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.
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