PR Overdrive at Pompey

By on Mar 4, 2012 in Finance, Latest | 4 comments

Ignore the hype. Ignore the sad hypocrisy of the crocodile tears and the valiant claims such as ”I will not allow this historic club to go out of business,” emanating from the biggest vested interest of them all. Translate the  sentence. It reads, “I will not allow my front loaded debt to go down the drain.”

Balram Chainrai is on a ‘charm offensive’. He has bought himself acres of publicity this weekend in order to yet again paint himself as the victim of circumstances, a reluctant owner, whose sentimental attachment to our battered old club prevents him from allowing it to finally be put out of its misery. You wouldn’t do to an old dog what Chainrai is prepared to do to Pompey. These tears over the twitching corpse would make even Ken Bates pause and check the credibility monitor.

Pompey has been on death row since September 2009 when the unholy struggle for control of the club, orchestrated by the recently re-emerging Peter Storrie, began. Between October 2009 and January 2010 Balram Chainrai’s Portpin had attained a £17m charge on all Portsmouth Football Club assets for loans to the club’s then owners, Falcondrone. Falcondrone hid its identity off shore, behind the mirage of Ali Al Faraj. Pompey fans uncovered an alliance of Israeli business connections behind this supposedly Saudi front. No Bank would lend the club money at the point in its history, but Chainrai and Kushnir’s Portpin did. You have to ask – why? And why are they still hanging around, constantly wanting to revive the twitching corpse? And further, is there anyone else from this allegedly Storrie and Pini Zahavi created consortium who still retains an interest at Pompey? Because this relentless pursuit of a debt, now claimed to be £29m by Chainrai, seems to be becoming an obsession.

Yet the whole legality of his debenture is in question. There are those who would wish to see evidence that Portpin’s loan ever actually benefited the club before believing his claims. However, the clear fact is that when Chainrai received the club out of administration in October 2010, he not only gained ownership of the football club and its ground in return for the £17m debt, he also quietly moved the charge he had on the club pre-administration from the to-be-liquidated Portsmouth City Football Club Ltd to the new post-administration company. Yet no new injection of capital into the club appears to have been made. It seems that ‘milking the asset’ is key to the business model, not running a football club. Not illegal in itself, of course, but not in the best interests of the football club either. Balram Chainrai claims to have not received one penny back on his money, yet this is at odds with details given to me in a telephone interview with his administrator, Andrew Andronikou. Andronikou said that Chainrai took £2m from the sale of Younis Kaboul to Tottenham in January 2010, although other sources have the figure higher. This money was said to have been taken in breach of the insolvency laws during the HMRC court case against PFC’s CVA in May 2010, the money having left the club while it was subject to a winding up order. In addition, Mr Andronikou said, Chainrai had received one interest payment from Pompey’s parent company CSI before that company was put into administration in November 2011. Mr Chainrai is the chief and secured creditor of CSI and now lays claim to Pompey’s debt to its erstwhile parent, totalling some £10.5m. So the money put into the club by Vladimir Antonov is now owed to Chainrai without him risking more than his original, alleged, £17m. On which his own appointed officer-of-the-court administrator claims he has received two, reasonably hefty considering the state of the club, interest payments.

Portpin’s hopes of getting the money back took a blow when Pompey was put into administration on 17th February. The judge in the administration hearing ruled that Chainrai’s preferred administrator, Andronikou, already being administrator of CSI, had a clear conflict of interests. He said that “I can understand why they (the creditors) would want an administrator who plainly stands well outside the cosy club of former owners and current owners.” Pompey fans were relieved at the appointment of Trevor Birch of PKF, a football man who they hoped would have a good understanding of the situation at the club. Chainrai’s media offensive this weekend seems to be clearly aimed at countering his loss of control at  Fratton Park.

However, Birch’s tenure seems to have brought forward a raft of gloomy prognoses and mistimed and misleading press interviews. Although his initial realism was welcomed and his diagnosis that liquidation was still not off the cards painful but realistic, he does not seem above panicky press revelations and a strangely precipitous offering of closed options. At the same time he seems unable to ensure the smooth running of operations at the club whilst it does continue to trade.

In first suggesting that Pompey’s parachute payments from the Premier League would all go to past-owner-but-five Sacha Gaydamak it appeared that Birch was entering into the running Chainrai vs Gaydamak battle that is behind this whole sorry mess. Gradually is became clear though that this was not exactly the case and he was forced to ‘clear up’ his statement, with the Premier League clearly unhappy that its reputation had taken something of a knock in the idea that it would direct football money straight to a non-football creditor in this way. During this time fans were beginning to believe that Saturday’s game against Middlesbrough would be the last ever at Fratton Park.

In a meeting with fans’ representatives before the Middlesbrough game however, Birch was a little more optimistic. After the shock of finding out about payments that most fans already knew about and further talks with the Premier League he now feels that the club might just manage to get to the end of the season. Asked if he was an HMRC ‘plant’ sent to finish the club off he denied the suggestion. But we should make no mistake that Birch is there on behalf of Pompey’s creditors and the future of the club comes second to that. He is legally required to shut the club down if he feels it is insolvent to the point where it should no longer trade. It is his judgement to make.

This was brought into sharp focus when Birch asked the meeting for a show of hands as to whether fans would prefer ‘liquidation or Chainrai as owner.’ Putting aside that he was talking to a hastily convened meeting that many reps were unable to attend, this was a question that just should not have been put. Despite the fact that only one person present showed to be in favour of Chainrai, it is Birch’s job to seek as many alternatives as possible and look for better ways of managing the club to assist its survival. In asking this question he has put himself in the position of seeming to wish to manipulate fans into supporting one of his two options. Fans are already sick of bearing the blame for the club’s demise and are not likely to be easily drawn any longer. We have been subjected to enough spin and manipulation over the last few years to be able to easily recognise the signs. Indeed liquidation does seem very attractive at the moment, preferable to the continued slow bleeding to death that the club has been subject to. But the fans are not those responsible for the wounds, and being continually told they are merely customers who are a frequent nuisance to the club, are not the ones who should take on the responsibility for the club’s ultimate fate. Is it really too much to ask to let those that caused the problems take the hit and put something back into a community they have treated with such indifference.

Indeed yesterday the fans were considered to be such a nuisance nobody bothered to open the ticket office to sell tickets for the Middlesbrough game, nor did they in any way redirect fans to the last-minute ticket booths placed around the ground. One member of SOS Pompey spent his morning redirecting people who wanted to watch a football match, the staging of which, it seems to have escaped the administrator, is the sole income-earning purpose of the business.

And what of the vet in all this? The football authorities who have accredited unsuitable owner after unsuitable owner at Portsmouth for what now seems to be a life time? They were busy fudging their response to the Government’s enquiry into Football Governance. Unprepared to make their response public, the little that journalists do know seems to indicate that yet again the Premier League holds sway over the game. The powers that be, who seem to think transfer business is the driving interest in the game, appear to have no will for allowing fans into the game’s governance. So no humanitarian arguments there for allowing Pompey as it is to slip away and be reborn as a new fan-owned entity. They just attach another drip and keep it going rather than face up to the anger of alleged creditors who just will not let go.

Given the malign influences at play at Portsmouth, you sometimes have to ask just what it is that they are so scared of?

You can follow SJ Maskell on Twitter by clicking here.

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    4 Comments

  1. The writer has expressed my views on this very sorry situation very well although I don’t profess to understand all the apparently fruadulent manoeuverings around the Gaydamak-Falcondrome- Portpin & imaginary Arabs period.
    Right now it seems to me that my beloved Pompey has been left as a twitching body with the life blood being drained from it. Erik has gone – Lawrence has gone (the day before a critical match that might have helped us to avoid relegation) – Henderson is going next.
    What is the point of continuing to bleed to death. If you owned a favourite family pet which had a teminal diagnosis and was in severe, ever increasing pain you would have it peacefully put to sleep.
    It would be criminal to allow Chainrai to drag this out in the hopes of reclaiming money he says helped PFC.
    If only Milan Mandaric would buy us for his daughter – if only! At least he has real money and his only sin when he owned us before was to get carried away with enthusiasm – his heart was in the right place.

    Joe Vancouver

    March 4, 2012

  2. I have lost the plot completely. Does anyone really know what’s going on anymore. Chinny will again buy the club for £1, pay 10p in pound to creditors making it look more attractive to a buyer. Still does not add up. If the debt is £100m then Chinny would still have to find £10m to pay creditors. DOES NOT ADD UP

    Matt Portsmouth

    March 4, 2012

  3. It makes perfect sense Matt.

    The club owes Chanrai 17 Mill. This is secured on the ground – which is worth a fraction of that amount.

    If the club is liquidated, he will get the ground, which is worth very little.

    If however the club keeps going, Chanrai can use any PFC profits to pay interest / capital on the 17 Mill loan. Maybe in 20 years the loan could be repaid, though it doesn’t really matter as he doesn’t need the 17 Million, just a return – in the form of interest payments, on the investment.

    Gary

    March 4, 2012

  4. Thanks for the comment Gary, but the fact is Chainrai will not get the ground if the club is liquidated. The officer of the court, the liquidator, takes control of the ground and sells it to pay creditors from the proceeds. There are other secured and football creditors and employees to consider. However, as the ground will probably only realise about £2m under such circumstances you are probably right otherwise. Portsmouth City Council have declared there will be no planning permission given for anything other than a football club on the site.

    SJMaskell

    March 4, 2012

Trackbacks/Pingbacks

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