mark lawn

This exact same thing was tried when Mark Moore tried buying the Bradford Bulls with the Bulls own money

If I remember the RFL refused to sanction the takeover

https://www.thetelegraphandargus.co.uk/NEWS/11035919.War_of_words_breaks_out_as_deal_to_buy_Bradford_Bulls_collapses/

 

If he and the company secretary are receiving say £250,000 a year in salary + share dividends (tax efficient), plus the club is taking a loan and it is used to pay off his share of the purchase price, then any initial outlay will be recouped.

 

In the past City has provided accommodation for some of its players. There were reports that Carbone had a five bedroomed detached house in one of the wealthy Leeds suburbs, provided for him.https://widthofapost.com/2014/06/13/a-potted-history-of-bradford-city-5-benito-carbone/ Not sure if a similar ‘benefit’ has been arranged by the club for Rahic and his family. For example the club could take a mortgage out on a house, which a significant individual then rents it from the club at a peppercorn rent. There are many other examples of Grace and Favour style packages such as education for children and cars. So suddenly you do not need to spend a lot of your own money. A further example is that could fly to the continent ‘on business’ and the company could fund the tickets etc.

Lets be very clear I am not saying that this is actually happening in City’s case, but looking at ‘theoretical’ ways in which not very much is needed from an individuals own pocket, to fund a very comfortable lifestyle.

Some one may well have more knowledge about these possibilities.

 

The accounts don't specifically record 'large payments' unless they are significant and non-routine. As an example the transfer fees we paid for Wyke, McCarten etc are disclosed in the balance sheet.

The more important issue in the context of whether the owners have used the club in some undefined way to raise their finance is that significant transactions between the company and its owners have to be included as notes to the accounts. If for example Rupp had loaned the club a million or two, that would be recorded in the balance sheet (as any loan would be) and additionally as a note to the accounts because it involves one of the owners. And it works equally in reverse. In addition to these notes, anybody daft enough to loan money to the club would have registered what's known as a 'charge' at Companies House for the value of the loan. That's what ML did when he loaned the club his £1million and he took a charge on the assets of the club, future revenue streams and the sale and sell-on of players. it's just normal practice when owners are providing loans to their companies (although many owners choose to provide the loans interest free!). A look at Companies House shows no such charge on the club. Since the club is the only company in the ownership chain which has assets (and there aren't too many of them!), anybody with half a brain cell who is loaning the owners any money would have slapped a charge on the club. And there aren't any!

It is quite possible that either Rupp or Rahic or even both have taken out loans to finance their original investment but that would simply be a private matter between them and whoever provided the finance. Nobody other than the parties to these loans would ever know the arrangements if it were a private one. The important thing however is that if such personal loans really do exist, they have not been raised against the club's assets but against R&R's own private assets.

Which takes me on to my final point. Are the owners taking money out of the club to fund these mythical loans? There's a strong rumour that Herr und Frau Rahic are receiving salaries from the club. I suspect that is true since both are employed by the club and I'd expect nothing other than that. They have lives to run, family to support, a house to be paid for, pizzas to be bought etc. They can't live on fresh air.

But are R&R taking anything extra by way of say dividends? The simple answer is no to this particular question. If they were. this would be disclosed in the notes and there is no such disclosure. From a very practical and legal perspective, the finances of the club prevent any dividends being paid legally to the owners for the simple reason that the club still has accumulated losses of around £2million in its accounts. Only when the accumulated losses have been magically converted into a profit can a divi be paid and that won't be soon. That's the law of the land and owners who don't comply with that can find themselves in the nick, being disqualified as a director in the UK and potentially elsewhere in the EU and find themselves banned from being involved in football ownership.

That's a very risky approach indeed. But anybody who has any evidence that either Rpp or Rahic have acted illegally should in the first instance contact Companies House. If it's proved that they have have acted illegally, that really will get them out of the club!