Pompey.

tvfootball2pm 10 April 2013

PST lawyers enter the court room

Birch arrives
Terms agreed in principle. Must be documented by 3pm
Portpin not in court.
3pm: Birch smiling.
Pompey fans in court with tears in their eyes.
Ground valuation being discussed
Portpin’s rep says Harris was invited to make an offer.
Judge very firm.
Waiting for ruling.
Tomlin Order agreed. TRUST WILL GET THE CLUB
PST members file into court
Judge reading terms
THE POMPEY SUPPORTERS TRUST OWN POMPEY
Judge (who admitted he was a Hull City fan) says decision should be made public and a full statement will be issued in due course.
Good-bye Balram Chainrai. Wish we could say it was nice knowing you. Anyway you still have your health clubs and your membership of the India Club.

PUP

[back]

The High Court battleground which will decide a city’s football club’s future

fratton

It is hoped that this week’s court case will provide a final decision over the valuation of Fratton Park

  • by Neil Allen
Published on the 07 April
A city awaits the verdict of a High Court case to discover whether its club will have a future in its existing form.
English football will look on in ghoulish fascination to glimpse the outcome before quickly forgetting and hurrying along to proclaim its next foreign visionary owner.
And insolvency practitioners will observe with interest the conclusion of a landmark case which will have massive ramifications within its own circles.
More than Pompey’s existence rides on next week’s valuation hearing – the tentacles reach much, much further than that.
An inspiration, a case study or an epitaph -–regardless, history will be created in the setting of the Rolls Building in London.
PKF may have changed their name to BDO following last week’s merger, nonetheless the line-up will be unaltered as they take on Portpin and their charge over Fratton Park.
Katherine Holland QC from Landmark Chambers will continue to represent them and Trevor Birch will remain at the forefront and in attendance.
Sitting behind the administrators will be the Pompey Supporters’ Trust, hoping a judge will look favourably on their £3m bid for Fratton Park.
Their own lawyers, Verisona, will also be present but not party to the hearing.
At the heart of Portpin’s own presentation will be Keith Harris’ consortium, who have already negotiated £6.3m to purchase the charge on the ground. Not the club.
The case serves as the most high-profile Paragraph 71 application there has been in this country.
In accordance with the Insolvency Act 1986, in the instance of someone who has a fixed charge over an asset, the court can order that charge to be removed against the will of the charge holder.
It terms of precedence for such a case, there isn’t a lot. Only a handful of such cases have ever been heard before.
Justice Sales sat in December the last time the hearing opened in court. The identity of the judge this time around will not be finalised until on the day.
Irrespective of that, the judge will be aware his verdict will be scrutinised intently by the insolvency world. A landmark in the eyes of the court, as well as those warring parties outside of it.
As a direct result, there is every possibility the outcome may not be ruled upon next week, despite the ever-growing belief among Blues fans they could own their club before the trip to Brentford on April 13.
Instead it could be considerably closer to the April 19 ‘backstop’ date which has been previously recognised by the courts as a deadline.
They are fully aware anything beyond that could cause problems with the Football League, who need to grant membership and rubber-stamp Pompey’s emergence from administration.
Of course, at this stage even the starting date of this eagerly-anticipated hearing remains uncertain. As a ‘floating’ case, proceedings in the scheduled two-day event may not necessarily start on Wednesday, April 10.
That will be fixed on the morning when the court will assess its order of business in accordance with its list of current cases.
It means the BDO v Portpin case will discover on the Wednesday morning whether the hearing will start that day or the following (April 11). Certainly that could mean a wasted journey for any fans attending.
On to the make-up of the case itself and the court must balance the interests of the creditors with looking at the interests of the secured charge holder.
Speaking specifically, it will come down to whether the offer being made by the purchaser (the Trust) is a fairer offer given the value of the asset.
With Harris’ consortium having bid £6.3m for Fratton Park as opposed to the Trust’s £3m, the judge must evaluate which fulfils such criteria.
In addition, the community bid has five independent valuations for Pompey’s home, none of which reach the £3m currently tabled.
Of course, up until February 6, the Trust’s bid was the only one on the table and had been since Portpin failed to satisfy the Football League following negotiations back in October 2012.
The emergence of Harris with backers Pascal Najadi and Alan Hitchins altered the battlefield dramatically.
Then came the Football League’s stipulation that, in terms of awarding League membership, no other bidders would be considered at that late stage and it was either the Trust or nothing.
Since then, Harris has altered a bid which initially centred on renting the ground from Portpin and buying the club out of administration.
That is now in the form of an unconditional £6.3m bid for the Fratton Park charge – a bid that does not include the acquisition of the football club from the administrators.
Crucially, in respect of the creditors, that would bypass the agreed Company Voluntary Arrangement.
By forming an agreement solely with Portpin for their charge, Balram Chainrai, Levi Kushnir and Co will be the only creditors to benefit from the situation.
As the main secured creditors – to the tune of £18.6m – Portpin could also argue the interests of creditors are being met with this deal.
Then it is all eyes on the judge and the decision of which valuation fulfils the point of law he is presiding over.
It is also in his hands to decide whether an appeal can be made. If required.
It would be downright folly and recklessly irresponsible to predict what the outcome of next week’s Rolls Building meeting will be.
We watch with bated breath.
many apologies to those who are waiting for further news of their favourite club.
Recent results:
9/3/2013 H Bury  2:0 🙂
13/3/2013 A Leyton Orient 1:0 😦
16/3/2013 A Doncaster  1:1 :¬()
23/3/2013 H Coventry  2:0 🙂
30/3/2013 A Preston  1:1 :¬()
1/4/2013 H Tranmere 1:0  🙂
6/4/2013 H Stevenage  0:0  :¬()
But for all the improvement in form we are still three from bottom.

Stop press:

The administrators of Portsmouth Football Club (2010) Ltd can confirm that the court case to determine a possible sale of Fratton Park to the PST will begin on either Wednesday, April 10 or Thursday, April 11.

pressErtl

Johnny Ertl shares the joy of victory

Full Report from Portsmouth NEWS

Crewe Alexandra v Pompey.

By Neil Allen
Published on Saturday 2 March 2013 16:59
Pompey ended their 134-day wait for a victory by defeating Crewe 2-1.
October 20 was the last time the Blues won a match, a 3-1 success over Shrewsbury at Fratton Park.
The club-record wretched run of 23 games without success was finally brought to a halt, though, at The Alexandra Stadium.
During a Patrick Agyemang-inspired first half, Pompey were 2-0 up in the opening 29 minutes.
The on-loan striker scored one and created the other for David Connolly to give the visitors a half-time advantage.
Crewe dominated possession after the break and Mathias Pogba pulled one back in the 63rd minute.
It sparked a nervy finale but Guy Whittingham’s men held on to end their long. long wait.
Pompey were unchanged from the side which drew 1-1 to MK Dons on Tuesday night.
The bench also remained unaltered, with Shaun Cooper still missing following injury and Sam Sodje serving the final game of his three-match suspension.
It took just six minutes for Whittingham’s men to break the deadlock through a quality piece of play from Agyemang.
Walker slipped the ball into the striker’s feet and he held it up with back to goal before cleverly turning and firing in a low shot into the near post corner.
The Blues looked a confident, flowing side in the early stages and, on 22 minutes, a great move down the right saw Connolly slide the ball to the overlapping Jed Wallace.
Wallace produced a dangerous, low ball across the face of goal which Mark Ellis did well to prod past the post for a corner with visiting players everywhere inside the box.
Pompey doubled their advantage in the 29th minute through classy play from Agyemang once again.
Johnny Ertl started it all off with a midfield interception and drove forward before releasing Pompey’s goalscorer down the left channel.
Agyemang forced his way to the byline and clipped a delightful cross to the far post where the unmarked Connolly steered the ball home.
Moments later at the other end, Pogba should have pulled one back only to inexplicably fail to control Ajay Leitch-Smith’s pass when clean through.
On the stroke of half-time, Wallace should have effectively wrapped up the match, only to sidefoot Agyemang’s pass over the bar from around the penalty spot when he should have done better.
After the break, Crewe dominated possession but Ertl dispossessed Pogba to surge forward and unleash a drive which Steve Phillips did well to parry.
Yet the hosts pulled one back in the 63rd minute when Simon Eastwood pulled off a brilliant save to deny Byron Moore and when the ball was knocked back, Pobga stabbed it home from close range.
It was a nervy finish for the visitors, although substitute Reed did strike the right-hand post following a corner.
And after four minutes of time added on, Pompey at last had their win.
League One
CREWE 1 (Pogba 63)
POMPEY 2 (Agyemang 6, Connolly 29)
Att: 5,120
Crewe: Phillips, Tootle (Mellor 65), Davis, Ellis, Murphy, Pogba, Leitch-Smith, Moore, Robertson, Osman, Aneke (Clayton 46). Subs: Martin, Dugdale, Turton, Ray, Colclough.
Pompey: Eastwood, Moutaouakil, Gyepes, Rocha, Butler, Wallace, Ertl, Racon, Walker (Reed 76), Agyemang (Akinde 86), Connolly (Keene 46). Subs: Smith, Webster, Harris.
Referee: Geoff Eltringham (Durham)

We would just love a comment from Mr. Balram Chanrai. We are told he is a member of the India Club so if anyone can help….
At first glance it seemed like bad news. Another spanner in the Pompey Trust bid for ownership of the club. Balram Chainrai’s Portpin are not happy at the Football League’s rejection of the Keith Harris bid for Pompey. On Friday 22 Februaury the BBC website reported:
Portpin claims the Harris bid would mean it received £6.3m for the stadium, as opposed to the £3m currently being offered by the PST.
It claims ruling out consideration of other offers “unlawfully limits the ability of the administrator to fulfil its role in securing the best terms for creditors”.
And Portpin has warned that if alternative bids are not considered, the League “will leave itself exposed to legal action for damages from creditors which could amount to millions of pounds”.
A spokesperson from Portpin added:
“We have made clear that we are agnostic as to the source of the solution for Portsmouth Football Club and welcome whichever bid offers both the best deal for the creditors of the club and provides the highest degree of certainty for the supporters in bringing Portsmouth out of administration.
“There are now at least two offers for the club, one from the Supporters Trust and one from a consortium which includes Keith Harris, and legally they must both be considered on their merit.
“After more than a year of uncertainty, this process must be brought to a close. We are calling on Greg Clarke, Chairman of the Football League, to commit publicly to the Football League reviewing any bid that is put to it for approval by the administrators.
“If Mr Clarke fails to provide everyone with the certainty that is needed on this issue, the Football League will have no option but to accept its share of the responsibility for the damage that could be caused to Portsmouth Football Club, its creditors and the other members of the Football League which may not end up recouping any of the money owed.”
Pompey blogger Micah Hall, on the other hand, sees this as good news.
Here is the full text of his rationale:
The press release from Portpin is great news for the PST. It contains a series of tacit admissions which reinforce my certainty that the Fans bid for Pompey will succeed.
Admission number 1:
Their threat of legal action against the Football League is obviously intended to mean they will attempt to sue the League for the difference between what the PST deal would give them and the Harris deal would offer.
Until that actually happens and they are deprived of the money they would have no case. So this would be retrospective legal action against the League. It’s hard to see what claim they would have against the League in any case, Portpin as creditors have no contractual relationship with the League. It’s not The Leagues job to look after Portpin.
Portpin could ask PKF to sue the League on their behalf after selling Pompey to the PST but I’ve got a funny feeling PKF won’t fancy it.
Anyway, it’s all irrelevant to us.
So tacit admission number 1 is that they can’t stop the league standing firm in their decision to only deal with the fans bid. Good news!
Admission number 2:
If Portpin were so confident of their valuation case they would simply say – “It’s all academic, when we win the valuation case the League will be forced to look at the Harris bid.”
However, their legal attempts to force Portsmouth City Council and now the Football League to change tack reveal the fundamental weakness of their position.
A source close to Portpin has rushed to assure anyone who will listen that they will win the case on valuation based on a bid from Simon Jordan that apparently offered £8m for the ground and from Harris whose valuation is £5m. Their fundamental problem is that these valuations are stunningly irrelevant.
Those ‘bids’ are not part of the process. Unless it is a bid that can succeed it has no relevance. The market value of the land is what someone who can buy Pompey will pay for it, not what someone who happens to want to but isn’t or can’t would pay for it. It’s totally irrelevant.
The reason lies in Section 71 of the Insolvency Act under which the valuation case would be heard. The administrator is able to ask the court to release a charge at market value as long as it is in line with the aims of the administration. The aim of the administration is to secure the best deal for creditors.
And here is the rub: you can only collect the £8.5m in parachute payments to give to creditors if you can take the club out of administration and receive the golden share. The Harris bid cannot receive the golden share so their bid cannot serve the aims of the administration, so PKF are obliged to forget about it. Simon Jordan’s bid is not a bid – it’s gone and it’s too late to return. Sulaiman Al Fahim’s heroic attempt to open a bank account never amounted to anything.
So market value comes down to two factors:
1. What a bidder still in the process is prepared to pay
2. What an independent valuer assesses the value of the land to be
We know that the fans bid has a series of valuations. Not one of which is as high as their offer of £3m.
So if Portpin were confident that their own valuations would blow this out of the water, why are they trying to push the Football League and Portsmouth City Council into retreat? (Incidentally, Harris spokesman Bick told me the legal grounds on which they felt the Council’s loan was susceptible to challenge. By a curious process of telepathy, Portpin issued a challenge on those same grounds a few days later. Of course Portpin and Harris are in no way connected so just a massive coincidence).
This is seemingly an admission that they don’t fancy their chances of winning the valuation case one bit.
Admission number 3:
Why didn’t Portpin lodge their own bid? They’ve repeatedly tried to tell people that despite the 6 page letter they got from the League explaining why there was little or no likelihood of them passing the Owners and Directors test, that they were able to pass.
Ok, so why not resubmit their own bid three months ago? Why wait till now to fight for the Harris bid to be considered?
Admission number 4:
If the Harris bid values Fratton Park at £5m and Keith Harris intends to rent Fratton Park for one year, then the only possible conclusion to be drawn from Portpins figure of £6.3m for Fratton Park is that the rental for that year is £1.3m. Anyway, whether these numbers are correct or not, the whole arrangement of paying rent for Fratton Park was described in the following terms in 2012, by er, Portpin:
 ”We strongly believe that Fratton Park and the Club must stay together as one entity. There will be no cash drain for lease payments to a third party for the use of Fratton Park”
Portpin 2012
In order for Harris to lease Fratton Park and then buy it from Portpin, Portpin would have to own it. At present, they do not, they simply have a charge on it – with Portsmouth Football Club in administration owning the freehold.
So tacit admission number 4 is that the first thing that would happen under the Harris deal is that Portpin would be given the freehold of Fratton Park. Can anyone possibly imagine the Pompey Supporters Trust giving fans money to Harris and giving Fratton Park to Portpin in the process? Would we ever get Fratton Park back? Read Neil Allen’s piece from Harris PR man David Bick and decide for yourselves;
The ‘stadium deal’ described by Bick centres on leasing Fratton Park from Portpin rather than buying. It is with a view to a permanent  purchase, although Bick was unable to pinpoint the time frame for completion of the sale. What’s more, he admits Portpin wanted it structured that way.Bick added:
‘There’s a deal leasing the stadium. In terms of Keith buying it, they (Portpin) do not want to do it that way at the moment.‘The sellers want to take rent for a period of time. It is particularly to do with future value, they don’t want a panic sale or lower valuation.
The Portsmouth News 16th February 2013.
To me that looks like there would be a valuation done in a year. Which is where we came in really in this blog. Valuations seem to be somewhat controversial and difficult.
Final point on this: Portpin said that paying rent to a third party threatened the clubs sustainability.  If they were right and Pompey were to hit the rocks again, Portpin would be outright owners of Fratton Park this time.
Tacit Admission number 5:
Unless Portpin can get the Harris bid back into official consideration, they are going to be out of Pompey in the next 3 or 4 weeks.
The other problem for the Harris bid is this: sources close to the bid confirmed to me and others at the outset that it was an outline bid, a proposal. According to sources who met with senior trust members at the time there were weeks of work to be done before the bid could actually go to the Football League.
The league met three days later and told PKF it was a no-go, at which point presumably no further work was done on it by PKF. This is all academic, because that deal isn’t on the table any more. Harris ‘restructured’ his bid again on Monday. Presumably he resubmitted it to PKF, and presumably again they did no further work on it. So there is no bid. It’s paper no-one has bothered to read. So any approval by the creditors committee is also presumably voided by the fact that this is now not the same deal, although possibly the terms to creditors may be the same.
All that bluster about being ready to complete and not requiring due diligence is so much hot air. Harris may not, but PKF have a duty to only pass a bid to the League when they are sure it will meet all their criteria, business plan etc etc. This process has taken three months since the Trust revised its bid and took at least as long to verify Portpin’s before passing to the Football League.
And the League have confirmed three times they won’t change their minds so no-one is even going to start the process, let alone finish it.
Which means, we are going to win.
============================================================================
Micah Hall is on Twitter here.
In progress with thanks to Micah Hall
HALL RIGHT NOW: Revealed – The true story behind Ali Al Faraj
Sun 07th Oct 2012 22:35 by Micah Hall
Ever since the name Ali Al Faraj was first revealed as a potential billionaire owner to an expectant Pompey public, the questions about who he is, what his motives were and even whether he exists have abounded. Today, pompey-fans.com can reveal the truth behind Ali al Faraj.
He does exist. His passport was passed to the Premier League in August 2009. The league checked with the Saudi-Arabian embassy and the Saudis investigated and confirmed that Ali al Faraj did exist and lived in Riyadh. He has since been used as the straw man in several small London property deals with Yoram Yossifoff and allegedly been sued by his lawyers in Saudi Arabia for non-payment of fees.
However, there is not one shred of evidence that at any point he exercised control over Pompey.
So who did? Our story begins in 2007 when Arkadi Gaydamak (father of Sacha Gaydamak) purchased a property company, Ameris Holdings, from Balram Chainrai and Levi Kushnir in a deal brokered by Ron Mana and Yoram Yossifoff.
By 2008, Arkadi Gaydamak was under pressure with the French courts investigating his involvement in the Angolan civil war and a crash in Israel’s property market. The Israeli property market was under assault from two directions: the crash in asset value and the man who had loaned money to several Israeli property CEOs – Shelley Narkis, the King of the Grey Market and Israel’s biggest loan shark. Narkis is a convicted extortionist, jury tamperer and is feared throughout Israel. One of his non-motorbike riding, machine gun-toting employees is our old friend Daniel Azougy, debt collector extraordinaire.
In the financial whirlwind which followed, various CEOs fled Israel. Boaz Yona of Heftsiba to a hideout in Italy and Arkadi Gaydamak, who owned Ocif investments, to Moscow.
The domino effect destroyed Heftsiba and OCIF investments, and left Gaydamak unable to finish paying for Ameris Holdings. Arkadi’s many many creditors from his Israeli businesses included Ron Mana, Yoram Yossifoff, Daniel Azougy and Balram Chainrai and Levi Kushnir. Azougy was a long time friend of Mana and Yossifoff.
Mana, Chainrai and Kushnir were awarded a lien on the assets of Betar Jerusalem, but Israeli insolvency law being very different to UK law, they had trouble extracting any money. In January 2009, Daniel Azougy attempted to convince the Betar general manager to transfer all the club’s money out of the club claiming to be working for Gaydamak. A swift phone call to Moscow later, and this attempt to extort money from Betar was quickly and very publicly rebuffed. Azougy got a flea in his ear and no money.
The following month, Azougy and Narkis, visited Arkadi Gaydamak in Moscow to try and get their money back.
As with Azougy’s visit to Betar, he came back from Arkadi empty handed.
In September 2008, when his creditors were wrangling over the remains of Ocif, Arkadi Gaydamak had listed Portsmouth FC in a court submission as one of his assets claiming it was worth £300m. It was the Gaydamak family’s last known tangible asset. It was deep in trouble, for sale very cheaply and he had just told his creditors that it belonged to him. It was a tempting prize, with tens of millions of TV money due to come into the club and a forthcoming transfer window in which quick cash might be realised.
Just five months after the abortive Moscow trip by Azougy and Narkis, Chainrai, Kushnir, Mana, Yossifoff and Azougy were involved in an attempt to take over Pompey using the unfortunate Ali al Faraj as a smokescreen.
Balram Chainrai admitted to being a close friend of Yoram Yossifoff and transferring £2.5m, 50% of the proposed purchase fee, to Yossifoff in London in July 2009. Although Chainrai claims this was just a loan, his and Levi Kushnir’s names were passed to the Premier League as prospective owners by directors of Portsmouth FC. However, Sacha discovered the involvement of his father’s creditors, as Peter Storrie later lamented in public, and decided to sell to Sulaiman Al Fahim instead – for £5m and a promise to pay £9m in January 2010 and a further £20m by 2011.
Sacha’s suspicions had been raised when the ‘billionaire’ Arabs Ahmed and Ali al Faraj were able to produce proof of funds of less than £750k, and the answers to questions about what their business interests and ‘connections to royalty’ were turned out to be ‘negligible’ and ‘none’ respectively. Clearly, Ali and Ahmed weren’t football takeover material.
However, Ahmed knew Yossifoff from their minor property letting businesses in London, and for the purposes of being the untraceable, uncheckable, unreachable straw-man figurehead, his brother Ali was perfect. A hermit in a country which refuses to allow Israelis in, or even those with an Israeli stamp in their passport. No wonder none of them ever met him.
As all Pompey fans remember, al Fahim’s disastrous regime lasted just 40 days before the club ran out of money and was forced into the hands of the five creditors, still hiding behind the “billionaire brothers” Ali and Ahmed al Faraj.
Azougy, Mana and Yossifoff had placed their interest in a company called Falcondrone, while Chainrai and Kushnir, according to sources, formed Portpin Ltd through their solicitor Mark Jacob.
Jacob was an old friend of Yossifoff, having worked in a London law firm of his as far back as 1998.
On October 6th 2009, Chainrai and Kushnir loaned Pompey £6m, and according to the evidence given in the High Court in August 2010, were to be repaid £7m in two months, an interest rate that is in excess of 130% APR.
In return they took a fixed charge over the club’s major asset, Fratton Park and proxy control over the 90% shareholding in Pompey held by Falcondrone. There was already an unpublicised winding up order in place from HMRC which stemmed from a failure to pay any tax for the last two months, in breach of an instalment plan offered by al Fahim.
A winding up petition automatically freezes the company bank account, so all the initial transactions went via Portpin’s client account at Fuglers. Normal practice is for a company to seek a validation order at the High Court to unfreeze the account and allow the company to trade if it can, with the consent of the petitioner, in this case HMRC. That gives the petitioner the right to see all transactions in and out of the account. Normally, the account balance is monitored by the Premier League to ensure football debts can be paid. So using the client account had the effect of limiting scrutiny by HMRC and the Premier League. In this case, HMRC agreed a new instalment plan and withdrew their winding up order.
Although the club now had access to its own account once again, the regime continued to do business via the Portpin client account. Mark Jacob had been added to the board on October 5th and Daniel Azougy was given complete control of the finances at what seems to have been the first and last board meeting of the al Faraj era – with Ali al Faraj not present.
Peter Storrie was informed by the regime that he was to deal only with the football side of the business and Tanya Robins was informed, apparently much to her disgust, that she now effectively reported to Azougy.
However, Azougy could obviously not access the Fuglers client account. Only one man could order the accounts team at Fuglers London HQ to transfer money and that was Mark Jacob. And although he had the title of Executive Director of Portsmouth FC, Portsmouth FC were not paying him. Nor were Falcondrone. Only Portpin Ltd paid Jacob, via their fees to Fuglers.
This arrangement meant that Portpin had control over the shares, fixed asset, bank account and executive director of the business. In August 2010, during HMRC challenge to the CVA, Gregory Mitchell QC argued that this amounted to control of Portsmouth FC as shadow directors. The term ‘shadow director’ is defined in the Companies Act 2006 as a person ‘in accordance with whose directions or instructions the directors of the company are accustomed to act’.
So did Portpin ever tell Jacob what to do, and, if so, did he do it?
Well, as was revealed in the HMRC challenge, Portpin wrote to Jacob in December 2009 and demanded a solicitors’ undertaking that he send the next Premier League TV payment, which the Premier League were insisting went to football creditors, to them instead. He agreed. However, the Premier League contacted Jacob and, when he revealed the undertaking to them, they directed the money straight to football creditors. The Premier League also placed a transfer embargo on Pompey.
On December 23rd 2009, HMRC once again issued a winding up order to Portsmouth FC. The club had immediately failed to fulfil any part of their new instalment plan, with the tax and national insurance on wages not being paid in October, November and December, let alone arrears of tax, VAT etc. This had the effect of once again freezing the club’s bank account. Money can be paid into a frozen bank account, and indeed this is where the club’s ticket revenues and merchandise sales continued to go. However, it couldn’t be accessed by the club. Had a validation order been sought, the approximately £2m in the club’s account could have been paid to creditors, and repaid the small creditors and charities many times over. However, it sat there, unused.
The reality is that while visibly the Premier League appeared to be doing nothing, behind the scenes they were playing a blinder. Their refusal to allow TV money or transfer revenue into the club meant there was no quick way for the five creditors to get the money they were owed by Arkadi back. This is the main reason no players were sold until the end of January, because at any other time the revenue would have gone straight to creditors.
In early January 2010, when they realised it was going to be near impossible to recoup any money they had put into Pompey from the TV rights payments or transfers that had brought them here, Portpin asked Jacob to supplement their fixed charge with a floating charge over all the assets, enterprise and monies of Portsmouth FC. This was retrospective, as any money from Portpin had already been and gone. Therefore, this charge is invalid. The reason can be found in the maxim; “past consideration (for a debenture) is no consideration”.
To obtain a valid security you need to provide a new consideration (ie you need to lend new money). However, Jacob issued the charge retrospectively, giving them absolute control over everything of value at Pompey. (Jacob’s actions were above board here, he issued the charge, but it’s not up to him to determine its validity). So when Portpin put Pompey into administration in February 2010, there was a valid fixed charge, but the floating charge was never valid, and has never subsequently been tested in court. The fixed charge should have been released when Pompey came out if administration, as Portpin were given the asset on which it was secured.
However, the rest of their secured debt is a myth, and the January 2011 transfer of the whole £17m charge was plainly invalid and should never have occurred without £17m of new money being loaned to Pompey at the same time.
On February 2nd 2010, following the sale of Younes Kaboul and Asmir Begovic to Spurs and Stoke, Pompey were finally up to date on their currently owed instalments to Football creditors. Football rights (TV) payments and incoming transfer revenue channeled directly from the Premier League to football creditors had wiped out the arrears.
This meant that although the club had run up crippling debts during the period to non-football creditors, the club could finally receive the transfer money and the Premier League, bound by their own rule book, could do nothing about it. Portpin saw their chance and requested the money be sent to them by Jacob from the client account and £2m was wired, apparently to Switzerland.
Falcondrone, Azougy, Yossifoff and Mana were furious. Some of whatever sums of money had come into the club also belonged to Falcondrone. From their perspective, Portpin were no longer partners, but rivals for whatever could be salvaged from the wreck of Pompey.
The same day, Azougy sent a forged letter  claiming to be from Ali al Faraj demanding that Jacob in future only repay money to Portpin with the permission of Azougy. So did Jacob comply with this instruction from the nominal beneficial owner of Portsmouth FC? Of course not. He was a solicitor and his clients told him to transfer more money, so he did. A few days later, a further £2m was transferred to Portpin.
Section 127 of the Insolvency Act says that: ‘In a winding-up by the court, any disposition of the company’s property, and any transfer of shares, or alteration in the status of the company’s members, made after the commencement of the winding-up is, unless the court otherwise orders, void’.
As the £4m was transferred to Portpin after the commencement of the winding up order it is highly likely to be unlawful. Baker Tilly are investigating transactions of PCFC Ltd and we await their report with interest. Certainly Andrew Andronikou confirmed publicly to the Pompey Virtual Alliance in 2010 that the transfer would probably have to be reversed as it appeared to fall foul of section 127.
One interesting feature of this controversial money transfer is the situation of Mr Jacob. As a solicitor, he had to be careful which legal persona he adopted, either acting as Portpin’s solicitor or Portsmouth FC executive director. Jacob is no schmuck. He knew that if he transferred the money as Executive Director of Pompey, he was likely to be called to account later. But no one can hold him accountable if he transferred the money as Portpin’s solicitor, acting purely for Portpin. This would mean that Jacob’s higher loyalty to his client took precedence. But he could only transfer the money if a director or appropriate authority acting on behalf of the football club told him to. And an appropriate authority did: the people who really ran the club – Portpin. So it looks like Jacob is rightly free and clear.
So what we have here is a company in Portpin that controlled all the shares, assets, money, bank account and Executive Director of Portsmouth FC. They repeatedly told him what to do and he did it, even when ordered not to by the ‘owner’ of Portsmouth FC, even when insolvency law seems to prohibit it.
Multiple sources have confirmed that in fact the operation of the bank account leaves little room for ambiguity. In accordance with the Solicitors Regulatory authority rules on the operation of client accounts, Jacob needed authorisation to transfer funds out of the account, from Portpin. What greater level of control could anyone have over a business than the shares, assets, director and payments? Ali al Faraj, controlled NOTHING.
In order for a creditor to be selected for payment during this period, department heads submitted lists of who needed to be paid to Tanya Robins. She was then required to hand this list to Daniel Azougy, who would forward it to Jacob and the directors of Falcondrone and Portpin. The list would come back from the shadow directors representing Portpin and Falcondrone to Jacob with asterisks next to those who should be paid. No asterisk, no payment. This lead to the club’s website being shut down for non-payment in December 2009, as all the lobbying from the department heads and even nominal CEO Peter Storrie, to have the very small bill paid had fallen on deaf ears. Jacob reportedly said: “I can’t authorise it”. Storrie apparently paid the bill from his corporate credit card.
In early February 2010 Jacob and Fuglers were ‘uninstructed’ by Portpin following the discovery of £1.5m in unauthorised payments to individuals who are still unknown. Portpin removed their business to Balsara and Co and Jacob left Fuglers shortly afterwards.
Once again, this is a clear demonstration of control by Portpin over the business. When payments were made from Portpin’s client account that they had NOT authorised, action immediately followed.
Sources close to the situation at the time claimed that Jacob was entirely blameless in this and that Azougy, a convicted forger, had created a fax which fooled the accounts team at Fuglers to send payments to a number of still undisclosed bank accounts.
Pompey were fined £1m by the Premier League following rule breaches concerning Daniel Azougy during this period. He was revealed as a fraudster and forger in a national newspaper during December 2009, and Jacob was forced to defend the situation in another national newspaper interview shortly afterwards.
Azougy was present in the directors box with representatives of Portpin and Falcondrone including Chainrai, Kushnir, Mana and Yossifoff on numerous occasions during this period and all were seen to arrive together and leave together by numerous sources. Azougy was also responsible for creating fake accounts, which were released to prospective buyers during December 2009 and leaked to The News. These accounts created £40m on Pompey’s balance sheet and removed large tranches of debt. They showed a ‘Premier League receivable facility £22m’ on the balance sheet, to be paid in January and represented as an agreed advance payment of Premier League TV revenues. In fact, no such advance had ever even been asked for and the Premier League told interested journalists in no uncertain terms that they weren’t trusting Pompey with any money, let alone advancing them any.
It was the creation and distribution of these faked accounts that apparently lead to Tanya Robins resigning from the board of Portsmouth FC, although she had always been very uncomfortable working with Azougy, who was harsh, abrasive and nakedly corrupt. An eye witness reported a stand up row between Robins and Azougy where Robins told the fraudster he could not do things like that here, and Azougy responded “that’s the way we do things where I come from”, which probably explains his multiple convictions.
On another occasion, an eye witness also reported that Jacob had to be summoned from his London office, where he was desperately trying to keep his legal property practice going, to Fratton Park to avoid Peter Storrie and Daniel Azougy resorting to a fist fight. Storrie was furious at the way Azougy was controlling the finances and the inability of any director to get a clear picture of the accounts. Jacob might have been processing payments and known what was in the bank account, but the real picture of what was due to be paid or received was kept from him.
In fact, whilst history will have much to say about the running of Pompey before October 2009, the picture that emerges from numerous conversations with those closely involved is that Peter Storrie, Tanya Robins, Mark Jacob, Paul Weld and Lucius Peart did their absolute level best to try and ensure the club was run the right way. But they weren’t running the club. They had no real say at all.
On 10th March 2010, the Pompey Virtual Alliance and other supporters groups met with Administrators from UHY Hacker Young. Hacker Young said that the amount of debt the club owed was, as yet, impossible to determine because “there was a black hole in the accounts”. Administrators demanded this be excised from the minutes or there would be no further meetings, and after much debate it was removed. UHY ended the meetings subsequently in any case. However, it’s important that fans know that there are serious question marks over all the financial transactions at Pompey between October 6th, 2009and March 2010, and that this is almost certainly why the Baker Tilly investigation is taking so long.
Despite their history of related business transactions, their close friendships with other members of the group, their close proximity at matches, national newspaper articles and the presence of their own solicitor in the same building, staying in the same hotel and being forced to work closely with Azougy, it remains Portpin’s claim that they had no idea what he was doing or what his role was. Their contention that they had sleepless nights worrying about how they would get their money back in 2009 and not knowing who ran the finances just leads to the obvious question: why didn’t you ask your solicitor who ran the finances? Why didn’t you ask your friend Yossifoff? Why didn’t you ask Azougy when you were sat next to him? Are you really saying that his role and status as a fraudster was confirmed in two national newspapers in December 2009 but your solicitor didn’t inform you of it?
Pompey-fans.com has asked Portpin to comment on the entirety of this article but Portpin “decline to comment”.
Ali al Faraj never did have anything to do with Pompey. The people who ran Pompey during this period were Balram Chainrai, Levi Kushnir, Yoram Yossifoff and Daniel Azougy, with Ron Mana more distantly interested. None of them joined the board, but all acted as shadow directors.
The Premier League have always been adamant that anyone who acted as a Shadow Director during Azougy’s tenure at Fratton Park would not be a fit and proper person. At every stage, Portpin’s man on the board obeyed their instructions on key financial matters. There is no room for doubt that they were shadow directors.
Ali al Faraj has as much to do with Pompey now as he did in 2009-10. The reality was that lurking underneath the Arab khefiyeh of Ali al Faraj were Balram Chainrai and Levi Kushnir; creditors of Arkadi Gaydamak, who came looking for his assets and have since refused to leave.
So who did? Our story begins in 2007 when Arkadi Gaydamak (father of Sacha Gaydamak) purchased a property company, Ameris Holdings, from Balram Chainrai and Levi Kushnir in a deal brokered by Ron Mana and Yoram Yossifoff.
By 2008, Arkadi Gaydamak was under pressure with the French courts investigating his involvement in the Angolan civil war and a crash in Israel’s property market. The Israeli property market was under assault from two directions: the crash in asset value and the man who had loaned money to several Israeli property CEOs – Shelley Narkis, the King of the Grey Market and Israel’s biggest loan shark. Narkis is a convicted extortionist, jury tamperer and is feared throughout Israel. One of his non-motorbike riding, machine gun-toting employees is our old friend Daniel Azougy, debt collector extraordinaire.
In the financial whirlwind which followed, various CEOs fled Israel. Boaz Yona of Heftsiba to a hideout in Italy and Arkadi Gaydamak, who owned Ocif investments, to Moscow.
The domino effect destroyed Heftsiba and OCIF investments, and left Gaydamak unable to finish paying for Ameris Holdings. Arkadi’s many many creditors from his Israeli businesses included Ron Mana, Yoram Yossifoff, Daniel Azougy and Balram Chainrai and Levi Kushnir. Azougy was a long time friend of Mana and Yossifoff.
Mana, Chainrai and Kushnir were awarded a lien on the assets of Betar Jerusalem, but Israeli insolvency law being very different to UK law, they had trouble extracting any money. In January 2009, Daniel Azougy attempted to convince the Betar general manager to transfer all the club’s money out of the club claiming to be working for Gaydamak. A swift phone call to Moscow later, and this attempt to extort money from Betar was quickly and very publicly rebuffed. Azougy got a flea in his ear and no money.
The following month, Azougy and Narkis, visited Arkadi Gaydamak in Moscow to try and get their money back.
As with Azougy’s visit to Betar, he came back from Arkadi empty handed.
In September 2008, when his creditors were wrangling over the remains of Ocif, Arkadi Gaydamak had listed Portsmouth FC in a court submission as one of his assets claiming it was worth £300m. It was the Gaydamak family’s last known tangible asset. It was deep in trouble, for sale very cheaply and he had just told his creditors that it belonged to him. It was a tempting prize, with tens of millions of TV money due to come into the club and a forthcoming transfer window in which quick cash might be realised.
Just five months after the abortive Moscow trip by Azougy and Narkis, Chainrai, Kushnir, Mana, Yossifoff and Azougy were involved in an attempt to take over Pompey using the unfortunate Ali al Faraj as a smokescreen.
Balram Chainrai admitted to being a close friend of Yoram Yossifoff and transferring £2.5m, 50% of the proposed purchase fee, to Yossifoff in London in July 2009. Although Chainrai claims this was just a loan, his and Levi Kushnir’s names were passed to the Premier League as prospective owners by directors of Portsmouth FC. However, Sacha discovered the involvement of his father’s creditors, as Peter Storrie later lamented in public, and decided to sell to Sulaiman Al Fahim instead – for £5m and a promise to pay £9m in January 2010 and a further £20m by 2011.

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