By Tony Attwood (and his French-English dictionary)
It was back in August that the website Tribal Football came up with the headline “REVEALED: Usmanov ponders selling Arsenal stake and buying into Everton”. It was an article with the usual stuff about Mr Usmanov being “frozen out” of Arsenal, and no mention that he has been given a place in the directors’ box at the club despite not being a director.
Everyone from Arseblog to the Sun ran the story although the Sun cheated by running the reverse story the following day. (Pesky buggers aren’t they?)
By 18th August Mr Usmanov had issued an “emphatic denial” which those who had not run the first story (Express, Mail, ESPN etc) now ran with a fair amount of glee, laughing at the gullible ones who had run the initial commentary. And so another good bit of make-believe bit the dust.
But experienced Usmanov watchers expected more, and now they have got it via an article which has appeared in the the Swiss newspaper Le Temps. This says that Mr Usmanov has moved to Lausanne and is paying his taxes in Switzerland. Obviously the article is in French, but I done my best with it. If I am wrong, I’ll blame the dictionary.
Now this does have an implication for Arsenal, and I will come to that in a moment. But first here is a sentence which gives the tone of Le Temps article…
By domiciling in Switzerland, the Russian billionaire Alisher Usmanov denies hundreds of millions of dollars to the budget of a country whose current account deficit is exploding.
Mr Usmanov, you may recall, made his money through acquiring shares in mines and metallurgical operations that were privatized in the 1990s, and according to the paper now spends “most of his time in Lausanne.”
They make the point that Alisher Usmanov “is the head of the International Fencing Federation (of which he was a champion) and serves as a member of the IOC Commission for the development of the Olympic TV channel. The billionaire is renowned as one of the main sources of Russian influence on the IOC.”
Apparently his press service says that he focuses a lot of his time on “charitable, philanthropic and sports” work. They also note that (and I am still translating from French here) “for these reasons and for reasons of health, he spent fewer than 183 days in Russia in 2015, thus losing his status Russian resident.”
Asked by Le Temps to specify where the billionaire pays its taxes, “the press service of USM Holdings was unable to give a reply by the time the paper went to press…. The Federal Department of Finance cited tax secrecy as a reason not to respond.”
However USM Holdings told the paper that in “recent years, Alisher Usmanov has paid, as an individual, $350 million to the Russian treasury, while the companies in the holding company he controls additionally paid 100 billion roubles ($ 1.6 billion) in 2015.”
The newspaper in Switzerland added that Mr Usmanov has been close to President Vladimir Putin, and has been “inclined to use his financial muscle in the political service to the Kremlin. His media empire includes ten terrestrial channels and most particularly the Kommersant newspaper group, the 2006 takeover of which was accompanied by an editorial change.”
(After the takeover, the paper suggests, criticism of President Putin disappeared). “Two women create an additional link between the two men. The wife of Mr Usmanov’s former coach (Alina Kabaïeva), is herself a former Olympic gymnastics champion, and, the paper suggests, is a friend of the Russian President.”
The issue of Russians heading for Switzerland as the place to pay tax is a matter of interest to those who study such matters. Others who have gone that way include Gennady Timchenko (supposed net worth $11.4 billion), Vyacheslav Kantor ($2.5 billion), Vasily Anisimov ($1.2 billion), and Yuri Chefler ($1.9 billion).
That is interesting because the paper then goes on to say, “Others choose Britain, Monaco, Israel or the United States. There are at least 17 Russian billionaires who have lost (through moving abroad) their tax resident in Russia.”
Now shortly after his third re-election in 2012, President Putin made “fiscal patriotism” one of his central planks of his policy. A law was then passed, forcing the Russians to repatriate capital and declare their assets abroad. However it seems some citizens of Russia are choosing not to do this. Unless of course Mr Usmanov is in Switzerland working with the Olympic committee with the President’s blessing.
So what does all this mean for Arsenal?
If the article in Le Temps is correct, and if my translation is more or less accurate, then Mr Usmanov will be required to remain in Lausanne for much of the year in order to fulfil his residency obligations.
As I understand it resident individuals of Switzerland are taxed on their worldwide income, regardless of the source of the income. So Mr Usmanov is paying tax on his worldwide earnings in Switzerland, and he most certainly won’t want to pay it again in any other jurisdiction. He obviously thinks that the Swiss tax level is a decent one for him, and as noted above he’s working for the Olympics.
All of which makes it look as if Arsenal, and England, are not really on his mind. That doesn’t mean he is about to sell his shares – after all he is hardly short of a Swiss Franc or three – but it does mean that he seems to have given up thoughts of buying Arsenal from Stan Kronke or trying to influence the club by investing his fortune in it.
In which case not only was the whole Everton story a load of invented bunkum [goodness me I have never known such a thing before – the media making things up!!!] but really he is not much in the game, as far as Arsenal is concerned.
He might put his shares up for sale bit by bit; he might even donate them to the now defunct Fanshare scheme which had to call it a day because there were not enough shares to buy on behalf of fans. Those of us in the scheme all got our money back. Or he might offer them to Silent Stan.
But overall I think it is worth taking future tales about Mr Usmanov and English football with a fair degree of caution – at least until the shares start being transferred or at least offered.
-
Recent tales from Untold
10 things we learned from Arsenal v Reading.
League Cup: Arsenal – Reading 2-0, The Ox with a brace
Arsenal vs The Spectacles. The teams and other stuff.
All the young dudes – but which one is this year’s breakthrough kid?
The gross incompetence of England’s football authorities exposed, once again
Why the TV audience for football is falling, and what it means for the future of football
How are some of this summer’s big value transfers doing thus far? A case study
this story seems incomplete without a mention of Farhad Moshiri who sold his shares to Usmanov for a reported 200m recently
so no, Arsenal is still very high on Usmanovs agenda
I still feel that the future of Arsenal FC, at least financially-wise, rests with these two men, Kroenke and Usmanov.
Both are mortal and will disappear from the scene, sooner or later.
In the meantime, many things can happen.
If the Kroenkes’ lose interest, Usmanov would probably step in.
One thing is certain in my book.
The second most important shareholder should never have been denied a seat on the Board.
There can be little doubt that with Usmanov as majority shareholder coupled with his close association with David Dein, additional funds would be made available for the Club’s war chest.
However, whether this change of governance would be a good thing, overall, for Arsenal FC is debateable. 😉
A large sum of Arsenal Shares is such a big money power stake for anybody that has it in his possession. Save for any financial difficulty Alisher Usmanov might face in future, I can’t see him selling his Shares Holdings in Arsenal now when it’s not plummeting. And not to his bitter rival Stan Kroenke would he sell to. Kroenke who has apparently in collusion with others have denied him the 2nd largest Arsenal Shares holder a seat on the Arsenal board? Difficult. Strange thing happens a times, don’t they?
People who are good with money, don’t wait for the price of something to be plummeting to sell. If the price is plummeting, it is possible there are no smart buyers in the market, if nothing else they are waiting to find where the bottom is.
As near as I can tell, there is no DATA to suggest anything about how Usmanov might manage Arsenal. There are a few statements from Usmanov, and there is LOTS of supposition by “fans”. No data.
Deeds not words.
Opinion
Regardless of the price per share, a large sum of Berkshire Hathaway shares are worth more than a large sum of Arsenal shares.
OT
The big guns are being brought to bear on us.
Officials for Saturday….
Referee: Martin Atkinson
Linesmen: S Child and S Burt
Fourth Official: C Pawson
While we may not yet know his motives for shifting bases , be it legal, economic or just for safety reasons , the Swiss will probably be keeping a close watch on him.
Which cannot be all that bad . But then again , ‘The best laid plans of men and mice…’ , have led to some funny fails and falls .
Here are some more funny failures .
Hilarious Laws which you may not have studied in schools:
1. *Law of equality :*
The time taken by a wife when she says I’ll get ready in 5 minutes is exactly equal to the time taken by husband when he says ‘I’ll cal you in 5 minutes!
2.*Law of Queue:*
If you change queues, the one you have left will start to move faster than the one you are in now.
3.*Law of Telephone:*
When you dial a wrong number, you never get a busy tone.
4. *Law of Mechanical Repair:*
After your hands become coated with grease, your nose will begin to itch.
5. *Law of the Workshop:*
Any tool, when dropped, will roll to the least accessible corner.
6.*Bath Theorem:*
When the body is immersed in water, the telephone rings.
7.*Law of Encounters:*
The probability of meeting someone you know increases when you are with someone you don’t want to be seen with.
8. *Law of the Result:*
When you try to prove to someone that a machine won’t work, it will.
9.*Law of Bio mechanics:*
The severity of the itch is inversely proportional to the reach.
10. *Theater Rule:*
People with the seats at the farthest from the entry arrive last.
11. *Law of Coffee:*
As soon as you sit down for a cup of hot coffee, your boss will ask you to do something which will last until the coffee is cold.
12. *Law of Proposal :*
After you accept a proposal you will get a better one…
13.*Law of getting late*
When you reach early for something it will never start on time.
14. *Law of exam*
If you didn’t read a page which is of least importance, first question will be from that page only.
For me number 4 often plagues me . Just when I have put on gloves for some procedure or other , my nose starts to itch , or starts to run ! And often number 11, too ! Number 14 – I got it double barrel in my first year MBBS exams – so much for my skill in ‘spotting exam questions’!
And am sure Tony has often mentioned number 10 , at the Ems !
Oleg: the ownership of the shares doesn’t seem to me to be the point. Moshiri seems to have wanted to ditch the shares so that he could become involved in Everton, and Usmanov bought them as an investment. They still give him now power, and have made no difference to Usmanov’s standing within the club.
However his move to Switzerland and his decision to declare himself resident for tax purposes, restricts his ability to spend time in England.
There is a difference between planning for a takeover, and buying shares for an investment, in my view.
Far too simplistic look at an individual’s obligations in terms of where and how they pay tax. Before you even get to where someone pays tax you have to look at things such as where their vital interests are held . Irrespective there are agreements and protocols in place which avoid double taxation meaning that when determing liabilities under Swiss /Russian/UK taxation regulations taxes paid elsewhere are factored in.
Having read documents published by Kronke when he launched his bid for total control of Arsenal I personally would be more concerned as to the likelihood of Usmanonov actually selling his shares and what that would potentially mean in terms of the assets, including cash reserves .
Where he is domiciled is of little importance . His private jet can be in and out of London in a couple of hours so his position with The Arsenal doesn’t change. Kroenke will stay as long as he wants and will only sell should things turn for the worse. Should he eventually buy Usmanov out, I would be more worried about an abuse of power. I would prefer to see a more even mix of shareholders all having a say in the clubs running but I can’t see Stan releasing his grip on the cash cow that The Arsenal is.
You seems to think getting a seat in the director’s box can make up for being denied a seat on the board of directors!!!
Whatever we all think of the man, his shares should grant him a seat on the board, and perhaps a measure of “checks & balances” against Stan.
The Arsenal AGM was interesting, because Sir Chips held over 79% proxies!
This could only be, because some of Red & White shares were included in the number of proxies. QED.
The late and lead director for the move to The Emirates, resided for tax (and health) purposes in Switzerland.