Thursday 30 July 2020

End Game in sight...

Friday's EFL pronouncement about the state of play with ESI and therefore Charlton Athletic Football Club made grim reading. The message was clear that the EFL are fed-up being messed about by ESI in both it's formats and they aren't prepared to wait much longer for answers to key questions. The tone and wording would have been familiar to Chris Farnell because it was similar to the one he received before Bury exited the football league.

ESI V1 (Nimer & Southall) never provided sufficient evidence of 'source of funds,' which was why a transfer embargo was slapped on the club in January and why Nimer, ultimately, had an excuse to scuttle off. It's also Southall's last line of defence, that Nimer let him down on promised funding, although his evident grasping greed would have scared anyone off giving him access to any more money.

ESI V2 (Farnell & Elliott) have still not provided information the EFL have repeatedly requested and I believe that centres around 'proof of funds.' This is in stark contrast to Tweets from Farnell suggesting he has been working closely with the EFL all along and has provided all the information requested. Clearly someone hasn't been telling the truth and I think we all know now who that was if we didn't already know.

The EFL demanded an urgent meeting and in the absence of news to the contrary, I believe that will have happened or being scheduled to happen very soon. Either the EFL get satisfactory answers and approve the takeovers - the first one needs to be approved before they could reasonable ratify the second - or the EFL will have to take further steps. They cannot prevent the sale of ESI or the club as part, but they can take further sanctions which would be catastrophic for ESI and the club. A points deduction would seem to be the lightest form of punishment but we could equally be thrown out of the league. 

Whatever happens, the statement and reaction to it suggests that it has had a galvanising effect on the fan-base. Those fans already settled on the idea that Farnell thrives on the chaos and destruction of football clubs are now convinced he needs to be removed and it also looks like the waverers have also made their minds up. There is a wave of fresh activity aimed at encouraging ESI to quit. 

Farnell, his business IPS Law, as well as the stooge Elliott have been receiving a lot of unwanted supporter attention this week that will be causing them inconvenience if not sleepless nights. One plucky Addick who lives in Hale Tweeted a picture of Farnell's offices and said she had called in and asked to see him over his intentions for the club. He wasn't available but he called her later and was relatively angry and threatening about her having posted a picture of his offices and his cars. Given that the addresses, numbers and email details of all of the protagonists appear to be circulating widely, I suspect she is the least of his worries.

So, Charlton Athletic FC appear to be in a no-win situation. Either ESI fail to pony-up and the club faces a damaging sanction, or they do manage to show proof of funds and the shambolic ownership continues as a League One side until they do cash in and move on to infect someone else. My money is still on the former.

The huge frustration for us supporters is there are limits to what we can, realistically, do and the elephant in the room is that Roland Duchatelet still holds the keys to the castle. Irrespective of who owns the club, it will forever be at risk all the time it does not have control over it's ground and training facilities. Duchatelet shows no sign of any pressure to sell and all the time he hangs out for an unrealistic price, he is only likely to attract wasters like Nimer and Southall who will never be able to follow-through on a purchase. He isn't going to need the £50m he wants in his lifetime, so the Valley and Sparrows Lane remain inheritance assets for his family if he doesn't get what he wants. He will be satisfied that they will appreciate in value whatever happens in the long run.

In the circumstances then, the only other potential driver here is Greenwich Council. The pitch has long been registered as an Asset of Community Value and the work of the Club and it's Community Trust are highly valued in the Borough and beyond. The last chance may be for the Council to force a compulsory purchase on Duchatelet. If that could be done at market rate (I am no planning expert but I believe legislation around this would support that), then the Council would be free to secure the lease or sale of the ground in due course to the club's owners. That would unite the club once more and ensure that Council Tax payers were not out of pocket. Both local MP's have written to the EFL on behalf of their constituents and I am sure they would be equally supportive of the Council if a compulsory purchase order was made. 

With ongoing operational costs, demand for replacement players and fans still reluctant to buy new season tickets, August looks to be crunch time for ESI and Charlton Athletic. 

Wednesday 22 July 2020

Season Horriblis ends in Relegation

For a club that has faced adversity so many times, tonight shouldn't come as so much of a shock. Not because we are inured to it, but because in so many ways we deserve it. Relegation is incredibly hard on the fans and equally so on the pros and dedicated management team who surround them, but there is more to it and that's why we can't complain too much tonight.

Our performance this evening at Leeds was way short of all of the others we have managed since the return from Lockdown. Our first-half performance was abysmal and for once the fight appeared to have left us. Bowyer's half-time searing appeared to to the trick after the restart but eventually we slumped to a 4-0 trouncing. By then we had turned over to watch Brentford try to recover against Barnsley. For twenty minutes or so they managed it having equalised and with news of an equaliser at Wigan we were, mathematically, safe. As the clock reached 90 minutes there was soaring hope we could squeak survival if the EFL dumped Wigan with a 12 point deficit but then gallant Barnsley managed a winner. 

There will be much gnashing of teeth. The joy of promotion last May and relief from three years of disappointment will be quickly forgotten and we stare, once again, into the abyss. Let's be very clear, this isn't the fault of Lee Bowyer. Or Johnnie Jackson. Or any of the playing staff. They all did their bit with zero assistance from 'the club.' East Street Investments (ESI), that half-baked duo of greedy wannabees are to blame. Them and the chancers now attempting to qualify a takeover of the blighted ESI brand.

The Fake Sheikh who couldn't prove his money was clean or who had never had any real intent to spend money is guilty. So too is Matt Southall, the smooth-talking Bar Steward who thought he had finally made it. Southall thought he could sell the ownership dream on to others but having accepted a £50m obligation to Duchatelet in terms of the football and training grounds, that was always going to be a hard-sell. A secret transfer embargo from the EFL turned Southall into a liar, a position from which he was never going to recover from and which was cemented once Nimer exposed his largesse and selfishness. 

So no material investment in January and Bowyer was left to battle on with his inferior squad. He managed to get a tune out of them and keep us all enthralled until the last game but we can't be surprised at how it's finished. The table doesn't lie and we can't really claim that anyone else should go down in our place.

The fact that there have been boardroom shenanigans since February when Nimer exposed Southall's greed might have been curtailed but it's clear since Chris Farnell got involved that things weren't going to settle. The rancour between him and Southall was public and the decision to sell the club on looked like a tactical move to ensure Southall got his 35% stake back (the club having been sold, naively now it would seem, by Duchatelet for £1). 

The fact that we have a neighbour of Farnell trying to buy the club now but unable, as yet, to pass the EFL's rigorous quality standards means there has been continuing uncertainty and it's been weird watching an assortment of a narrow set of Manchester-based 'businessmen' representing Charlton Athletic at matches since the return from lockdown. Weird because none of them support us and weird because they appear to be on the guest list courtesy of very little at all. Maybe because they are in on the deal to sell the club for not very much to Paul Elliott and then try to make a tasty profit by selling on to someone else with loftier ambitions? I suspect I have invested more in the club that any of them - certainly more than most.

So, I am absolutely sick this evening that the club I have followed avidly since 1977 have been relegated once again. However, for the second time ever it's because we have been mis-managed from above, not because of the efforts of the manager or the players. Our relegation under Duchatelet to League One was a travesty and due in large part to the negative effects of Katrien Meire and Duchatelet's failure to invest whilst also cashing in on player sales. This evening's is purely and simply because of a complete lack of any support from ESI.

My hope now is that our value as a League One club sees the ESI vultures finally leave the carcass and pave the way for new owners who actually care for the club and who are transparent in their dealings. Unfortunately the ESI ownership has split the club from it's ground and training facilities. That won't be easy to rectify given the stubbornness of Duchatelet and his deep pockets. No-one in their right mind will pay him want he needs to recoup his operating losses from mismanaging the club over five years because the land isn't worth that but he may be prepared to wait. He is a billionaire and the money will never be of any use to him. It's his family who will inherit and they can wait. If Charlton go bust in the meantime or find that the Valley is too big for them and move elsewhere, the time may well come where his family can cash in on their assets and recover the paper losses of their father. 

I am afraid we have reached a crossroads and if Barclay and Varney can't get Duchatlet to accept a market price for the assets, our ongoing ownership may continue to be precarious. Personally, I won't give ESI another bean and I think I have had my fill of struggling League One football under unambitious owners. Unless someone lights a fire under this club, I fear our future is greatly diminished. Money has been ruining football for decades and now the authorities are chipping in because they have been unable to move with the times and regulate effectively to prevent rogue owners from taking money out of clubs and leaving them in dire financial straits. Coronavirus hasn't helped but in a strange way it may have helped crystallise the threats from those seeking to take money from clubs rather than earn it through genuine investment. 

Friday 17 July 2020

Finally some clarity at the High Court...

Charlton fans learnt this morning that contrary to the Official Website post a number of weeks back that ESI had been taken over by Paul Elliott and a consortium he leads, ESI and consequently Charlton Athletic FC are still owned by Fake Sheikh Nimer, which means Matt Southall is still clinging on to his 35%.

In deciding that Matt Southall had no right to change the ownership details of CAFC on Companies House, it became clear at last that Paul Elliott does not currently own the club and that he, in fact, only has an "outline agreement" to acquire the club (for a £1) once he has passed the EFL's Owners & Directors Test. Nonetheless, Southall was put on notice by the Court for 12 months and fined a tasty £17,500+VAT. A tough lesson for the smart-arse.

This hearing may well, finally, prompt a response from the EFL in terms of their Misconduct charge against ESI (Nimer & Southall) and/or news of Elliott's suitability as a prospective football club owner. As I have said before, I don't think the Mancunian Estate Agent is going to get the nod. Either because the Misconduct enquiry will undermine ESI's takeover from Roland Duchatelet back in January or because poor Paul can't evidence the cash needed to prove he's a serious mid-term operator as a football club owner. I am pretty sure he won't be able to evidence the money.

Tomorrow's crucial game against fellow relegation strugglers Wigan may also tip a balance. The perceived value of the club may change if we are relegated and those seeking to profit from a sale (all of them) may find themselves left holding the baby. That would surely lead to a failure to provide operating funding for next month and effectively end in Administration. 

The only thing that could realistically stop that would be a new buyer's determination to avoid relegation and thus effectively stepping in to take on the costs as new owners but that would, presumably, involve a willingness to reward the thieves and vagabonds as well, more importantly, as likely having to inherit the onerous ESI-agree clauses with Roland Duchatelet. If Roland was willing to get real on the price of the assets that would be a distinct and positive opportunity. However, Duche is a stubborn old donkey and apparently thinks he can pursue Nimer and Southall first to honour their contractual agreement. Great though it would be to see Southall once again falling foul of M'Lud, it wouldn't help Charlton Athletic in the short-term. 

The cleanest way ahead looks increasingly like Administration. It would by-pass the control obligations between ESI and Duchatelet, crystallise Duchatelet's losses and allow new owners to start afresh and not have to waste money addressing historical issues of other people's making. 

The big question is whether or not there is anyone willing to acquire the club without the assets? News today that fans may be allowed to return to stadiums "in October" is good news and might also encourage would-be investors. 

Wednesday 8 July 2020

Three points should do it - safety may unlock the ownership puzzle

After last night's disappointing defeat at Brentford having lead for 75 minutes, I had to study the table and remaining fixtures this afternoon for any crumbs of comfort. 

The good news, I am pleased to share, is that with only four or five games remaining, I can't see Wigan, Luton or Barnsley finishing above 47 or 48 points. That would mean we only realistically need one more win and with Reading and Wigan both to come at the Valley, we should be confident of securing our Championship place. Birmingham away is a free hit for us although I can't see us stopping the Leeds parade at Elland Road on the last day. Reading is potentially the easiest fixture we have left, so it would be good to get those points on Saturday.

Wigan are effectively on 38 points, 12 adrift of us and with only five games left it's surely too much for them. They have to play Barnsley (A), Hull (H) and come to the Valley and they will do well to pick up four points from those given the current disarray at their club. They may also need to get something from promotion-chasing Fulham on the last day.

Luton only have four games left and have to travel to Huddersfield and Hull. QPR and Blackburn may have little to play for but both should give the Hatters a good game at Kenilworth Road. Can't see Luton having enough - that 5-0 spanking by Reading will have damaged fragile confidence.

Barnsley are also struggling and they too only have four games left. Wigan and Forest at home offer them some hope but their two aways are at Leeds and Brentford on the last day. Bye-bye Barnsley.

We can pretty much forget the rest because the existing 3-5 point advantage they have over Wigan, Barnsley and Luton looks unassailable.

So, secure those three points and we can focus again on the future of the club. Any prospective buyer awaiting confirmation of our league status shouldn't have much longer to wait. Staying up could revive Huw Jenkins' interest and it may clarify the price for Barclay and Varney.

Meanwhile, Paul Elliott is continuing to keep a straight face and the pretence that he happened to be convinced over a chat with his friend and neighbour Chris Farnell that Charlton were somehow a good long-term investment. Given our situation and the current uncertainties of future revenues, that is impossible to believe. The fact that Elliott is refusing to commit any further to fans in terms of who's in his consortium or their long term plans, based on the thin excuse that he's awaiting EFL approval, is as laughable as Nimer's ruse that he couldn't put any money into the club because former Director, greedy Southall, might somehow spirit it away. 

That nod from the EFL is taking it's time and I suspect the huge embarrassment for the EFL over the scandal of newly approved Directors at Wigan putting the club into Administration for what seems like a way to collect a big bet in Asia (that Wigan are relegated), is likely to mean the EFL will want to avoid dropping another gooley any time soon. Coming on the back of the Bury debacle and the shenanigans over Bolton's ownership, things must be pretty fraught for the numpties at the EFL and their Owners & Directors Test is an open laughing stock. They haven't yet completed their Misconduct Investigation into the first ESI takeover, and they may need a position on that before they consider approving anyone else. There were suggestions yesterday that they want to see proof and source of funds in the order of £15-17m to support the running of Charlton for the next two years. I don't reckon the Mancunian estate agent has that sort of disposable income and I very much doubt any of his mates who form his supposed consortium could cobble it together either. Why would a man with no previous footballing interest take a massive financial gamble on a long-term investment in a club 200 miles from his home? It's too hard to believe. It's also strange that Elliott has told us that he won't action the Companies House change of ownership until he has EFL approval. Could it be he's hedging his bets or doesn't want to formally pick up the risk of the debt burden until he can grab a windfall and exit stage left? 

As I have said previously, the fact that ESI (Nimer) could sell the club for £1 to, er, ESI (Elliott) and walk away, makes no sense either. Nimer must know that Farnell and Elliott have only a short-term interest and that there were serious buyers in the wings who might offer even a few million in order to acquire the club. Why would he walk away in the circumstances and effectively give control to his lawyer and a Mancunian estate agent? I suspect El-Kashashi, the Egyptian banker, may hold the answer to that question....

Whatever's happening, someone has had to pump a bit of money into the club over the last two months and whilst I don't think that's likely to have been nearly as much as two months running full costs at £400,000 per month (Players had agreed to defer wages and staff were furloughed), whoever has coughed up is out of pocket and will be looking for payback. Perhaps securing our Championship status will unlock the door? However, aside from the risks of the underlying contractual obligations to Duchatelet and the roadblock of the former-Directors loans, it may well be that serious investors are in no hurry to bail ESI (Elliott) out and are only too aware that Elliott and Farnell won't be able to sustain the operating losses for much longer. At this point in time, picking the club up from the Administrator looks the best option for a serious buyer. Administration would crystallise the clubs losses and null and void the ESI obligations to Duchaletet for any interested buyer. If it happened after the 'end of the season,' the twelve point deduction for next season may be a risk worth taking.

I am left wondering whether Chris Farnell and Paul Elliott might have bitten off more than they can chew and they might yet be forced to abandon ship, although they will face a shed-load of problems that won't go away if they do; Duchatelet will not give up on his £1.5m staying up bonus, or his £50m asset sale obligation and they might also have to find the cash to cover whatever has been put in to keep the shop open these last two months. Good job Chris Farnell is a brilliant sports lawyer with plenty of experience of struggling football club takeovers and Administration etc.