http://football.guardian.co.uk/News_Story/0,,2072891,00.html
Tax probe after Leeds go into administration and are relegated Matt Scott Saturday May 5, 2007 The Guardian Leeds United and the offshore companies that own it will face an investigation by Revenue and Customs after the club filed for administration last night. The former Champions League semi-finalists have been relegated as the Championship's bottom club after incurring the mandatory 10-point Football League penalty triggered by administration. Statements from the chairman, Ken Bates, and administrators at KPMG explained that a £5m debt to the Revenue, which had to be settled before June 25, had tipped the club into receivership. "The financial burden of the past finally pushed the club into administration following the issuing of a winding-up petition by Revenue and Customs, who will be one of the company's major creditors," said Bates."The other parties who will suffer the biggest financial loss are institutions from which the board arranged funding, Astor Investment Holdings, Krato Trust and Forward Sports Fund who collectively will lose in excess of £22.0m." A newly incorporated company, Leeds United Football Club Limited - whose board will comprise Bates, the former chief executive, Shaun Harvey, and the director, Mark Taylor - has bought the business and its assets from the administrators. According to government sources the tax authorities will now be "assertive" in their negotiations. They will seek to uncover the identity of the individuals behind the Switzerland-registered Forward Sports Fund that controlled Leeds, who have thus far remained anonymous. Astor Investment Holdings, which is registered in the British Virgin Islands, secured its loans to Leeds last month through a debenture mortgage. That development is expected to make it a preferential creditor in administration. It is not currently known who is behind Astor and it is understood that the Revenue will also seek to shed light on this matter. Patrick Murrin, a long-term associate of Bates, is the only other party known to have had an interest in Forward Sports Fund. There will also be inquiries into the identity of Teak Trading Corporation, the British Virgin Islands company that has taken on the freeholds of Elland Road and Leeds' Thorp Arch training ground. The sports minister, Richard Caborn, is said to be keeping a "tight watching brief" over developments after being lobbied by fellow MPs. There is concern among fans as to why administration should be necessary: the expensive player contracts from Peter Ridsdale's stewardship have now all been paid off and income from transfers has been healthy. The sales of Rob Hulse, Ian Bennett and Matthew Kilgallon to Sheffield United generated more than £4m and there was £500,000 from Simon Walton's move to Charlton. Leeds are also believed to have received close to £1m from other transfers, and an out-of-court settlement with Chelsea over the youth-team players Michael Woods and Tom Taiwo was generally estimated at £5m. There was some transfer expenditure on the likes of Dave Livermore and Kevin Nicholls. _______________________________________________ the Leeds List is an unmoderated mailing list and the list administrators accept no liability for the personal views and opinions of contributors. Leedslist mailing list [email protected] http://list.zetnet.co.uk/mailman/listinfo/leedslist The Leeds List - "where never is heard a discouraging word..."
