Pompey: The New Boss Could Be the Old Boss.

By on Nov 29, 2011 in Finance, Latest | 9 comments

Its a form of ‘Pass the Parcel’.  A crowd of Russian, Israeli, Hungarian, Hong Kong and even British businessmen sit in a darkened room and spin poor old Pompey around until it ends up in the hands of one or more of them. The holder then has to keep it going until he finds an exit strategy. Then it goes back on the table with the same players and gets spun around again. Each time a layer is stripped off and the club gets diminished further. The last one holding the parcel will watch the final despairing whimper of a once proud football club.

It was announced today that Convers Sports Initiative, the parent company of Portsmouth Football Club (2010) Ltd, has gone into administration. Some of us got the news yesterday – courtesy of a Southampton fan. Galling. But it didn’t surprise us. Five days ago I wrote that Pompey Chairman, Vladimir Antonov was the subject of a European arrest warrant and said there was more to come. Since then, events have moved with some acceleration. There have been hasty background dealings, described by co-owner Roman Dubov as ‘trying to save the company.’ These dealings have made it highly possible that Hong Kong businessman, Balram Chainrai, will end up with the parcel for a third time.

To recap – on 16 November Antonov’s bank, Snoras was nationalised by the Lithuanian government and on 21 November his Latvijas Krajbanka closed down by Latvian financial services.

We now know that on 22 November Balram Chainrai, the reluctant owner that bought Pompey out of administration in October 2010, took out a charge on CSI’s assets.  According to David Conn, “CSI is understood to be overdue paying Chainrai instalments” for the purchase of the club. Chainrai becomes a secured creditor of PFC again. On 23 November the Lithuanians issued the EAW.

Antonov handed himself over to the City of London police on 25 November,  appearing in court and being bailed for an extradition hearing on 16 December. He claims that he is, ‘scared that I may get killed,’ if extradited to Lithuania. His partner Raimundas Baranauskas is contemplating seeking asylum. On the same day it appears that CSI were put into administration although this was not made public. CSI’s remaining directors, Roman Dubov and Chris Akers,  were entertained at Fratton Park on 26 November as Pompey play Leicester, drawing 1-1.

Today, 29 November, the administration of CSI was made public and our old friend, administrator Andrew Andronikou reappeared, signing autographs again.

To be absolutely clear, Portsmouth Football Club is not in administration but its parent company, CSI is. The Club seems to have enough funds to keep running in the short-term. However, there is a CVA payment of £5m due  at the end of March. Meeting that will be a problem without funds from CSI. It will be interesting to see if we can even keep paying our players up until then.

There is the worry of a points deduction hanging over the club. Our neighbours up the M27 had the same problem a while back when the company owning them suffered the same fate. However, Dr John Beech suggests that ‘there is a strong case that CSI’s Administration should not result in a points deduction for Portsmouth.’ Unlike Southampton Pompey is not the only company owned by CSI, which has a number of sporting and entertainment ventures in its portfolio, nor was it due to the business of PFC that CSI went into liquidation. Pompey could easily be separated from CSI and stand alone as a going concern. More like West Ham and the Icelandic Bank in fact. Of course, if Pompey does fall without the support of investment from CSI and go into administration as a consequence then the points will be deducted – how many is at the discretion of the Football League.

It seems the reassurances emanating from Fratton Park last week, assuring the safety of CSI,  were hollow. As fans feared, the unavailability of Mr Antonov’s money leaves the club exposed and vulnerable. It seems that, according to 5% owner Chris Akers, Mr Antonov has invested £10.5m since June for transfer fees and players’ wages. We don’t yet know what form that ‘investment’ takes, loan or equity, and whether the Lithuanians or Latvians will be asking for it back, as they have done of the money Antonov invested in Saab. CEO David Lampitt, in a masterly understatement, now finds it all ‘incredibly disappointing.’

CSI’s administrators, Hacker Young, have said that the companies under their umbrella can be sold as going concerns – but for PFC that needs to be achieved in a frighteningly short time-frame. With Mr Chainrai’s charge in the equation it is not exactly going to sell for a bargain price.

Mr Chainrai’s new position is a concern. If he does take the club back in charge again there will no hope of development or inward investment if his record last time is a measure. No doubt he will seek another person to pass the club onto. His frequently avowed intention to get his money back will hopefully ensure he will keep the club running, but his track record for finding suitable buyers is not encouraging.

Meanwhile the Supporters’ Trust is endeavouring to build a fighting fund. The Pompey Trust was born out of our last illiquid ownership and is still finding its feet. A proper scheme for donations is being worked on but already membership is being driven up. Yet again fans are prepared to come to the support of a club stricken by the broken model of private ownership and the inadequate regulation by the football authorities.

The Pompey Trust statement on the situation and membership details  can be found here.

You can follow SJ Maskell on Twitter by clicking here.

You can follow Twohundredpercent on Twitter by clicking here.


 

 

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    9 Comments

  1. Problem:

    “Meeting that will be a problem without funds from CSI. It will be interesting to see if we can even keep paying our players up until then.”

    and

    “Pompey could easily be separated from CSI and stand alone as a going concern. ”

    are diametrically opposed statements. Either Pompey are self sufficient as a stand-alone company or they aren’t.

    Matt

    November 30, 2011

  2. gutted….but lets fight again …..what can I do….?

    dean

    November 30, 2011

  3. What Matt said above.
    I’m a Saints fan . I hope for the level headed genuine Pompey fans that they will always have a club to support, but surely that club is going to have to be a new one along the lines of UFCM or AFCWimbledon. The FL can not allow the club in it’s present form to continue making a mockery of it’s competition. Rules, and precedents, are there to be adhered to.

    Wurzel

    November 30, 2011

  4. If you cannot show you are self sufficient by definition you’ll be insolvent and cease to exist.

    David

    November 30, 2011

  5. @Matt The two statements are separated in time and legal status.

    Currently Pompey is solvent and self-sufficient. There is sufficient cash for the short term we are told, although we don’t know what the length of the short term is.

    The problem will arise at the end of March when we have to meet a £5m CVA payment. If we can’t meet it then we could be insolvent unless it can be deferred – again. We have already deferred once under Chainrai’s ownership before so chances are we will have trouble doing so again. It does give time to raise the money and Pompey are seeking investment and/or a new owner to that end.

    Legally, unlike Saints but like WHam and the Icelandic Bank – the insolvency event has occurred at our parent company CSI which owns more than one company. It was not the finances at Pompey that caused that event but Mr Antonov’s ‘financial difficulties.’ As I explain above, Pompey are currently not in administration and should therefore be safe from a points deduction unless that situation changes. The Club could therefore be sold as a going concern at the moment which is what CSI’s administrators will seek to do.

    Simply put we are solvent for now. That situation may not continue.

    Hope that clarifies.

    @Dean Click the link and check out the Trust – please!

    SJMaskell

    November 30, 2011

  6. There’s a government select committee looking at football finances at present. Perhaps there may be some good to come out of the that, but don’t hold your breath!
    Football clubs depend on each other. You have to play other teams and it’s in your own interests to have competitive matches. But unfortunately the big clubs are only concerned about themselves and are short sightedly looking to the other big clubs in Europe for money spinning fixtures.
    I would like to see the bigger clubs forced to pay a levy on their turn-over until enough money has been raised to pay off all the debts of the smaller clubs in the football league.
    The money could only be spent on paying off debts to make the clubs solvent and it would be a one time deal. It would then be down to the clubs to live within their means and there would be no second chances.
    It could work and would be a wonderful opportunity to put struggling football clubs back on a sound financial footing but it will be a very very hard job convincing the big clubs to back such a plan.

    KJ

    November 30, 2011

  7. Nothing against the fans, because it isn’t your fault – you just support your local team, but its fairly obvious to anyone who thinks about it that Portsmouth FC is a thoroughly crooked institution.

    It starts with David Deacon and his fellow co-owners. A nasty bunch of property barons (Deacon still owns a lot of the land around Fratton Park, including the Pompey Centre, over which he just put his company into administration, didn’t pay me & other contractors, then continued development with a new company and some new dupes).

    Then you get tax dodging Milan Mandaric and Harry Redknapp. Nice to see those two finally getting their comeuppance.

    Then Sacha Gaydamak, whose father is a well known (and wanted by some countries) international criminal specialising in smuggling and selling guns and drugs. Football clubs deal in large sums of cash – perfect for laundering money, and have the added bonus of being a pleasant accessory purchase for the modern billionaire.

    Then Balram Chanrai who was linked to Gaydamak Snr’s Israeli operations and his tax-evading (in Israel) chums.

    Now Antonov, who allegedly committed large scale bank fraud and forgery.

    I’d say that Portsmouth FC are in real trouble right now, but with David Lampitt “former head of regulation at the Football Association” at the helm I doubt it very much.

    Funny that Luton got crucified by the Football League’s sanctions during their financial trouble after their manager tried to highlight corruption in football. Your lot will be just fine though. Another friend of Gaydamak will come in and the FL will look the other way while you short change St John’s Ambulance and local small businesses again.

    rhimjimmy

    November 30, 2011

  8. It is now clear that Mr Antonov’s input of £10.5m to the club was in the form of a loan. PFC now owes in the region of £45m if the CVA payments are included.

    Mr Chainrai holds a charge on CSI, CSI’s main asset is PFC, whose main asset in turn is the ground, Fratton Park.

    SJMaskell

    December 5, 2011

Trackbacks/Pingbacks

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  2. Turmoil Week: Portsmouth | The Two Unfortunates - [...] of the purchase price of PFC and Chainrai sought to secure his money. This opened up fears that Chainrai …
  3. Who should run our club, that is the question | A 'one click' guide to Pompey ownership - [...] November 29th 2011  “Pompey: The New Boss Could Be the Old Boss” Article by SJ Maskell Source: http://www.twohundredpercent.net/?p=16613 [...]

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