Cyber-Squatting, “Sharp Business Practice” & Pre-Pack Admin: The Business Stylings Of Graham Bean
The last forty-eight hours have seen a further twist in a story which we might have been expecting to come to an end. A couple of weeks ago, members of the Northwich Victoria Supporters Trust voted to sever their ties with the husk of a club that they had been supporters of and form their own new club, and on Thursday of last week a meeting of Trust members voted for the new club, which hopes to start from the beginning of next season, to be called 1874 Northwich. So far, so good, especially considering that Northwich Victoria’s owner, Jim Rushe, had already told the local press that, “I’m all for it.” With these ties severed, the supporters of the club could finally break free of the destructive rule of a man that has lost the club its home ground and overseen a plummet from the Blue Square Bet Premier to Division One South of the Northern Premier League in something approaching record time.
Nothing relating to this club, however, is ever quite as simple as it looks and within hours of the meeting on Thursday night it became apparent that Rushes adviser, Graham Bean, had been busily buying up internet domain names relating to the new club. This practice is known in industry terms as cyber-squatting, and it is a phenomenon that is very much of the modern age. It can be loosely described as the practice of buying up internet domain names with the intention of profiteering from them through selling them to companies, groups or individuals that may have wanted them in the first place. The good news for those of the receiving end of such behaviour is that this has long been recognised as a problem in this country and that a law was introduced to curtail such behaviour by the morally unscrupulous as long ago as 1998, although this may not end up being relevant to the new club, as one domain name, www.1874northwich.com, was registered by a supporter of the new club.
Bean was unrepentant regarding his behaviour yesterday, telling the Northwich Guardian that, “This has got nothing to do with Jim Rushe or Northwich Victoria. Neither has any involvement in what I have done,” and that, “I’m open to offers to sell them.” The legality of doing so will, in the event that the new clubs management does decide to go after him, be for Nominet, who manage UK-based top level domains, to decide, but one particular phrase that Bean used in speaking to the Northwich Guardian did stand out above all others: “It’s just sharp business practice on my part.” It’s difficult to say whether Bean was showing similar levels of literacy to when he commented on Twitter of the decision to form a new club that, “Any club purporting to be Northwich Victoria is open to legal challenge because the name is interlectually property right owned”, but his turn of phrase is, perhaps, best-described as unfortunate to say the least, considering that “sharp practice” is described by BusinessDictionary.com (other definitions, none any more flattering than this, are, of course, available) as, “Cunningness, deceit, misrepresentation, trickery, and other unscrupulous behavior just short of the legal definition of fraud.”
It doesn’t seem unreasonable to question whether “sharp business practice on my part” is a turn of phrase that Graham Bean should be using at this precise moment in time, but it could be argued that it also applies to one other significant aspect of his business dealings in recent times, the pre-pack administration that was signed off against his company Football Factors last year. Pre-packs have been sufficiently controversial in their use in recent years for the government to have come under pressure to outlaw them. Under a pre-pack administration, a buyer (usually directors of the existing company) is lined up for a struggling business before it actually goes into administration. With the transfer of assets completed, a new legal entity carries on the same business. This process has been heavily criticised as bordering on being, well, sharp business practice. In competitive industries, competitors to companies that go down this avenue have complained that companies have been allowed to run up huge debts, walk away from them and start up afresh under the same management and with few of the overheads that a company that keeps its house in order faces. It has also been heavily criticised by unsecured creditors, who seldom receive any return whatsoever for money lent or services provided in good faith.
In the case of Football Factors, the pre-pack administration was incorporated in July 2003, with a bank loan being obtained for £26,000 in 2007 which was secured by way of a second charge against against the home of Bean and his wife, who were the directors of the company. The following year, however (to the end of July 2008), the company lost £29,625, and these losses accelerated over the following two years, to £79,475 to the year ending at the end of July 2009, and subsequently to £93,410 to the year ending at the end of July 2010. By October 2011, the company was heavily in arrears to HMRC, leading to the appointment of Administrators from Begbies Traynor on the 2nd December 2011.
At the time of its entry into administration, its assets were listed as “its key personnel, namely the Directors and their intrinsic relationships with select clients” (which was valued at £5,000, to be paid as a “goodwill” payment by Bean – one payment of £500 to be followed with a further of payment of £4,500, to be made by the 1st March 2012), a sum of £1471.51 which was recorded on the company’s debtor ledger (of which £736.00 – 50% – was expected to be received by the Administrators), and fixtures and fittings, which were described as “two computers and an aged filing cabinet”, which the Administrators described as being of “no realisable value.” Its creditors, meanwhile, were Lloyds TSB, a Director’s loan of £38,590, various trade creditors to the tune of £6,037.85 and, probably most importantly, VAT of £3,024. 24 and PAYE and National Insurance of £21,131.53. By the time of the Administrators report of June 2012, the “goodwill” payment of £4,500 remained unpaid, and nothing had been paid relating to the company’s debtor ledger either.
So, perhaps it is this sort of financial difficulty that has led Graham Bean, once a respected compliance officer with the Football Association and chair of the Football Supporters Association, to the sort of behaviour and language that we have seen over the last few days, weeks and months. We might have contended that even Jim Rushe had the right to representation in his case against the Football Association and the Northern Premier League, but if Bean has shown his true colours over the last few days or so, then he should hang his head in shame. The very idea of a former chair of the FSA attempting to cyber-squat with the intention of profiteering against a Supporters Trust of all things is an act of behaviour so low, so morally bankrupt, so far removed from anything like the values of what engaged football support should be about that it almost defies description. Perhaps, in describing his own behaviour as something described elsewhere as “Cunningness, deceit, misrepresentation, trickery, and other unscrupulous behavior just short of the legal definition of fraud”, Graham Bean unwittingly let us know more about his own moral compass than he ever intended to.
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