Pompey-fans.com can now reveal the breathtaking extent of Portpin's and UHY Hacker Young's control over the decision to put Pompey into administration in February 2012.
In a startlingly frank interview Andrew Andronikou, the UHY Hacker Young administrator at Fratton Park in 2010 and current administrator of CSI, admitted to:
When Portpin forced CSI into insolvency, (appointing former Pompey administrator Andrew Andronikou as administrator), in November 2011 following the arrest of Vladimir Antonov, Andrew Andronikou was the focal point communication between Portpin and Pompey. Certainly Balram Chainrai, in the interview he gave recently to Matt Slater of the BBC (then denied giving, before admitting it again), seems to believe this arrangement puts him at arm's length from Pompey. "They can't pin that on us, and the club directors [at that time] know it. We were totally distant," he said.
However, there are serious problems with this.
Portpin directed Pompey's affairs and took a calculated decision to allow the club to go into administration rather than support it financially, which had the effect of reducing everyone else's debt and maintaining their own, precisely what the rule was intended to prevent. How do I know this? It says so on Pompey's own website [click here to read a club statement]:
Credible sources suggest Deepak Chainrai, representing Portpin, also attended meetings between Portpin, UHY and Pompey directors, including David Lampitt and John Redgate, to map out the club's strategy on how to avoid administration.
At the meetings, funding was discussed to prevent Pompey slipping into administration. Chainrai and Andronikou made an offer to match any revenue achieved from player sales during the January transfer window. The directors were initially prepared to accept this but asked the offer be committed in writing to protect themselves from being accused of selling players at an undervalue.
An undervalue is a transaction entered into during what is known as a 'vulnerability period' before a company falls into bankruptcy. Legally, this period is reckoned at six months, and the player sales would have been literally a few days prior to the club falling into bankruptcy. An undervalue transaction can be unwound by the courts at the behest of the creditors, so had the directors agreed to the sales and the promised funding not arrived the club would still have gone into administration, and theoretically have been faced with the prospect of players who had been sold being ordered by a court to be returned to the club. It is thought that this outcome is extremely unlikely however, but a simple letter might have prevented such a breakdown in trust.
The letter promising funding from Portpin was apparently not forthcoming.
Responding to the suggestions, Andrew Andronikou spoke at length to pompey-fans.com.
Andronikou said that following Portpin's decision to push CSI into administration following the arrest of Vladimir Antonov, Portpin and UHY Hacker Young offered a deal to the directors of Pompey that if they "contributed to their future" by "tapping into their asset base which was effectively five or six players and reduce their running costs", Portpin would match them on a pound for pound basis and sustain the club going forward.
Andronikou, who claims to be "friends with chairmen up and down the Football League", began ringing round other clubs in an attempt to drum up interest in Pompey's players. "I had to do that because Mr Lampitt didn't want to know, he was working on another agenda". It took "six weeks of ringing around to do it".
"We identified a number of player sales we believed we could complete, with the assistance of the board in the January window," he added.
From November 2011 UHY were advising the club, after being appointed by Pompey Finance Director John Redgate, and they have submitted a bill to PKF for £138,000. "We were running the club, we were running the club" said Andronikou, before correcting himself to say "We were caring for the club in various guises for two months before PKF turned up in court."
"We believed we could realise £2m from player sales, and with that £2m from Portpin the club could avoid relegation and stay in the Championship. Now the truth of this sorry saga, is that, and I have to point the finger at David Lampitt. Mr Lampitt had decided he knew what was best for the club. He had aligned himself with the Supporters Trust and local council, he had decided that Portpin were going to be the villains of the piece and that it was in the interests of the football club to go into administration and liquidation and start again," said Andronikou.
He went on to give his version of events on transfer deadline day: "Unfortunately our esteemed Chief Executive at the time [Lampitt], because I needed him to sign off transfers at the time, went missing on transfer deadline [meaning] we didn't achieve any sales at all. He switched his phone off and disappeared. The only one we managed to push through, which was completely insignificant, was the young lad Ryan Williams to Fulham, and that was done at 11pm because basically I had got hold of Mr Lampitt and threatened him."
He went on to describe how he dealt with Lampitt: "The next day we, I mean me and the board, I representing the major shareholder, sacked Mr Lampitt. Because he had obstructed those sales, he had delivered the final nail in the coffin of Portsmouth Football Club'"
Andronikou's words provide incontrovertible evidence that Portpin and Hacker Young were controlling the club from the moment that CSI went into administration. Portpin and Andronikou created a plan to avoid administration. When David Lampitt "decided he knew what was best for the club", (and he was just the CEO, what right did he have to have a different plan?), Andronikou rang around the Football League to execute the plan himself. When Lampitt obstructed the plan, he was summarily dismissed. Portpin had £2m to continue to fund the club, but elected not to do so because the club had not "contributed to its own future".
Following Lampitt's dismissal, Andronikou and Portpin dealt instead with John Redgate, the Finance Director. Redgate is a lifelong Pompey fan and regarded as a man of great integrity.
Andronikou knew Redgate from having acted as administrator on five companies of which Redgate was a director between 2002 and 2006, (although Andronikou insisted this was really two insolvencies involving a group of companies). Andronikou even took Redgate into the directors' box on two or three occasions while his friend Milan Mandaric was running Pompey. Redgate was hired during Pompey's 2010 period in administration by Hacker Young, and was made Finance Director as Portpin took over the club in recognition of his "fantastic" work during administration.
There is no suggestion or implication of any wrongdoing or any untoward behaviour on behalf of John Redgate, UHY Hacker Young of Portpin. There is nothing wrong with doing business with people you know, like and respect. However, the Football League test is not a test of wrongdoing in respect of the 'two administrations' clause, it is a test of control. Clearly Portpin and Hacker Young took control of Pompey the moment CSI went into administration and created a plan for the club. When that plan was obstructed by Lampitt, he was fired and Redgate became the (probably unwilling and unfortunate) man in the Fratton Park hot seat.
The Football League rules describe a shadow director as:
When a business applies to go into administration, a 'statement of affairs' must be produced setting out the financial position.
Redgate set out to produce a statement of affairs for Pompey which you can view here. It is very interesting. It was written in biro pen for a start, which is seemingly somewhat unorthodox but, then again, I've never written one. However, even more interesting is the value of Fratton Park.
The book value of the freehold property of Fratton Park down as £13.2m. What 'book' provided this 'value' is not clear, with rumours suggesting it was written by Hans Christian Anderson yet to be confirmed. This was simply the amount someone, (not Redgate apparently), had reckoned Fratton Park was worth as an asset on the books, either rebuild value or economic value.
The realisable value, that is to say the amount Redgate thought Fratton Park would fetch, was £10m, which is still four times any known, independent valuation. However, written above this 'valuation', is a figure which has been crossed out but is still clearly discernible as £7.5m. If the Trust are successful in taking over Pompey, sources close to both bids and the football authorities believe that the valuation of Fratton Park will end up in the courts and such valuations may become a key issue.
The two insolvencies rule is not about the way companies were run, or designed to imply any form of criminality or immorality. They were introduced to stop owners writing off the debts of others while keeping their secured debts and the assets. You can do this once, but if you do it twice you fail the owners and directors test.
We have elected not to publish some of Mr Andronikou's interview as some of the material is potentially unfounded, unsubstantiated and defamatory to third parties and cannot be proven by us. However, none of the omitted material is relevant to the question of Portpin's role in placing Pompey into administration for a second time.The entire transcipt of the conversation will be made available to the Football League.
We have attempted to contact John Redgate by telephone and email on several occasions but he has not returned our calls, so we have not been able to ask him about the issues raised in this article.
A statement from Portpin claims they are still on course to acquire the club: "Our discussions with the Football League have been positive and are progressing. As far as we are aware we have satisfied the majority of the criteria and we expect now to work through the last remaining points with the Football League in the coming days. We are very confident that we are in a position to complete the acquisition of Portsmouth Football club in the near future," said a spokesman for the company.
Despite having been given ample opportunity to respond, Portpin's retained PR agency contend a number of unspecified allegations in Micah Hall's articles are 'unfounded, unsubstantiated and defamatory'. Portpin continue to have the full right of reply to enable them to explain how and why the sources of the articles are mistaken. UHY Hacker Young's PR department has also been contacted but they have refused to comment on a series of questions.
Want to know more? Click here to read why PFC owe Portpin absolutely nothing... Click here to read why Portpin controlled PFC from October 2009... Click here to read the inside story of the 'Ali Al Faraj' regime... Click here to see how 'Ali Al Faraj' tried to take the biscuit with Sacha...
Click here to read questions 1-13 sent to Portpin and their responses, here to read questions 14-23, here to read questions 24-33, here to read questions 34-44, here to read questions 45-54, here to read questions 55-70, here to read questions 71-85 and here to read questions 86-106.
The views of Micah Hall are his own and don't necessarily reflect the editorial view of pompey-fans.com. Any proceeds of this column are donated to Action Aid.
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The Pompey Supporters' Trust is still seeking pledges from Pompey fans to back their bid. Information can be found here
