying that football is at risk from criminals buying clubs, often to facilitate money laundering, tax evasion and other fraud and all that sort of thing.

Some of the tax fraud I know about personally (not because I have done it – I am honest m’lud, I swear I never done it guv) but because players (with the club’s connivance) are using the same routine as used by some authors – and being a writer I know such things.

What you do is sell your rights (copyright, image right, any old rights) to a company in the Virgin Islands, (which you own but nobody knows that as their companies are all secret) and so the club (or the publisher) pays your royalties there. You then seem to earn less in the UK, and so pay less UK tax, but you pick up the rest tax free in the Virgin Islands.

Now consider this. The Virgin Islands scam can be arranged even when everyone knows who’s who and what’s what. But supposing for a moment that no one knows exactly who owns a club. How then are the UK authorities going to trace anything?

An issue of this nature arose with Leeds United and was debated in the Guernsey court recently. There was some debate over who the ultimate owners of some shares in Leeds actually is, and as far as I know, this has not been resolved. (One might say, XXX Holdings owns 75% of a club, but that tells us nothing. Who owns XXX? that’s the question. Who is the ultimate beneficiary?)

I don’t mean to suggest Leeds has done anything wrong – nor that any of the other clubs I mention here have either. Rather I am thinking through the implications of the report in relation to current events.

At this moment there are several clubs lurking around where ownership is unclear. Southampton – perhaps on the edge of the cliff, Portsmouth – whose fit and proper person test seems to have wandered off into outer space, Newcastle where there is an owner, but he wants another mug to join the show, and Notts County.

You’ll be familiar with the issues of the first three, so let’s take a look at Notts County. Again, I am not saying I have inside knowledge – I am just reporting what I have picked up from people who are silly enough to talk to me. And on that basis anyone can write in and tell me where I have gone wrong (although just telling me I am an idiot, I am wrong, and I am related to a rotary engine, as happens sometimes, doesn’t really help much.)

I saw Arsenal win 4-0 at Notts County sometime in the 80s I think when Notts had a year or so in the First Division. I went there again to see a jolly 4th division game a couple of years back. The oldest league club in the world, nice ground, you feel for these sorts of clubs.

Then they were bought out by the fans who owned 60% or so in a supporters trust, and that seemed to stabilise everything. A club owned by the fans – good news all round.

But now the Trust seems to have given (yes given – at least that is how it reads to me) their shares to a middle eastern company of whom no one really seems to know anything (or if they do, they are not telling me).

At one level I want to say, “What are you thinking about guys? Have you not looked at Portsmouth where the money hasn’t turned up?” (and yes I know it might turn up, but it hasn’t yet and no one knows why). And besides, has all the money in the world helped QPR? Seems not.

So, as I read it, the majority of people who owned the Notts County Trust shares have GIVEN their shares to Munto Finance Ltd.

Now let’s write down everything we know about Munto Finance Ltd apart from the fact that they have just taken over the oldest league club in the world.

” ”

Yes, well, of course, maybe I am not very good at this, and maybe the answer is staring me in the face, but at the moment apart from the fact that Munto is some sort of Middle Eastern finance organisation, that’s it.

So why did Notts County sell its soul to Munto? It seems on the promise of Championship and then EPL status in the years to come. A bit like, well, Southampton, or Leeds, or Portsmouth…

I am so bemused by the notion that Notts County have given their shares away without revealing exactly who owns Munto, and what these people have done in the past, that I can’t really go much further.

I am also bemused as to why no one else is asking this question. (I really am worrying that the information is out there big time, and I am the only one stupid enough not to see it – after all why is no one else covering this story?)

None of this suggests that Munto are involved in money laundering – even I am not stupid enough to suggest that. But I do want to suggest that selling your club to an unknown buyer, as Southampton, Newcastle, Portsmouth and Notts County are doing, might be (just might, nothing more than might – and I’ll even reduce that to maybe) fraught with difficulties.

So please, someone, tell me who owns Munto.

(c) Tony Attwood 2009
Parts of this article will turn up at random on Team Talk.

12 comments to Money laundering, Notts County, Portsmouth, Newcastle, etc

  • Marc

    It really is time for the authorities to put into place some strict ownership and conduct rules. Unfortunately I can’t see anything happening when you have bodies like the FA, completely useless and unable to organise a piss up in a brewery or UEFA and FIFA whose level of corruption wouldn’t be tolerated in the Mafia.

    PS – Thanks for the mention yesterday. I’ve always wanted to be famous!

  • mingus

    Hmmm, Notts County? Southampton? Newcastle?
    Stripes anyone?

  • Jonny Neale

    Hi Tony,

    a lot of the information as to the ‘why’, but no the ‘who’ is available here.

    http://nottscotrust.org.uk/eve/forums/a/tpc/f/7776018302/m/510105301

    Certain guarantees have been written into the deal and the shares were gifted to avoid paying Haydn Green’s estate a fixed sum.

    I assume the idea behind keeping the amount being invested in the club shrouded in secrecy, is that it won’t be so easy to get taken for a ride with their investments, by being horrendously overcharged for everything(as has happened with Chelsea, Man City et al).

    The same reasoning could be applied to the ‘who’, the board have obviously been satisfied that this ‘special acquisition vehicle, managed by a bone a fide Investment Trust’ should remain nameless so as to not give away the significance/power/true wealth of the investors.

    If I had to guess, what this would tell me would be that the investors are ‘significantly’ wealthy as opposed be being merely ‘Mike Ashley’ wealthy. If this is the case I can see the logic of attempting such an approach – remains to see if everyone tries to charge them massively over the odds for players etc anyway…

  • Jonny – all perfectly good and reasonable points, but…

    if I were a crook and wanting to use a small time club for money laundering, I’d do exactly the same, say the same things, go down the same route.

    Also the comments made on the link are slightly untrue in that the Notts County supporter and member of the Trust who I spoke to last night was totally opposed to the deal.

    Tony

  • Jonny Neale

    I see your point but I am working on the assumption that someone MUST have done due diligence the check that this ‘bone a fide Investment Trust’ are credible (have a clear investment history, are known by other members of the investment community who can verify them and the veracity of their claims). I would ask for a list of companies, they have invested in and for contacts in legal and private banking sectors to further flesh out the claims.

    I used to work for companies that dealt with UHNWIs, Private Investors and ‘family offices’ – the world they move, by necessity, is shrouded in this type of secrecy but you can pretty quickly get an idea of the people if you know ‘the people’.

    I would be surprised if the club was naive to not have done homework on both the investment arm and the private investor (who they may well know and have met).

    It sounds as though a few members were opposed to the deal but that wouldn’t necessarily prevent it happening.

  • pig

    it could be that they have sat down and thought hard about what they are doing and spotting pitfalls before they fall into them. the biggest being saying anything at all to the press.

    if you were going to buy/invest in a team, knowing what you know, how would you go about it?

    also, i am sceptical (but willing to be proved wrong) that criminals would launder money through such public enterprises. most criminals shy away from publicity.

  • Ian Trevett

    Sorry to go off-topic, but it appears that Benzema is going to sign for Real Madrid.

    So where does this leave United? How are they going to replace Tevez and Ronaldo? There aren’t many big name strikers out there, and any that do pop up trigger a money race between City and Chelsea.

    Their fans must be concerned about their strikeforce…

  • steww

    Like the Wankel gag Tony – “Are you embarrassed easily…”.
    As you say this is a murky area, although I have to side with Jonny. Surely references would be taken and scrutinised? Then again I’m a bit naive….

  • rafael

    We finished a massive 18 points behind United last season

    OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOPS

    This was not only nicked from another site, it was posted here twice.

    Tony

  • don't believe the hype

    Tony, I know this is off topic, but I went slumming and found your post about Usmanov re-posted here in the comments section. Knowing how you feel about plagiarism, I thought you might want to know!

    http://arsenalanalysis.blogspot.com/2009/06/africa-cup-of-nations-spells-danger.html

  • Pete the First

    Maybe the Notts County story lends weight to those that are unwilling to throw their support behind the AST?

    Why give away teh Club that belongs to the fans? Even worse to a dubious investment company? What could they possibly want with a lower league team? A device to clean their filthy lucre?

  • Dont Believe – thanks for the tip off. The issue of re-posting has got so big it is hard to keep up with. Anyone who reposts here and gets spotted gets the post removed (you can spot them because I write OOOOOOOOOOOOOOOOOOPs across it) and is then banned. I write to some of the other sites – but time is catching up with me and I don’t get to all of them. Most sites are run by decent people who are as fed up with all this as I am, and reposting on their site is not their fault. Team Talk is the only site that refuses to do anything, which is why I knock them.

    But yes, if you do spot anything, do let me know. I do appreciate it. In the meanwhile I think that we are getting the reposting under control on this site. Not eliminated, but much reduced.