Charlton fans strike another blow against rogue owners

At Midday today, approximately 500 Charlton diehards congregated in the car park behind the West Stand at the Valley. It was a scene we are all too familiar with. Dedicated supporters left with no alternative but to come together to protest about the ownership shambles at their beloved club.

The driver today was the would-be stooge owner Paul Elliott whose attempted takeover scam of holding company, East Street Investments, for the laughable sum of £1 threatens to delay the serious takeover of the club by proper businessman and multi-millionaire, Thomas Sangaard. Elliott's sham deal was subject to him passing the EFL's Owners & Directors Test but he failed that spectacularly along with 'lawyer' Chris Farnell. Farnell has since been removed by ESI as the club's 'lawyer' but the Manchester Duo are fighting to get their pound of flesh. Hopefully the coffin-lid will slam shut on them shortly and we can all move on.

In the meantime, the bigger issue is that professional football clubs are too important within their local communities have such historic ties, that regulation must be brought in to prevent conmen and chancers from being able to get control, siphon off money and then ransom them off, or worse, leave them to go out of business.

Duchatelet sold CAFC for £1 because it was loss-making but retained the valuable Valley and Sparrows Lane training ground which he has leased to ESI. Nimer, as the controlling interest in ESI looks to have sold it for £1 to Elliott in order to ensure his partner, Southall, with whom he is now at war, got his 35p investment back but who knows what other side-deals there may have been? Whatever the case, Elliott clearly feels he has something worth fighting for because he has taken a court injunction to fight the loss of his deal. He hasn't the money or the interest to managing CAFC going forward but if he could get control, he could reap the rewards for selling on to one of the bigger and more serious interested parties. On the high seas possession is key.

The fact that under-funded people with selfish motivations are able to do this is a national scandal. Bury FC have gone out-of-business and a number of other north-west clubs are in trouble or have had close shaves. Is it a pure coincidence that Southall, Farnell and Elliot are from the Manchester area? The EFL's laughable 'fit and proper persons test' or the Owners & Directors Test to give it it's proper title doesn't appear to be nearly robust enough and the fact that the test cannot prevent a sale of a club in any event under the law allows a massive loophole which people with criminal intentions are exploiting. The test takes time because it requires a lot of information which must be necessarily corroborated before a decision can be arrived at. Typically the process doesn't start until you have seriously interested parties and too often they want to do a quick buy-out either because it's opportune or needed to avoid the clubs going into Administration. 

It looks like the EFL alone may not be able to sort this situation and it may need government intervention to make changes to the law to align takeovers. 

Far too often clubs also overspend and put themselves in precarious positions. Owners have to show sufficient proof and source of funds initially and that should show that they can run their clubs for at least two years. However, if they go and blow the budget on players, they can quickly be in trouble and risk Administration and all the damage that does to the supply-chain who inevitably all lose out. The EFL must find a way to risk manage this. Whether it be via a bond or some form of insurance policy, they need to keep a controlling interest over a club's abilities to meet it's committed liabilities. If they were able to do this, it would remove the opportunity for schemers to enter clubs for next to nothing, and then bleed them dry before ransoming them off or allowing them to crash into Administration.

Whatever happens, Charlton fans landed another blow for their club today as well as one for other clubs. I doff my cap to all who participated and to the determined individuals still camping out in the club's Boardroom and refusing to budge. #CAFCquid.

Frustrated Andrew Barclay withdraws his bid

Very disappointing news for all Charlton supporters today. Amid frenetic social media activity in recent days aimed at trying to save Charlton Athletic from the jaws of the EFL and to find a new, honest, responsible and capable owner for the club, best-bet Andrew Barclay has reluctantly admitted defeat and pulled out. 

Barclay came with serious financial clout but, more importantly, the blessing and support from Super Charlton fan, Peter Varney. Ultimately, Varney's backing may have done for Barclay's bid but Barclay was only full of praise today for the work Peter has done in trying to support him. Varney confirmed this afternoon in a Tweet that Roland Duchatelet had failed to even acknowledge, let alone return any of their attempts at dialogue and with no chance of a deal on the assets, Barclay was throwing the towel in. Barclay was clear from the outset - and even that was when he needed to break cover because ESI were not playing ball - that he wanted to own the whole club. He rightly wanted surety around the Valley and was keen to invest heavily in Sparrows Lane in order to bring the Academy up to Class 1 status to improve the flow-through of talent into the club.

It's very clear where the blame lies here. Richard Murray fell out with Peter Varney long before Duchatelet arrived. The rights and wrongs of that are subject to conjecture but I know that Varney has never put himself before CAFC and his track record in everything he has done for the Club, including leading us into the Premiership and re-developing the Valley is second to none. Richard Murray, who was the owner and Chairman during this period may well harbour resentment that Varney gets more of the credit for this. When Duchatelet's plans based on FFP fell apart and he began to look to exit the club, Murray poured poison into his ear about Varney which lead to Varney being blanked first by the hopeless Meire and then ignored completely by Duchatelet when Peter was brokering a possible buyout.

Whatever the merits of their fall-out, the behaviour of the pair has been very transparent as far as Charlton are concerned. Murray has hitched his wagon to every rotten owner we have had since then and Varney has attempted at every opportunity to try to bring better ownership to the club. Murray has continued to lord it in the Directors Box whereas Varney has continued to buy a season ticket and sit with his friends and family in the stands. 

Murray's own importance at the club has declined during these years along with his health and his financial significance. His Board membership and various titles have ebbed away over time and as fans we had to suffer his silence as the "voice of the fans" under Duchatelet when he failed spectacularly to say anything to rein in the worst excesses of Katrien Meire. The fact that Duchatelet is still not even prepared to speak to Varney is Murray's doing and we should not forget it.

Murray is also busy in the background with a rival low-lying consortium whom it is believed may be interested in a property play and a relocation from the Valley which would enable Duchatelet to pursue a redevelop the Club's historic home in SE7. Neither should be allowed to get away with this.

Barclay's withdrawal leaves us with one last hope - Thomas Sangaard. Sangaard only broke cover in the last week or so - also because he was having trouble connecting with Roland Duchatelet. He appears in a hurry and is saying he will do whatever he needs to in order to takeover. He wants the assets and the football club. He says he is ready to buy from ESI, sort out the ex-Directors loans and pay for the assets from Duchatelet. In order to do that he would need to part with something close to £65m. That would be before any investment in the club and the team. 

Sangaard may be moving to the UK but he runs a multi-national medical devices business in the US and he will need people at the club to carry out his plans. We need a CFO, a CEO and strengthening in a number of areas outside of the team to repair the damage done by Duchatelet and continued by the ESI conmen. Due Diligence or operational discovery, as may be more likely under Sangaard, could well uncover a bigger mess and involve a lot of litigation. No-one knows for sure what side-deals Matt Southall did whilst at the wheel. Laurence Bassini has already said he will sue us for some ridiculously large 'consultancy fee' and there may be more yet to crawl out of the darkness.

Barclay has wished Sangaard well and hopes he can carry it off. However, to me it looks like a pipe dream. You have to ask yourself, why would anyone pay £20-30m more than the assets are worth when it's pretty obvious the current owner is simply trying to avoid taking a loss for his years of mismanagement? A man who already a billionaire to boot. Why too would a Danish national, 24 years resident in the US want to risk a huge chunk of his personal fortune that he has worked his life to build on a League One football club in south-east London? Especially when it comes with all these other unknown risks. 

It would be great if Sangaard could do this and clean the slate of six years of ownership and operational misery but there are many hurdles yet to clear and he will need to be prepared to pay tens of millions over the value. Even if he were to, would we really be happy seeing Duchatelet, Southall, Nimer and God knows who else, benefit from their greed, conniving, opportunism and the damage they have wreaked on the club? It's far more likely that he will draw the line somewhere and that may be with the intransigent Duchatelet. What's certain is that the Freshfields law firm he has engaged will be making these risks and avaricious sums very clear to him.

If Greenwich Council could move to Compulsory Purchase the Valley and back someone like Barclay, it would be the right way forward but it's unlikely and in any event would take too long for the club. I have now arrived at the reluctant conclusion that Administration is the best and most likely way ahead. It would crystallise Duchatelet's £65m losses and wipe away all the responsibilities and obligations that ESI have accepted and loaded onto the club. It would likely mean a 12 point deduction to start in League One but the way would be clear for someone to deal with the Administrator and acquire the club for what it's worth - very little - and free of debt. It might also mean we need to find somewhere else to play but that's an option that may be forced on us anyway sooner or later by Duchatelet and one that a number of would-be owners are also advocating simply for the development opportunity alone.

So, pray for Sangaard but remember Murray's role in all this and be prepared to get behind the club if and when Administration becomes a reality. 

Farewell Chris William Farnell

Amid scenes of wild celebration on social media today, Chris Farnell was booted unceremoniously out of Charlton Athletic Football Club. The news is the hat-trick for supporters and follows his termination as a Director at East Street Investments and his failing the EFL's Owners & Directors Test.

It brings to an end a frenetic few months of activity since Taynoon Nimer appointed Farnell as the club's lawyer principally to take action against Matt Southall following his abuse of club funds. Farnell had previous with Southall having taken him to court and winning a £10,000 payment case in January 2019, so he looked the perfect person to go after Southall. Southall was eventually evicted from the club and denied access to the club's bank account back early Spring but Farnell busied himself with other matters and took on a greater role in Nimer's and Southall's absence. 

It also became very clear after a few initial searches, that Farnell had a lot of form when it came to other clubs and much of it was not positive. Most recently he was involved at Bury who subsequently went bust but has a string of associations with other clubs who have suffered mismanagement as well as some of football's shadier characters. He was quickly fronting Nimer's ongoing and unsuccessful attempts to convince the EFL of proof and source of funds, but it was his attempted takeover of ESI via Paul Elliott that really blew it for him with Charlton fans.

Having failed to find a credible buyer after several years of searching and numerous failed negotiations, principally because of the heavily overvalued assets, Duchatelet looked to have done the impossible with ESI Version 1 (Nimer & Southall). However, it quickly became clear that they had only paid £1 for the club and a five year commitment to pay £50m for the assets (Valley and Sparrows Lane). Nimer put no money in and Southall spent what club funds he could. Duchatelet's chances of getting £50m back looked impossibly slim and who would want to take the club on with that obligation hanging like the Sword of Damocles? Step forward Paul Elliott, a man with no apparent football connections, no otherwise interest in Charlton Athletic and who runs an estate agency business in Manchester. It didn't look right, it didn't feel right and it certainly didn't smell right. A cynical view was that Elliott, a near neighbour and mate of Farnell, was a convenient stooge for the sale. Assuming the club was sold for close to it's purchase price of £1 there would be an opportunity to 'flip' the club onto another buyer for a decent profit if they were willing to take the risk on the £50m asset obligation. That scenario would also mean Southall wouldn't profit as a 35% shareholder in ESI from the sale to Elliott. 

As would-be owner, Paul Elliott oversaw the payment of club bills in June and July although on what terms and with whose money we have yet to learn. Farnell and Elliott appeared now to have some real skin in the game if they hadn't previously. There was a rumour that Farnell had sold Charlton's sell-on clause for Joe Gomez to Liverpool for £500k in order to pay the bills and then that Dave Jones was being lined-up in some capacity to facilitate the sale of Dillon Phillips to bring liquidity to the club's funds. Both were strenuously denied but Farnell worked with Jones at Bury and when a posse of Charlton fans arrived unannounced at Farnell's IPS Law offices on Friday, who should be there in a meeting with Farnell - none other than Mr Jones!

We may yet have much to learn about Farnell's involvement at Charlton. What is clear from his previous roles that can be researched is that there is a level of complexity, many of the same characters appear and reappear and there are often lots of unhappy people. I am sure we haven't seen or heard the last of him. The EFL Misconduct Investigation is ongoing as is one by the Solicitor's Regulation Authority. No doubting too that he will join the list of those presenting large invoices to the club for 'services' rendered. 

Whatever happens next to Charlton Athletic, I believe we should all be grateful that Farnell is gone. If the EFL regulated to ensure anyone failing their O&DT or those associated with mismanagement at any of the clubs in their league could not reappear and start afresh at another club, then they might start to prevent people from becoming involved just to make a quick buck and leave football clubs in perilous financial positions and at risk of collapse. They also have to consider getting their foot in the door much earlier in the sale of clubs process and perhaps looking to put in place a bond or some other form of financial guarantee so prospective owners can't cut and run.

ESI V2 fail EFL Test and it gets worse for Farnell...

Long awaited and dramatic developments in the CAFC Saga today. The EFL issued a short statement saying that they had completed their 'full and comprehensive appraisal' of three individuals seeking to pass their Owners & Directors Test in relationship to the running of Charlton Athletic FC. The three are believed to be Chris Farnell, Paul Elliott and Andrei Mihail. All three have failed the test, and whilst they have 14 days in which to lodge an appeal, the decision effectively invalidates the 'Elliott consortium' takeover of East Street Investments, the company that owns CAFC. 

It's worth saying that it is rare for the EFL to find sufficient reason to fail anyone, let alone three people, one of whom is a busy Sports Lawyer. Even Claudia Florica, the Romanian involved in a national scandal in his country and forced by the courts to repay $10m he skimmed off a Microsoft Licence sale to the Romanian government managed to pass the test.

Where this leaves ESI V1, Southall and Nimer, is unclear, but presumably the ball is back in their court. Chris Farnell said publicly within the last week that his only ongoing role at CAFC was to see a decision finalised and he would then resign from the Board of ESI. Today he has said he will appeal the decision. Personally, I think he is wasting his time but spinning things out has been what it has always been about for Farnell & Co, so we will have to wait a little longer before him and his cronies get cancelled.

It really is bad news for Farnell and whoever has been paying bills at the club for the last couple of months. Relegation would not have helped his cause in flogging the club and now it will be clear that he effectively has nothing to sell. My supposition is that Elliott and/or El Kakashy may be out of pocket to the tune of somewhere up to £1m and the chances of August's bills being paid looks about as likely as Nigel Farage diving overboard to save a drowning migrant. 

By perfect or certain timing, the posse of Charlton fans aiming to confront Elliott also turned up today at his IPS Law offices in Hale. The full story has yet to emerge but they managed to get themselves let in by pretending to deliver flowers by all accounts! It looks like no offences were committed and earlier photos show everyone involved wearing black masks and observing social distancing protocols. Hopefully the visit may also convince Farnell, if he's not convinced already, that it's time he dropped his interest in CAFC before it damages his business and reputation even further. He must know now that the fans won't give up.

Whilst it's a worrying time for Charlton fans, I think it's great news that Farnell has been stopped. His failure to engage properly with Barclay and Varney was highly suspect and I believe his aim was to find a buyer who was prepared to ask fewer questions and be prepared to accommodate his sale terms.

So, if Nemer and Southall are back in the frame you have to wonder what next? Southall will be treating himself to a drink this evening having played a part in the planning of the posse's visit today. His antipathy towards Farnell is court-proven and he has been leaking information to Charlton supporters in a bid to scupper ESI V2. His rationale, I guess, being that it prevents completion of the sale to ESI V2 for what he and Never paid (£1) and denies him the golden farewell he was planning on. The Fake Sheikh has been very quiet since selling to Farnell and Elliott but I expect we will hear from him shortly. He really is the big loser here as he won't be benefiting from the sale to ESI V2 and now has to seriously face the prospect of trying to grab something for the club that he will have to share with Southall. He is still on the hook for £50m asset purchase to Duchatelet and may even have underwritten part of the ongoing club costs.

All of that pre-supposes there is someone waiting to give them anything for the financial basket case they now own. Administration must only now be a matter of weeks away and I suspect it will arrive before Farnell's appeal reaches it's predictable verdict. Logically, the only person with sufficient financial incentive to step in now is Roland Duchatelet given he stands to lose his £60m+ debt if the club are wound-up. However, we know he was desperate for several years to pass the financial responsibilities of ownership on to someone else and having managed that will be highly reluctant to pick up the responsibility once more. His alternative is to let the club fold in the hope that, in time, he gets permission to develop the Valley. He might then get the opportunity to recover part, if not all, of his losses. I say 'he' but the time any of that is likely to take will probably mean it falls to one of his family when they inherit. Deluded as he is, he may also still believe he has a chance of recovering the £50m asset clause in his deal with Nimer - good luck with that Roland.

Given what has already happened to this club in 2020, all we can expect is more drama in the coming weeks as things are likely to get hotter than a drug dealers spoon. Just so sad and dismayed that it continues to happen at my club of all places.