When the five creditors of Arkadi Gaydamak, that is to say Ron Mana, Yoram Yossifoff, Balram Chainrai, Levi Kushnir and Daniel Azougy, arrived at Pompey they were quite simply looking for a way to get their money back. They created a delicate power sharing agreement between the alleged shadow directors to ensure that parity was maintained. This was an alliance of partners, not a marriage. They were all owed by the same man - Arkadi - but that didn't mean they trusted each other.
Azougy would be in charge of the finances, and would try to make sure everyone got their money out. None of the actual owners would join the board because otherwise they would be directly linked to Azougy's actions. Instead, the board would be full of people who were denied any control, Peter Storrie and Tanya Robins for example, and someone over whom they had total control and both groups had faith in - Mark Jacob. Jacob was Portpin's solicitor and directly controlled by them, but had also known and been in business with Yossifoff for years.
So Jacob and Azougy were the twin operational pillars of Pompey, representing Portpin and Falcondrone respectively.
The five had apparently lined up a refinancing deal in August, a bank (a small private Swiss bank, that I'm sure have no wish to appear in this article) that had sent a letter of intent to provide a £35m overdraft facility.
Once the immediate HMRC bill and player wages were settled, the club would, to the outside world, look like it was on a solid footing. That way, all the TV rights payments and transfer fees in January could be harvested while the club lived off the overdraft. All payments would be renegotiated to be due in February or March, and either left for a new owner or an administrator to sort out. Then it could be sold on to an incoming schmuck or placed into administration, and all the assets retained whilst the debt of others would disappear. Ron Mana and Yoram Yossifoff had already performed a similar manoeuvre at Maccabi Tel Aviv, selling after six months.
Ali Al Faraj, or more accurately his brother Ahmed, inadvertently spilled the beans when he spoke to Saudi newspaper Asharq Al-Awsat in October 2009. "Our plan is to stay for a period of not less than six months, until the club stands again," Ahmed said. "This is based on the fact that purchasing the club was purely an investment ... It's not a secret to hide: we are investors and we have no relation to sports." He helpfully added he and his brother were no "billionaires" after all. In a chaotic panic, which was to become the norm as events unfolded, the 'Al Faraj' regime first denied speaking to the newspaper, threatening to sue over the "completely false" quotes, then quickly retracted. It was a patent, if somewhat inconvenient, truth published in a respectable journal after all. Pompey-fans.com contacted Ahmed Al Faraj to comment on his involvement with Portsmouth FC, but he said he was too busy to deal with the matter this week.
Obviously the Swiss bank would not provide such a facility to a company that had a winding up petition in place, so when the five creditors got into Pompey, the discovery that there was an unpublished (ie not advertised in the London Gazette), winding up petition from HMRC this put an almighty spanner in the works. The first loan of £6m was intended to provide the difference between what the club had in its bank account and the wage bill, approximately £750,000, and pay off the arrears to HMRC and discharge the petition.
Once this was done, the bank could provide their overdraft facility and they could recover their 'bridging facility'. Then the plan started to go seriously awry. The bank had five partners who were required to sign off such a substantial loan. In August they had appeared willing to do this. In the interim though, one of the partners had sent someone off to research Azougy. They didn't like what they found, and, in mid-October, the deal was off.
At the end of October there were major question marks over who would pay the wage bill. Eventually Portpin advanced another loan to pay the wages, which without tax were around £2.2m. The same farce was played out in November - when the payment of salaries was delayed until early December - and the friction between Portpin and Falcondrone was leading to a leadership vacuum of mammoth proportions. One source said: "It was chaos. No-one was in charge because everyone was in charge. You had people running round trying to get directors to sign a letter dismissing Storrie, others countermanding it, people trying to ban Jacob and Azougy from the premises after they played a prank on another member of the consortium, just utter chaos. Of course, Jacob and Azougy took no notice". Apparently the prank was making a phone call to a member of the executive team pretending to be Ali Al Faraj and demanding the sacking of a number of individuals.
Of course, the executive guessed it was a prank because the last person who would be calling Pompey was Ali Al Faraj.
Testament to the chaos engulfing the club and Portpin's power as the final arbiter over significant financial decisions was Azougy's inability to get his contract signed in November 2009. Mark Jacob was asked to draw up the contract, and it bears his reference beginning MSJ, for Mark Silas Jacob [click here to see the front page]. The contract was worth £76,000 per month and ran for three years [click here to see the relevant clause], meaning Azougy stood to make £2,736,000 it it was ever completed. Of course, Azougy wasn't going to be around for three years at Pompey. He was expecting to get the six months severance pay detailed in the contract on top of three or four months' payment. All in all, probably £760,000 tax free for four months' work - nice work if you can get it.
Azougy was demanding various directors sign his contract, but two signatures were required and none of the directors would - because, quite simply, Jacob had been told not to by Portpin, as they were growing ever more exasperated with Azougy and Falcondrone. Mana, Yossifoff and Azougy had managed to scrape together far less of the money initially required to discharge the winding up petition and pay the wages than Portpin. As each month went on, the situation became worse with Portpin being asked to put more money in and Falcondrone failing to do so. Any payment for Azougy would have come from Portpin, and they were already frustrated enough. They had come here with Falcondrone as partners in an asset/debt recovery operation, but that alliance was beginning to fracture.
As autumn wore on it became more and more obvious that no refinancing was achievable, and Daniel Azougy was proving to be a liability. In Israel, with the cachet offered by his underworld connections and political and legal connections via Mana and Yossifoff, he was a dangerous man to defy. In England, frankly no-one cared about his two-bit hard man act.
In October he rang Chelsea and tried to tell them that the payment Pompey owed for Glen Johnson and which was due now would be paid in February. Chelsea immediately complained to the Premier League and asked if Azougy were allowed to speak on behalf of Pompey. The Premier League placed a transfer embargo on Pompey and demanded assurances over Azougy's role. This also had the effect of giving the Premier League the right under their rule book to divert TV rights payments and incoming transfer fees to football creditors.
Azougy also tried to dictate to HMRC what they would expect and when they would expect it. He was sent packing. In Israel, Yossifoff had several times had the country's tax code changed retrospectively for his clients. In England, Yossifoff's feeble attempt to try and claim that there was no £7m VAT bill because the buying club should pay it didn't go down well with either HMRC or the High Court in January.
In addition, the nominal Chairman of the club Sulaiman Al Fahim, retained in the role as part of the deal which saw him sell 90% of his shareholding to 'Ali Al Faraj' in October, was already privately warning in early December that the club, in the absence of any refinancing, was likely to be put into administration by February 2010.
But first it was a question of looking at the TV payments and transfers. Both Falcondrone and Portpin had their eyes on a sizeable payment in December and a further one due in January. As revealed previously, Portpin wrote to Jacob and demanded he give a solicitors' undertaking to give the money to them. Meanwhile, the Premier League wrote to Jacob shortly afterwards under their new powers to withhold and redirect parachute payments to receive an assurance that the payment would go to football creditors. Jacob couldn't give such an assurance and the Premier League redirected the payment.
The palpable lack of unity at the club lead to a series of disputes between Portpin and Falcondrone. Both sides were manoeuvring for an 'each man for himself' outcome. On December 23rd 2009 a new winding up petition landed on the club's doormat from HMRC. The structure of Pompey at the time, as stated above, was that Falcondrone had a governance structure of two groups. One was Azougy and Jacob. The other was Ahmed Al Faraj and Yoram Yossifoff. A copy of another crudely forged Ali Al Faraj letter sets this out [click here to read it]. It is interesting to note each of the forgeries spells al Faraj's surname differently [click here to see the second letter]. However, while this was all well and good, in fact Portpin held all the levers, and now they began to pull them.
On Christmas Eve Pompey attempted to negotiate with the Premier League a special exception to open the transfer window early to allow the sales of Younes Kaboul, Aruna Dindane, Nadir Belhadj and David James. It was at this meeting that Azougy was ejected by the Premier League, after his fraud and forgery convictions were very inconveniently revealed by a national newspaper.
Jacob's refusal to play ball with Falcondrone led to a letter of 26th December in which Azougy tried to order Jacob to come back into line. However, Jacob seems to have revealed his agreement to create a floating charge over all the remaining assets at this time in favour of Portpin, although it was early January before the charge was filed with the courts owing to the Christmas holidays.
It all proved immaterial anyway. The Premier League refused to agree to any early sales and revealed that they would be paying any domestic transfer fees direct to football creditors. As January hoved into view so Sacha's debt appeared over the horizon. Yossifoff, who had repeatedly denied being involved in Pompey, now happily answered the phone to any journalist to promise a rock solid legal strategy to avoid paying Gaydamak a penny.
For instance Yossifoff, 'advisor' to owner Ali Al Faraj, told The Sun at the time: “Ali bought 90 per cent of the shares in Portsmouth from Sulaiman Al Fahim not Gaydamak. That £28m is not a Portsmouth debt.”
So as a puzzled world watched and waited for the fire sale to begin at bankrupt Pompey, the SOS Pompey demonstrations swelled outside. Jacob found himself staring into the eyes of people who wanted his guts for garters on behalf of a regime that was steadily ruining a football club; not at all what he had signed up for as anyone who has read his book or sat next to him in the directors' box while he kicked every ball will testify. Jacob had attended all academy matches, shivering through the winter on the touchlines. He personally intervened according to eye witnesses to insist Paul Hardyman was retained.
Meanwhile, Azougy was telling one member of the executive team that he needed to fire a list of the club's high earners without pay or notice. Again, the situation deteriorated to the point where the executive and Azougy were nose to nose. Heroically, the member of the executive team told Azougy if he wanted to fire people he could do it himself - which of course Azougy could not legally do.
In January 2010 another of Azougy's stunts was uncovered. He had promised some kind of merchandise contract to Lotto of Italy. Unaware that Azougy was not an authorised signatory, they are thought to have advanced him a sum of in excess of half a million pounds.
A source close to the regime had previously claimed that Azougy was only ever paid once in connection with his role at Portsmouth and once it was discovered, Jacob forced him to repay the money. It is believed that this is the payment from Lotto and that this explains the subsequent lack of any claim in administration from them.
Again, the contrast between what Jacob had the delegated power to do as holder of the proxy over the shares on behalf of Portpin, and Azougy's impotence. Azougy and Jacob were supposed to be jointly running the club on behalf of Falcondrone and Portpin. In reality, only one side had the ultimate power to direct.
In November 2009 Pompey played Manchester United and the five creditors were all in attendance with their families. It was a convivial atmosphere with the group staying close together. By January 23rd, as Pompey met Sunderland in the fourth round of the FA Cup, the atmosphere between the two groups [click here to see who was present] was described by an eye witness as "poisonous".
At the end of January the regime was stumbling towards its end. The world was bewildered at the lack of players sales at a club which was obviously bankrupt. However, as previously explained, there was no point in selling players when their fees would go straight to football creditors. As soon as the second football rights payment and incoming transfer fees cleared the club's football, creditor slate and brought Pompey up to date, Azougy sprang into action.
If you ever wondered why the ludicrous Asmir Begovic deal was done, whereby we ended up paying Spurs £1m for NOT signing our player, this is the answer. Azougy was so desperate to shift anyone that he would accept any offer if it generated cash up front, as Stoke were willing to do. This meant he agreed to a daft deal to cancel a proposed move to White Hart Lane at a price, which came back to bite us subsequently. How did he get the deals signed off? Jacob refused to sign the deals because he felt they were terrible business for Pompey, which didn't endear him to Portpin or Falcondrone.
In the end, one director stepped forward to sign them off. They did so because the only other authorised signatory had made it well-known they would not. The signatory was relatively close to retirement and so another Pompey director stepped up to the plate and signed the deal off. Only with his signature would the Premier League allow the transfers to go through, and the director did it purely to avoid a great club servant being put in an impossible position on the eve of their retirement.
Of course, as soon as the money came into the club Portpin took the first slice of £2m. As explained previously, Azougy then sent a forged letter from Ali al Faraj demanding that this not happen again. However, Jacob had no choice but to obey Portpin and sent the next installment of £2m a few days later.
Following the decision by Portpin to seize the club in early February 2010, Azougy made himself scarce to the naked eye. However, when Pompey found themselves in the High Court in March, Azougy marched in, as bold as brass, through the front door surrounded by a media scrum and smiling like it was Christmas. In fact, today his Facebook profile picture is still this photograph. Why was he there?
He was there because Falcondrone still wanted to see what could be salvaged from the wreckage of Pompey. And whilst there were clear limits on what Azougy could do while theoretically running Pompey, no one in England can tell him what to do. So Portpin and Pompey's legal team had to stand there and grin and bear it while Azougy lectured them on their legal strategy in a corridor of the High Court. Eventually, a crowd of journalists surrounded Azougy demanding answers to questions and he was forced to flee.
Even if repayment was harder to come by for Falcondrone and Portpin, the record books will show that Sacha Gaydamak lost more than anyone from the collapse of Portsmouth. Falcondrone, for it is almost certain theirs was Azougy's 'unauthorised' money grab of £1.5m, probably came out about even.
Portpin, however, came out holding all the cards. They controlled all the assets and money of Pompey. They took the last £4m cash. They put the club into administration and kept all their secured debt. That's what happens when you make sure you hold all the real levers of power and pull them at the right moment...
Footnote and a statement by Portpin
The stories I have published over the last two days are the full, inside story of the Ali Al Faraj/Falcondrone/Portpin bid for Pompey, and of their ownership of Pompey. Whilst many of the central issues and allegations have been reported before, this is the first time the full story has been told.
I have been researching this for three years, and my articles are the results of interviews with multiple sources both inside and outside the UK. I have numerous eye witness accounts of life inside the Falcondrone/Portpin regime – and these accounts come from senior people who want the full story to come out.
Portpin’s retained PR company has been given ample opportunity to comment on the central allegations, and on the two articles in their entirety. They have also seen more than 100 questions which I believe Portpin need to answer.
Now, more than a week since the first questions were put to them, they have decided to comment on their ‘no comments’ after all. On Tuesday Portpin's PR company said: “Our decision not to comment on Mr Hall’s blogs to date should in no way be taken as an acknowledgement of these unfounded, unsubstantiated and defamatory allegations."
The opportunity for Portpin to answer the questions and publicly respond to the allegations I have outlined remains there. I will publish any answers to the questions or any further statement they wish to make in full. If what I am saying is not true, this matter can be resolved very quickly and easily with a full and frank explanation of how all my sources and eye witnesses are clearly mistaken.
I am happy to repeat the central allegation. That a group of Arkadi Gaydamak's creditors - Balram Chainrai, Levi Kushnir, Yoram Yossifoff, Ron Mana and came to Portsmouth Football Club intending to undertake short-term asset stripping as a form of debt recovery. They brought their debt-collector, the convicted forger Daniel Azougy, with them.
They found a Saudi Arabian hermit, Ali Al Faraj, to front the bid to hide their own presence. He was never seen or heard in Portsmouth, and hasn’t been seen or heard of since. Instead, a convicted fraudster and forger was running the finances of the club alongside their own solicitor who had overall control. Neither Falcondrone or Portpin had any experience of running a football club, and, once the Premier League got wise to their game and effectively stopped it by diverting payments coming in to Pompey, the game was up.
Portpin - after a long period of silence - now claim that these allegations are defamatory. I am sure I am not alone when I say I look forward to seeing Ali Al Faraj in the witness box.
Micah Hall
Click here to read how Portpin controlled PFC from October 2009...
Want to know more? Click here to read why PFC owe Portpin absolutely nothing...
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 and here to read questions 71-85.
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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