Morecambe: Fewer Owners, More Questions
On 23 February I posted about the complexity of the situation at Morecambe. Since then it has become a case of…
Less Owners – More questions for the Shrimps.
As events unwind at Morecambe and putative owners fall by the wayside, more puzzles seem to reveal themselves. The opacity of the football world and the endemic frustrations evoked support the arguments for the need for more transparency in the dealings around the game. If the club’s finances are hidden, how can fans be sure of the future stability of their club?
Current events at Morecambe have provoked a number of necessary questions about who is doing what, and why in this regard. On 3 May Diego Lemos was due in court to settle the dispute between himself and Graham Burnard over the ownership of G50 Holdings, which currently holds 82% of the shares in Morecambe FC. Mr Lemos did not appear and was therefore given two weeks to pay court costs of £86,000. This he failed to do and on 16 May the case was struck off.
It is uncertain as to what effect this will have on the police fraud investigations into matters around the shareholding of G50. From all reports these legal events do seem to have left Graham Burnard feeling safe to say he is now the owner of Morecambe FC, being the holder of 99% of the shares in G50. This assumes that the requirement reported in the Visitor from the February hearing no longer applies, i.e. that ‘The judge also said there was “no order” on Mr Lemos’ application for an injunction over Morecambe Football Club and G50 Holdings Ltd and that Mr Burnard should not “deal with, dispose of, diminish the value of, charge, or otherwise encumber” the 99 shares in G50 Holdings Limited currently registered in his name without first giving 14 days’ notice to Mr Lemos.’
Question number one therefore is; has Mr Lemos completely lost control of the shares in Morecambe Football Club that he bought from Peter McGuigan, thereby losing a large sum of money, and is their disposal indisputably entirely down to Mr Burnard alone?
Question number two is, if Mr Burnard is the beneficial owner of Morecambe Football Club, has he passed or is he fit to pass the EFL Owners and Directors test?
Mr Burnard’s solicitor, Lynne Brooke, spoke to the BBC after the May 2nd hearing and claimed that Mr Burnard was acting as agent for Abdulrahman Al-Hashemi, the Qatari businessman. Al-Hashemi initially joined Morecambe’s board when Lemos took over in September last year, only to resign two months later when Lemos disappeared from the scene. Al-Hashemi has been supporting the Shrimps since then, to the tune of £1m according to Mr Burnard and his solicitor. Burnard and Brooke have both affirmed that the club has now been ‘stabilized’ so that ‘income and expenditure match.’ Mr Al-Hashemi is not shown as a shareholder or director of either Morecambe Football Club or G50 Holdings currently.
So question number three is, what is the status of the money he has put into Morecambe – a loan, a gift or an equity purchase and is he hoping to get it back? If so, will its repayment affect the stability of the club’s finances?
On 9 May, Mr Burnard set up a new company, MFC Land Ltd (Company number 10761464), of which he is sole director. This company, he claims, will be used ‘to put the land into for the benefit of the club.’ Adding, ‘All proceeds will be for the club should it need to be sold.’
Question number four is, to what land is Mr Burnard referring?
Morecambe Football Club Limited has two fixed land assets. One is the freehold of the car park to the east of the stadium, valued at £185,000 in the 2015 accounts. The other is the lease it holds for the land on which the ground sits, valued at £7,636,334 in those accounts. The lease is free of rent for 125 years from the time of the building of the Globe Arena and therefore its value depreciates annually. The lease is protected by the Christie Trust, which was set up to ensure there would always be somewhere for Morecambe FC to play. If the land is not used for that purpose, it reverts to the Council who can only use it as a public park and only if Morecambe FC ceases to exist.
The rest of the land around the stadium is owned by others. Land to the North, locked in by the Globe, is in the ownership of PMG Leisure Ltd, now in administration. The Administrators have valued it at £1,240,910. The Administrators plan to sell PMG’s assets to satisfy their creditors. PMG Leisure was Peter McGuigan’s company, sold to Diego Lemos along with McGuigan’s shares in the club. Mr Lemos seems to have been a big loser in this whole situation. PMG Leisure provided services to the football club. It also guaranteed a bank loan to the club, securing that guarantee on its own assets. The club is still paying this loan, according to PMG administrators.
Land to the South of the stadium is owned by ex-club director Nigel Adams’s company Omega Holidays. Adams resigned from the club board in protest against the chaos caused by Lemos in December 2016. So, to rephrase question four, what land makes the setting up of a separate company worthwhile? It is common practice in football to hold the club and its land assets separately, but it is always interesting to understand for what purpose this is done. Sometimes it can be beneficial, sometimes not.
The answer may lie quite simply in the fact that both Mr Burnard and his solicitor, and indeed Peter McGuigan in the past, have emphasised the development potential around the Globe Area – plans for offices and a hotel have been mentioned.
Question number five, then, is what land is needed to achieve this development potential, and how will it be obtained, used and owned?
This may all be to facilitate the sale of the ‘now stabilized’ club, of course and money from development used to run the club. Mr Burnard says he is in discussions with ‘several parties.’
Question six therefore has to be, what are the intentions of the interested parties towards the football club?
Fans, and the Shrimps Trust in particular, might like to be assured of answers to such questions; for if you don’t know where the money to run your club is coming from then how can you know if the club itself will continue to survive? One thing does seem to be clear is that one of the interested parties at Morecambe is unlikely to be the colourful Joseph Cala. It is understood that he is now looking elsewhere. Interestingly, Ilkeston FC are in a similar financial situation to Morecambe currently and have reported receiving interest from a potential purchaser based in the USA…
Article based on data researched by Veqias, written by S J Maskell with additional input from John Lish. Veqias is a new project which aims to provide an information and analysis service for the football community. Veqias is a current participant in the Lloyds Bank Social Entrepreneurs Programme.
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