Sfo (1 Viewer)

[TheRoyalScam]

From their website: http://www.sfo.gov.uk/fraud/what-is-fraud/corporate-fraud/asset-stripping.aspx

Read the first paragraph - 'What Is Asset Stripping?'

:thinking about:

Conjure up any thoughts, anybody?

 

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[DaleM]

An owner of a whisky investment business was found guilty of fraud. A company was established with an issued share capital of 100 ordinary shares of £1 each. It was engaged in marketing to the general public investment opportunities, principally in single malt whisky, but also in champagne. The company went into liquidation a few years later with debts of over £0.5 million.
The founder immediately started to trade under another company which had remained dormant until then and was similarly named. This company engaged in the same activity, had the same supplier and client list. In effect there was no change, certainly in the mind of the investors. The "phoenix" company ceased to trade the year after. The marketing activities throughout the whole period of operation brought in over £4 million from around two thousand investors.

Hmmmmmmmmmmmm:thinking about::thinking about::thinking about::thinking about::thinking about:

• "Phoenixing" - directors move assets from one limited company to another to 'secure' the benefits of their business and avoid the liabilities. Most or all the directors will usually be the same in both companies. This usually arises as a way of 'rescuing' the assets of a failing business rather than targeting a company

Double Hmmmmmmmmmmmm:thinking about::thinking about::thinking about::thinking about::thinking about::thinking about::thinking about::thinking about::thinking about::thinking about::thinking about:

 

[chiefdave]

Well I for one certainly can't think of any examples of this kind of activity happening

 

[Samo]

Can I ask IF the OP if he has reported our case to the SFO?

 

[TheRoyalScam]

You can ask!

 

[Samo]

You can ask!

You'd be in no danger of litigation for reporting suspicions to a government agency surely?

 

[TheRoyalScam]

I believe any reporting is 'confidential'.

 

[Samo]

I believe any reporting is 'confidential'.

Fair enough TRS, just trying to ensure that someone has.

 

[oldskyblue58]

just a thought but if you let contracts come to an end and then ask those players to sign another in a different company, or , only sign new contracts for youth, loans freebies etc in that different company whilst say leaving the players you dont want or are too expensive in the old company has any asset actually been stripped?

 

[TheRoyalScam]

Good point OSB58, yet you would still be removing the players from the Golden Share.

It could be that this is what happened, yet wasn't picked up by the FL. If this is so, are the FL admitting to their own incompetence when they only deducted us 10 points?

Remember the hunt for the Golden Share fiasco? All that talk of 'beneficial ownership'?

'What a tangled web we weave, when we practice to deceive.'

 

[oldskyblue58]

Yes agreed TRS but is that asset stripping ............... yes it breaks league rules but is it a provable criminal act? The key is was anything that existed in May 2011 actually transferred at nil value by March 2013 to CCFC H Ltd that unfortunately is the clever bit. Plus it wasnt then SISU that took away and transferred the Golden share of something everyone knew to be a big loss maker with massive loans from its owners.

If you look at only CCFC Ltd (which the insolvency court would do) the biggest losers are the owners who are accused by some of wrong doing

there are some very clever minds behind this on both sides

Was there a plan to avoid payment of a particular creditor on the face of it there would appear to be cause for concern in that regard........ but it has to be proven, and then proven it was illegal.......

 

[lordsummerisle]

Thr documents concerning the buying and selling of Fox show quite the opposite of asset-stripping I'd have thought.

 

[TheRoyalScam]

Agree with what you say OSB58, however those 23 players in CCFC Ltd were worth over £5.5m on 31/5/2011 - if that's not an asset I don't know what is.

Ignoring the FL 'rules', here's the SFO's description of 'Phoenixing':

• "Phoenixing" - directors move assets from one limited company to another (Ltd to (Holdings) allegedly) to 'secure' the benefits of their business (the playing squad - in effect their only asset apart from the GS) and avoid the liabilities (the Ricoh lease). Most or all the directors will usually be the same in both companies (allegedly true in this instance I believe).

 

[oldskyblue58]

they were not worth £5.5m TRS that was the original cost of the contracts that had been purchased. The contracts are written down over the period of the contract. By 31/05/11 the actual worth of those contracts was £1.8m. By say 31/05/12 how many players were in the squad that we had actually paid for? How many of that 23 were still left because they were sold, paid off or out of contract ? What if players with no contract previously or an expired contract were signed on by CCFC H? Why do you think that TF has made a big thing of beneficial ownership by CCFC H ?

Pheonixing is usually the trade turning up in an entirely new company often with a similar name...... in this case CCFC H owned CCFC ltd and assets are under tax and company law transferable between group companies. Is that a plan to defraud a creditor it is not as clear cut as it may seem, otherwise i am sure ACL would have been able to prove it by now. (not saying it is or it isnt just that as always things are not necessarily as clear cut as people might think)

 

[njdlawyer]

There are relatively few SFO prosecutions of company directors for alleged dodgy dealings

The conviction rate for the matters that SFO do pursue is a lot lower than the general criminal conviction rate

The reason is that dishonesty (which is obviously a fundamental requisite) and an intention to defraud are very difficult to prove in cases involving complex company financial movements

 

[Broken Hearted Sky Blue]

There are relatively few SFO prosecutions of company directors for alleged dodgy dealings

The conviction rate for the matters that SFO do pursue is a lot lower than the general criminal conviction rate

The reason is that dishonesty (which is obviously a fundamental requisite) and an intention to defraud are very difficult to prove in cases involving complex company financial movements

You are correct but wouldn't an investigation be seen by certain investors as shall we say inconvenient:thinking about:

 

[duffer]

they were not worth £5.5m TRS that was the original cost of the contracts that had been purchased. The contracts are written down over the period of the contract. By 31/05/11 the actual worth of those contracts was £1.8m. By say 31/05/12 how many players were in the squad that we had actually paid for? How many of that 23 were still left because they were sold, paid off or out of contract ? What if players with no contract previously or an expired contract were signed on by CCFC H? Why do you think that TF has made a big thing of beneficial ownership by CCFC H ?

Pheonixing is usually the trade turning up in an entirely new company often with a similar name...... in this case CCFC H owned CCFC ltd and assets are under tax and company law transferable between group companies. Is that a plan to defraud a creditor it is not as clear cut as it may seem, otherwise i am sure ACL would have been able to prove it by now. (not saying it is or it isnt just that as always things are not necessarily as clear cut as people might think)

It's an interesting point.

Let's say we disregard the players - what about all of the trade that was done from CCFC Ltd.

Where did all that go - the ticket revenue, the sponsorship, the TV money etc? The golden share itself, which is the right to play in the league, that's an asset of immense value. At what point did Holdings assert beneficial ownership of that, and what value was received by Ltd in receipt of it.

The £60m of debt - where did that come from? What services or products or funds did CCFC Ltd receive in order to run up such debts?

I think, personally, there are still a lot of questions that need looking at. There does seem to be a prima facie case here in that there is little of value left in CCFC Ltd but huge liabilities. How could the directors let this happen?

 

[shmmeee]

I wonder about Joe Murphy. Signed for us 30th June 2011.

Otium was set up 21st November 2011. Fisher arrived then or shortly after I think.

Murphy (I think) is the only player on the books before Fisher that hasn't either been sold or signed a new contract (as far as I am aware).

If any player of value was moved, it'll be him.

 

[Godiva]

It's an interesting point.

Let's say we disregard the players - what about all of the trade that was done from CCFC Ltd.

Where did all that go - the ticket revenue, the sponsorship, the TV money etc? The golden share itself, which is the right to play in the league, that's an asset of immense value. At what point did Holdings assert beneficial ownership of that, and what value was received by Ltd in receipt of it.

The £60m of debt - where did that come from? What services or products or funds did CCFC Ltd receive in order to run up such debts?

I think, personally, there are still a lot of questions that need looking at. There does seem to be a prima facie case here in that there is little of value left in CCFC Ltd but huge liabilities. How could the directors let this happen?

I think this is where the much mentioned Management Fees kicks in. Holdings charged Limited a management fee to off set the income in Limited.
I think. But I am not an accountant.

 

[Godiva]

I wonder about Joe Murphy. Signed for us 30th June 2011.

Otium was set up 21st November 2011. Fisher arrived then or shortly after I think.

Murphy (I think) is the only player on the books before Fisher that hasn't either been sold or signed a new contract (as far as I am aware).

If any player of value was moved, it'll be him.

But there was a small asset value regarding players left in Limited, wasn't there? I thought initially it was Bell/Sheffers on long contracts, but it could well be Murphy.

 

[shmmeee]

But there was a small asset value regarding players left in Limited, wasn't there? I thought initially it was Bell/Sheffers on long contracts, but it could well be Murphy.

Bell and Sheffers (and Baker) signed extensions IIRC. Because everyone was asking WTF at the time. They would (I think) be the only ones switched to Holdings left when Otium took over. I've wondered if some of the bomb squad were in Ltd because of them not being registered with the club, but that's also reasonable practice.

Were the player assets bought by Otium? Or was it moved before then? I can't remember.

 

[oldskyblue58]

I think to get to the bottom of the player contracts you would need to see the contracts held by each player since 31/05/10 until june 2013 and to see who were the parties detailed on those contracts (just to be clear that is the contracts each individual has not the ones held by the club - 3rd party evidence is usually stronger). You would also need to see copies of all the correspondence held by the Football League in respect of each player in that period again to see who was party to the registration but also to see who originated the registration. Compare the two and we might get somewhere in clarifying it all. Something surely Appleton should have or has done? If so, surely it is not beyond wit of man to produce that evidence and put this to bed one way or another

Everyone has been keen to blame the FL for not registering the players with the company holding the golden share, rightly so because their proceedures should make sure that this happened. However it was not the FL that originated the transactions, filled in the applications, drew up the contracts etc, it was the club. The directors and secretary of CCFC would be fully involved and were fully aware that the league membership was in CCFC Ltd (remember the documented minutes from 2008). Therefore was the error the FL not checking or was the error the directors filing incorrect paperwork in the first place?

Contracts and registrations follow the share...... it is not the other way round

oh and to be clear the share was still registered with CCFC Ltd when the football league filed its annual return at Company House June 2013

 

[Godiva]

I think to get to the bottom of the player contracts you would need to see the contracts held by each player since 31/05/10 until june 2013 and to see who were the parties detailed on those contracts (just to be clear that is the contracts each individual has not the ones held by the club - 3rd party evidence is usually stronger). You would also need to see copies of all the correspondence held by the Football League in respect of each player in that period again to see who was party to the registration but also to see who originated the registration. Compare the two and we might get somewhere in clarifying it all. Something surely Appleton should have or has done? If so, surely it is not beyond wit of man to produce that evidence and put this to bed one way or another

Yes, I agree. Next week we should all be a lot wiser. As this administration process has caught some widespread attention I cannot see Appelton doing a 'sloppy' or 'inacurate' job.

Everyone has been keen to blame the FL for not registering the players with the company holding the golden share, rightly so because their proceedures should make sure that this happened. However it was not the FL that originated the transactions, filled in the applications, drew up the contracts etc, it was the club. The directors and secretary of CCFC would be fully involved and were fully aware that the league membership was in CCFC Ltd (remember the documented minutes from 2008). Therefore was the error the FL not checking or was the error the directors filing incorrect paperwork in the first place?

Contracts and registrations follow the share...... it is not the other way round

oh and to be clear the share was still registered with CCFC Ltd when the football league filed its annual return at Company House June 2013

You could argue both the club and the FL are equally to blame. It will be interesting to see how far back ccfc have filed incorrectly.

 

[duffer]

I think this is where the much mentioned Management Fees kicks in. Holdings charged Limited a management fee to off set the income in Limited.
I think. But I am not an accountant.

Not quite sure how that works.

If I run company A (Ltd), and I've got something of value I want to give to company B (Holdings), then company B has to pay me for it or it's surely an undervalue transfer.

I'm not an accountant either, but I ran my own business for a while and that's how I understood it. For example, when I sold my company vehicle to myself, I had to do it at market value. To do otherwise would have been, in effect, defrauding the company which is a separate legal entity.

I guess you might be able to confuse this by saying that Company B did x millions worth of work for Company A, and offset the value that way, but I'm not sure the books show that or that's it's necessarily acceptable legally.

In terms of the directors duties, it actually seems a little clearer to me. The directors allowed CCFC Ltd to run up huge debts whilst seemingly having no or few assets or trade. Fisher signed the books in June 2012 to the effect that CCFC Ltd were a going concern - by Jan 2013 all that was in the company was massive debt, substantial liabilities, and relatively few assets.

To me that means that either most of the assets and trade was moved out of CCFC Ltd between Jun 2012 and Jan 2013 (to what end, creditors might ask), or that at the point of signing the books CCFC Ltd in Jun 2012 the transfers had already happened and the accounts signed off were not a true representation of the company's status.

Either way, that could leave the directors of CCFC Ltd on the hook, in my opinion. Either they moved assets in a way that seemed designed to prejudice creditors, or they did not sign true accounts.

I hasten to add that I'm only going on my interpretation of things here - for all I know it's all absolutely and entirely above board. I'd love to see it all clarified in court though.

 

[oldskyblue58]

Been thinking about the transfer value of the trade. The trade has for many years made huge losses, incurred big debts to finance that trade, with little prospect of ever repaying. So what is the value of the trade? Could it reasonably be transferred at nil value?

Bear in mind assets can be transferred between group entities in Company & Tax law. Football League rules dont permit it without written permission from the FL Board -but do they say anything that says it takes precedence over the law of the land in this particular matter? Could they? What is the FL remedy on this? or do they just employ their discretion for an easy life

You could argue it is about the CCFC brand value, well the trademark is owned by CCFC H Ltd per the trademark register

Now none of that stops there being a plan to isolate and not pay a particular creditor (that could be illegal but we dont know), none of that stops us having concerns about creditors being mislead by the accounts information, none of that stops many believing that Football League rules have been breached. None of that stops the feeling of unease and distrust many of us have about what has gone on. But the more you dig and put together the pieces the more you realise how hard and therefore how costly an action would be. The only place this can be proven one way or another is in Court, SISU and their advisors could be banking on no one having the funding to do it and the authorities that could not having the will to do so if indeed there was a case to answer.

So having engineered the movement of the player assets (assuming no contracts registered in CCFC Ltd by 21/03/13) what value is in CCFC ltd ? Was there in reality no rights to any assets by 21/03/13?

Think it is understandable why it is so difficult to make a specific case of wrong doing.

to be clear I am not making an accusation of wrong doing by any party involved.

My opinion is that this has all been planned for some time. Was it set up as plan B whilst attempting to distress the Bank loan and taken forward then as the plan when that didnt happen? Indeed you have to wonder whether it was part of the original plan that would have distressed the loan with phase 2 of that plan being breaking the lease with ACL........ but that all just conjecture

 

[duffer]

Been thinking about the transfer value of the trade. The trade has for many years made huge losses, incurred big debts to finance that trade, with little prospect of ever repaying. So what is the value of the trade? Could it reasonably be transferred at nil value?

Bear in mind assets can be transferred between group entities in Company & Tax law. Football League rules dont permit it without written permission from the FL Board -but do they say anything that says it takes precedence over the law of the land in this particular matter? Could they? What is the FL remedy on this? or do they just employ their discretion for an easy life

You could argue it is about the CCFC brand value, well the trademark is owned by CCFC H Ltd per the trademark register

Now none of that stops there being a plan to isolate and not pay a particular creditor (that could be illegal but we dont know), none of that stops us having concerns about creditors being mislead by the accounts information, none of that stops many believing that Football League rules have been breached. None of that stops the feeling of unease and distrust many of us have about what has gone on. But the more you dig and put together the pieces the more you realise how hard and therefore how costly an action would be. The only place this can be proven one way or another is in Court, SISU and their advisors could be banking on no one having the funding to do it and the authorities that could not having the will to do so if indeed there was a case to answer.

So having engineered the movement of the player assets (assuming no contracts registered in CCFC Ltd by 21/03/13) what value is in CCFC ltd ? Was there in reality no rights to any assets by 21/03/13?

Think it is understandable why it is so difficult to make a specific case of wrong doing.

to be clear I am not making an accusation of wrong doing by any party involved.

My opinion is that this has all been planned for some time. Was it set up as plan B whilst attempting to distress the Bank loan and taken forward then as the plan when that didnt happen? Indeed you have to wonder whether it was part of the original plan that would have distressed the loan with phase 2 of that plan being breaking the lease with ACL........ but that all just conjecture

Hi OSB, not trying to shoot you down here, but don't asset transfers between group companies still need to be at market value, unless they are classed as distributions in which case the company transferring the asset must be profitable:

http://www.lewissilkin.com/en/Journ...oup-at-book-or-market-value.aspx#.UjBuVj_5aeI

Happy to be corrected here if I've misunderstood.

And the kind of things I'm talking about here is the stuff like ticket sales, sponsorship revenue, TV money etc. And indeed the golden share. Didn't this all reside with CCFC Ltd?

And even if those assets/income streams were transferred legitimately, wouldn't that would mean that Ltd was trading insolvently. If the transfers occurred before the books were signed off in Jun 2012, then what TF signed wasn't a true record, was it? If they occurred after that point then I suspect the courts might see that as suspect in terms of its effect on creditors.

I take your point about the costs of taking this on in court, but I can't understand why ACL wouldn't sign the CVA unless they intended to do that or had a clear idea that someone else would.

 

[singers_pore]

Not quite sure how that works.

If I run company A (Ltd), and I've got something of value I want to give to company B (Holdings), then company B has to pay me for it or it's surely an undervalue transfer.

I'm not an accountant either, but I ran my own business for a while and that's how I understood it. For example, when I sold my company vehicle to myself, I had to do it at market value. To do otherwise would have been, in effect, defrauding the company which is a separate legal entity.

I guess you might be able to confuse this by saying that Company B did x millions worth of work for Company A, and offset the value that way, but I'm not sure the books show that or that's it's necessarily acceptable legally.

In terms of the directors duties, it actually seems a little clearer to me. The directors allowed CCFC Ltd to run up huge debts whilst seemingly having no or few assets or trade. Fisher signed the books in June 2012 to the effect that CCFC Ltd were a going concern - by Jan 2013 all that was in the company was massive debt, substantial liabilities, and relatively few assets.

To me that means that either most of the assets and trade was moved out of CCFC Ltd between Jun 2012 and Jan 2013 (to what end, creditors might ask), or that at the point of signing the books CCFC Ltd in Jun 2012 the transfers had already happened and the accounts signed off were not a true representation of the company's status.

Either way, that could leave the directors of CCFC Ltd on the hook, in my opinion. Either they moved assets in a way that seemed designed to prejudice creditors, or they did not sign true accounts.

I hasten to add that I'm only going on my interpretation of things here - for all I know it's all absolutely and entirely above board. I'd love to see it all clarified in court though.

You may not be an accountant but you have hit the nail on the head perfectly. It appears that SISU have essentially moved the assets out of Ltd and left the lease liability in Ltd. There are many legal precedents for such actions and case law has found them to be illegal. This is not over by a long chalk - I fully expect ACL to pursue this through the courts.

 

[oldskyblue58]

Hi OSB, not trying to shoot you down here, but don't asset transfers between group companies still need to be at market value, unless they are classed as distributions in which case the company transferring the asset must be profitable:

http://www.lewissilkin.com/en/Journ...oup-at-book-or-market-value.aspx#.UjBuVj_5aeI

Happy to be corrected here if I've misunderstood.

And the kind of things I'm talking about here is the stuff like ticket sales, sponsorship revenue, TV money etc. And indeed the golden share. Didn't this all reside with CCFC Ltd?

And even if those assets/income streams were transferred legitimately, wouldn't that would mean that Ltd was trading insolvently. If the transfers occurred before the books were signed off in Jun 2012, then what TF signed wasn't a true record, was it? If they occurred after that point then I suspect the courts might see that as suspect in terms of its effect on creditors.

I take your point about the costs of taking this on in court, but I can't understand why ACL wouldn't sign the CVA unless they intended to do that or had a clear idea that someone else would.

But my point is if the assets (contract) expired then registering a new contract elsewhere is open to argument as to whether any value has been transferred at all because when it expired CCFC ltd ceased to be entitled to it. That might contravene League regulations but it doesnt break the law

If the trade runs at a loss and has done since 1995 is there any value or worth to it...... would book value and market value be the same? ..... £nil

Had agreements for sponsorship ceased when the sale to Otium was completed? ...... did CCFC Ltd have rights to it because in the accounts sponsorship is shown in CCFC H Ltd books

THe golden share is a peculiar thing..... the company holds it but it doesnt own it in the normal sense...... the FL can take it back at any time ..... then reallocate at their discretion.

Did any of these changes take place before 19/06/12...... did they need to?...... were SISU and their advisors aware then of what we are discussing now?

The point I am making is that it is not as straight forward as it might seem.

My guess is that ACL would like a government organisation to investigate rather than spend the money ACL has hence they will welcome Ainsworths involvement

 

[duffer]

But my point is if the assets (contract) expired then registering a new contract elsewhere is open to argument as to whether any value has been transferred at all because when it expired CCFC ltd ceased to be entitled to it. That might contravene League regulations but it doesnt break the law

If the trade runs at a loss and has done since 1995 is there any value or worth to it...... would book value and market value be the same? ..... £nil

Had agreements for sponsorship ceased when the sale to Otium was completed? ...... did CCFC Ltd have rights to it because in the accounts sponsorship is shown in CCFC H Ltd books

THe golden share is a peculiar thing..... the company holds it but it doesnt own it in the normal sense...... the FL can take it back at any time ..... then reallocate at their discretion.

Did any of these changes take place before 19/06/12...... did they need to?...... were SISU and their advisors aware then of what we are discussing now?

The point I am making is that it is not as straight forward as it might seem.

My guess is that ACL would like a government organisation to investigate rather than spend the money ACL has hence they will welcome Ainsworths involvement

Yep, see what you're saying entirely, and take your point that the overall value of the trade might be nil (or less!).

However, if you just took the positive stuff - the TV rights, the sponsorship, the ticket sales etc, and left the liabilities, particularly the lease, then overall that wouldn't be a zero value. And you couldn't sign off accounts which suggested that all of those things were still in Ltd, presumably.

Like you say, in truth it will almost certainly be for the courts to sort. If ACL don't take it on though, I be surprised if we'll see anyone else pitch in.

Personally speaking it would seem a waste of time (and ten points) to not sign the CVA if they're just going to give up the fight now. I can see why that would upset people.