Panorama Has the Last Word on Notts County and Munto Finance

A single sheet of paper, a bank guarantee worth £5m, appears to have been enough. It was enough to convince the Notts County Supporters Trust to surrender its 60% shareholding, enough to persuade the Football League that all was well, and enough to hand the world’s oldest professional football club over to a consortium built on sand. Last night, the BBC’s Panorama programme laid bare the details of how Munto Finance, fronted by a man claiming to be a prince, took control of Notts County in the summer of 2009, and the story is a parable for the madness infecting modern football.

The programme centred on Russell King, a convicted fraudster, who was the architect of the scheme. King, supporters were told, was only a “consultant”, a line repeated by his enthusiastic cheerleaders at the time despite his name being linked to the takeover from the beginning. Using a false guarantee of funds from a British bank, First London, King installed one Abid Hayat Khan as the public face, passing him off as royalty with access to the riches of the Bahrainian royal family. It was Khan who sailed through the Football League’s Fit & Proper Persons Test, the single biggest hurdle to taking control of the club. Panorama claimed Khan is now on the run over a £1m fraud.

Sven, North Korea and a House of Cards

Once inside Meadow Lane, the new regime made its marquee signing: Sven-Goran Eriksson arrived as manager, a spectacular statement of intent for a League Two club. The promises were grand, a five-year plan to reach the Premier League or Championship. Yet the real plan was more outlandish. Panorama detailed how Eriksson was dispatched to North Korea on a bizarre mission to convince its government to invest in mining rights through another company, Swiss Commodity Holdings. The idea was to extract money from the secretive state and plough it into the football club.

When that money inevitably failed to materialise, the entire charade collapsed like a house of cards. The club was left with debts of £7m and was teetering on the brink of administration. Peter Trembling, who had been the public face of Munto, bought the club himself for a nominal £1 before it was eventually sold on to Ray Trew and Jim Rodwell. Eriksson quit. The Premier League dream was dead before it had ever truly begun. Notts County did win promotion that season, but it was funded by borrowing money the club believed was coming but never had. The club has since been relegated back to League Two after just one season. That the club continues to exist at all is perhaps the only positive outcome. First London, the bank that provided the bogus guarantee, is now in administration.

A Systematic Failure of Governance

While Panorama understandably focused on the colourful characters and the attempted fraud, the more pressing issue is the systematic failure of governance that allowed it to happen. How were so many people, from the club’s Supporters Trust board to the chairman of the Football League, Brian Mawhinney, so easily fooled? Everyone involved now portrays themselves as an unwitting victim of a sophisticated scam. John Armstrong-Homes of the NCST and supporters interviewed outside the ground all told a story of being deceived. Yet the warning signs were there for those who chose to look.

Journalists like The Guardian’s Matt Scott, who tried to get to the bottom of the story at the time, were met with a dog’s abuse from the very supporters they were trying to protect. The Supporters Trust, weakened by years of internal strife and criticism, went against one of its founding principles by surrendering its shareholding. The trust now lies moribund, a casualty of the debacle. It seems a considerable amount of goodwill towards the club has evaporated over the last eighteen months.

Fraudsters exploit human fallibility, and the Notts County saga is a textbook example. Nobody wanted to believe it was not true. The lure of bottomless pockets arriving to rescue a struggling League Two club was too strong to resist, even when there was no rational reason for it. This simple desire to believe the unbelievable is what allowed King to get so close to pulling off his scam.

The fundamental point is that if something looks too good to be true, it probably is.

This has never been truer than in the bizarre story of Notts County, Sven-Goran Eriksson, Munto Finance and the North Korean government. There are salutary lessons here for supporters of all football clubs. The single most important thing a club can do is exist, a fact forgotten by almost everyone at Meadow Lane during that heady summer of 2009.

As for Jim Rodwell, the man who helped rescue the club, he has a past of his own from his time at Boston United.

The question that remains, unanswered by Panorama and unaddressed by the football authorities, is how a single, worthless piece of paper was enough to fool an entire sport.