It’s tight at the bottom of League One. Just six points separate the bottom six clubs. Four will drop, two will survive. Swindon Town are currently one place above the dotted line and by thinnest possible of margins. They are above Bristol Rovers on goals scored, with Wimbledon a further point behind them. It is, one might think, the the best of times for one of those clubs to have a cloudy so heavy as that currently hanging over them, but that’s what seems to have happened at Swindon, and the result could be far-reaching.
The story came to light after the agent Michael Standing was successful in obtaining a High Court injunction blocking the sale of the club without his consent by the club chairman, Lee Power. Power claimed that Barry provided the £800,000 when Power bought the club in 2013 and that he was “entitled to 50 per cent of profits”, to be taken from any increase in the value of the club and some player sales. However, the former England international Gareth Barry said that he had lent the money to Standing, with Standing saying he purchased a 50% stake in Swinton, the club’s holding company, for £800,000. In 2019, Standing was granted a high court injunction preventing Power dealing in those shares or the club’s assets without his consent after he discovered that Power had sold a 15% stake in the club without his knowledge.
In summary, Judge Michael Green QC said:
Mr Power does not deny that there was another person involved in the acquisition but, extraordinarily, he says that it was not Mr Standing but his very good friend, the well-known England international footballer, Mr Gareth Barry.
Mr Power disputes that Mr Standing and/or Mr Barry have a 50% interest in the club, but he does accept that Mr Barry has certain contractual rights.
Mr Power says that there was a meeting in March 2013 at Mr Barry’s house, attended by him and Mr Standing. At that meeting, Mr Power says he reached an oral agreement with Mr Barry in the following terms:
- Mr Barry would be allowed to invest in the acquisition of the club and, to that end, Mr Barry, through a corporate vehicle, would provide the initial £800,000 required, with the same split of £300,000 for the shares and £500,000 as working capital.
- Mr Barry would not own any shares in the club, whether directly or indirectly, but he would be entitled to 50% of the profits arising from any increase in value of the club, including 50% of net profits arising from sales of certain players.
- Mr Barry and Mr Power would fund 50/50 any ongoing working capital requirements of the club. They would also have equal responsibility for discharging a debenture over the club’s assets held by Mr Andrew Black, a former owner of the club, in the sum of £2m in the event of a sale of the club.
The reason why there had to be confidentiality about the beneficial interest, if there was one, or the fact of Mr Standing’s or Mr Barry’s involvement, was because of the Football Association’s rules concerning the ownership of football clubs.
Mr Standing has an interest in a company called First Touch Professional Management Ltd (FTPM), which is involved in the football agency business. Its main client is Mr Barry. The FA’s regulations are now contained in the FA Regulations on Working with Intermediaries and they prohibit football intermediaries/agents from owning or having interests in football clubs. Mr Barry remains as a professional footballer, currently playing for West Bromwich Albion FC, and he too was unable to hold shares in any football club.
Unsurprisingly, the FA immediately confirmed that they would be launching an investigation into what, exactly, had been going on here.
This week, the first part of their judgement was confirmed, with the news that Swindon Town, Lee Power, and First Touch Pro Management and its company director Michael Standing have all been charged with breaching their rules on dealing with intermediaries. Section E4 of the FA rules reads as follows:
An Intermediary, any individual or legal person with an interest in an Intermediary’s Organisation or an Intermediary’s Organisation shall not have an interest in a Club. Similarly, a Player, Club, Club Official, Manager or any individual or entity with an interest in a Club shall not have any interest in the business or affairs of an Intermediary or an Intermediary’s Organisation.
Such interest shall be defined as:
beneficial ownership of more than 5% of any entity, firm or company through which the activities of the Club or Intermediary (as applicable) are conducted and/ or
being in a position or having any association that may enable the exercise of a material, financial, commercial, administrative, managerial or any other influence over the affairs of the Club or Intermediary (as applicable) whether directly or indirectly and whether formally or informally.
If the Independent Regulatory Commission finds the rules were breached, then Standing and Power are likely to receive both bans and fines. For Swindon Town, outlook is stark. Power is repeatedly telling the world that Swindon Town are on the brink of administration. He did so here in May 2020, during the aforementioned court case, and he did so again here, just a couple of months ago. The latter of these claims came as Swindon sold winger Diallang Jaiyesimi to Charlton Athletic for an undisclosed fee, said to have been a six-figure fee.
It’s difficult to see a way out here for the club which isn’t severe. After all, a Judge having already passed comment could be considered to be making their decision for them, and if it is found that the club deliberately concealed the matter from the football’s regulators for years, well, it’s difficult to see how that would make any punishment any less punitive. A points deduction for this season would guarantee their relegation. It is, however, perfectly plausible that Swindon will be relegated at the end of the this season, in which case a suspended points deduction held over to a League Two season could even put their EFL place at risk, and on the evidence of what we’ve seen over the course of the last nine months or so, the National League is not a place you want to be, at the moment. The club’s official (non) statement in reply to the FA charge was causing considerable hilarity on social media within minutes of its release.
But the potential ramifications are serious. Power hasn’t managed to lift the High Court injunction blocking the sale of the club. Relegation beckons this season, one way or another, the accounts are late to Companies House, and the club is said to be on the brink of insolvency. Unsurprisingly, the supporters trust has confirmed that it has run into a wall of silence from the club, despite having had positive conversations with Australian investor Clem Morfuni, who recently launched a bid to purchase the club himself. Opinion amongst supporters on Morfuni seems to be mixed, but leaning towards the viewpoint that anything is better than Lee Power. It’s not much of a reflection on his eight years at The County Ground, of course, that it should have come to this.
It’s hardly as though Swindon haven’t been in a position like this before, either. In 1990, they won promotion to the top flight for the first time with a 1-0 win against Sunderland in the play-off final at Wembley. However, shortly afterwards the club was found guilty by the FA of 36 charges of financial irregularities and demoted to the Third Division. Upon appeal, the club had this reduced to being placed back in the Second Division, but chairman Brian Hillier was forced to leave the club after receiving a six-month ban from football.
Hillier, along with chief accountant Vince Farrar and former manager Lou Macari, were committed for trial at Winchester Crown Court on charges of conspiring to make payments to staff without deduction of income tax and national insurance contributions. On 29th July 1992, Macari was cleared of tax offences, but Hillier and Farrar were both found guilty. Hillier received a one-year prison sentenced (later halved on appeal) and Farrar received a suspended six-month prison sentence. Hillier’s ban from football was increased to three years. The club did get promotion into the top flight in 1993, but only lasted one season before being relegated straight back. Hillier never had any involvement in professional football again. There will likely be Swindon supporters who would accept any punishment meted out, if a similar situation played out with regard to Lee Power.
At present, though, the most obvious consequence of Swindon’s current dunking into hot water is to bring uncertainty to the bottom of League One. There are only between six and eight matches of the season left to play, and the five other clubs currently jostling at the bottom of the table will obviously be keeping a very close eye on the decisions to be made by the FA’s panel. It is imperative that whatever decisions are taken are done so promptly, so that these other, blameless clubs know what they need to do if they are to avoid relegation this season. For Swindon Town, though, the stakes are higher than mere relegation or promotion. The club’s 101 year unbroken run in the Football League could yet be at stake.