Port Vale: Blue Skies Or Grey Clouds Ahead?
Clucking bell. Again. Remember that “£8m” investment deal between Port Vale and American synthetic pitch manufacturers Blue Sky International (BS). You do? Well, apparently that puts you one-up on Hank Julicher – who just happens to be BS’s Chief Executive, so really ought to remember, if the deal ever existed in the first place. This week’s Port Vale scandal threatened to be the revelation that chief executive Perry Deakin and chairman Peter Miller had voted for each other in their respective elections to the Vale board, despite not having paid for the shares which carried those voting rights. But this appears to have become a footnote in this chapter of Vale’s history in world record time. The BS investment deal (and never have those initials been more apt) wholly underpinned Vale’s new era. Julicher’s announcement that the deal is dead, and has been for “some time” has, surely, wholly undermined that era.
Julicher’s story is the latest of numerous revelations from the local Sentinel newspaper, which has impressed with its recent exposures of the new, surely-soon-to-be-ex-Vale board. And it could not be more damning. He used some very un-CEO-like language, suggesting he would have had “to be crazy or on drugs” to agree to the multi-million pound deal trumpeted by Vale in September. And “to make my position clear,” he said “Blue Sky hasn’t put any money into Port Vale Football Club and won’t be doing so. End of story.” This, of course, is not “end of story,” as the deal’s collapse would leave Vale reliant on Miller and Deakin’s still “so-called” £350,000 investment to avoid administration – if Miller is to be believed (and, on this matter, he is believed).
Julicher’s comments were quickly dismissed, in a statement issued on Miller’s “behalf,” though not to the club’s website, as “incorrect and a blatant misrepresentation of the facts,” adding that “documented evidence will substantiate this position.” The story behind the supposed breakdown looks complex and political. It has proven unwise of Vale to replace one much-heralded “investment” deal, with fellow-American synthetic pitch bods Ameriturf Global Systems (AGS), with a larger, much-more-heralded deal with BS, withOUT eliminating contractual and political issues. AGS president Tim Hollinger released the letter published last week revealing Miller’s six-figure salary-and-perks deal to become Vale chairman. And it would be green to assume Hollinger did this purely in the interests of transparency. AGS are chasing seemingly much-needed money from Vale and nothing that discredits the club, and Miller in particular given his deep involvement in the BS deal, will harm their case (and, on this matter, AGS are believed).
But the gap between the BS deal, as trumpeted by Vale, and the BS deal as detailed by Julicher is huge. The figures were right, but in the wrong order and with a misguided decimal point. Vale claimed benefits of between £5m and £8m. Julicher claimed that “my deal came to around $850,000,” which the Sentinel estimated at £550,000. And far from being an investment deal – whatever the money involved – “Julicher viewed it as a sponsorship deal” with “the club going out and getting the money” to fund work on projects such as the all-important Robbie Williams suite and BS reinvesting “a percentage” of whatever “profits” would somehow emerge.
Vale’s official statement announcing the deal put this rather differently. And even if it wasn’t designed to mislead, it did so by claiming the deal “will facilitate an initial £5m investment into the club.” This was sort of what Julicher said. But to add, as Vale did, that this investment would be facilitated “within 12 months” was surely pipe-dreaming if it was supposed to come via re-invested profits from the BS projects. Julicher wasn’t, of course, including peripherals such as sponsoring ten years’ of pre-season tours to America, nearly £550,000 in itself. But he felt being “asked for money upfront” during his one visit to Vale was “a 180 degree turnaround.” And the deal was doomed thereafter.
The subject of shares was scarcely less contentious and linked back to Deakin and Miller’s elections to the Vale board when Vale shareholder Marcus Adams was given sight of Vale’s share register by the all-too-transparent Vale secretary Bill Lodey and saw for himself how the votes were cast. The register, effectively the electoral roll for the board poll, revealed that Deakin and Miller not only voted for themselves and each other but also received the votes attached to the £150,000 share investment from BS which was still being held up due to the “contractual issues” a month after the elections were completed.
Julicher claimed to “know nothing about them” and said his wife Margit, in whose name they appeared on Vale’s share register, “tells me neither does she.” And after Vale fans were introduced to the concept of “nil paid” shares by Deakin last week, Julicher added “ghost stock,” and “phantom shares” to their financial lexicons. “Ghost stock” is a genuine. If unlikely-sounding financial term. Look up “phantom shares” in a financial dictionary, however, and you are directed to terms including “hallucination,” “delusion” and, ahem, “funny money.” This needs no further comment from me. Here, for now anyway, the prosecution rests (little wonder, it must be knackered). And the defence case is out there already – ‘out there’ in more ways than one, some might say.
“Documented evidence” has indeed been provided to at least partly refute Julicher’s claims, with Margit Julicher’s powers of recall a particular cause for concern. Despite knowing nothing about BS share investment in Vale, she was named on a signed share application form dated September 16th for 30,000 ordinary £5 shares in the club’s parent company, Port Vale (Valiant 2001) Football Club Limited, and on signed forms, dated September 23rd and October 12th respectively, confirming her “irrevocable agreement” to Deakin’s and Miller’s board appointments. The club reproduced the first page of Football League “Owners and Directors Test” documentation relating to “Hank A Julicher, CEO Blue Sky International,” although as only the first of five pages appears there is no proof that Julicher took the test.
They also reproduced a BS website “screenshot”, with Vale’s original deal announcement and, crucially, the phrase “£5m investment into the club over the next 12 months” intact. (At the time of writing, the statement was still prominent on the website’s “articles” page). The club also published a full statement from Miller himself, responding to “the article appearing in the Sentinel newspaper containing significant misinformation and false statements” and answering four out of five questions which, we were forced to assume in the absence of any reference to their origin, came from the paper. A fifth question was “removed” for being “of a highly personal nature” and having “no material relevance” to the club or the BS negotiations. And this removal did not confirm “in any way…the suggestions made within the question.” At the time of writing, the hunt was on for this mystery question, which looks destined for a place in Vale folklore if ever revealed.
Miller said “Mr Julicher is not correct” to say the deal was dead, claiming that “since an agreement in principle was documented by e-mail, the final elements of the legal contract have continued to be negotiated.” Julicher was again “not correct” to say that he and Margit had neither “voted with” or given “anyone permission to use” Vale shares in board elections, “essentially because they didn’t know they had any shares.” Miller said “a series of e-mails with members of the previous board confirm a contract relating to a share issue” and referenced the afore-mentioned “documented evidence” reproduced on the club website.
And… not only was “Vale’s financial status” not “damaged by the Blue Sky scenario,” but “as such, the club is in a stronger position financially than when the new board was appointed, as Administration was avoided.” Oh, and “No.” No director would “stand down…in the light of all recent revelations,” as all the appointments were “made in accordance with legal and business protocol.” Despite the stridency of this response, it is a cynic’s paradise. Vale appear to admit they have trumpeted the BS deal based on a mere “e-mailed” agreement “in principle” – the legal standing of which will doubtless be challenged, if required.
The vagueness of “contract relating to a share issue” speaks for itself, especially when contrasted with the “documented evidence” of subsequent share dealings. And, in many Vale eyes, the phrase “members of the previous board” immediately strips all credibility from any accompanying statement. And the club could only conceivably be “in a stronger position financially” after the “Blue Sky scenario” if it was (a) deep in the sticky brown stuff beforehand; and (b) if Deakin and Miller really have now paid for their shares.
The Sentinel has, at the time of writing, been “unable to verify” the latter and have missed no opportunity to say so. And given the “documented evidence” Miller did produce, it is a wonder that he didn’t produce any “documented evidence” of this share purchase. There, for the moment, the defence rests, its case not forcing a significant change of heart or mind from Vale fans calling for, at least, Deakin and Miller to resign as directors and, especially in Miller’s case, leave the club altogether. The question “what next?” arises, both in terms of boardroom revelations and supporter strategy. You can’t imagine what other boardroom shenanigans could be exposed. Meanwhile, fans have called for “an interim board of balanced individuals” to be appointed. It is not clear by whom… or how many “balanced” individuals are left after such an “unbalanced” year.
However, the current board are determined to stay. So, legal process looks the best bet for removing them. But while Deakin’s and Miller’s elections are firmly in the “that can’t be legal” column, proving it is another matter. And removing them would leave Vale with an unconstitutional board. Whether Miller’s assertion of legal and business protocol is valid depends on the company’s articles of association, as they are the ‘company law’ to which the elections must adhere.
The fact that Miller and Deakin voted for themselves and each other isn’t, in itself, illegal or, frankly, a surprise. Whether they could use their specific shareholding is less clear. But the company issued a “statement of capital” on November 25th. This should include details of “the rights attached to the company’s shares” and, more pertinently still, the “amount paid up…on each share.” And the Sentinel has already quoted from this document, so presumably has seen it.
The Supporters Club are planning a meeting early next week “for all supporters and shareholders to formulate a strategy to remove these unwanted people (Deakin and Miller specifically) from our club.” They will need all the luck we can all wish them. And, as they say in all the best court reports, the case continues.
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