BREAKING NEWS!! EFL -12 Points - Full Written Explanation Thread

[ChapSmurf]

4 minutes ago, mkowl said:

 

Yep that was pretty damming. We still presumably have not filed accounts in accordance with them either. In other words they are basing our results on previous information supplied which presumably do not show the stadium sale 

 

The ramifications on that are a bit more wide ranging than just SWFC 

 

I thought so too.

 

This is the one thing I still don't understand. Have we, or have we not, included the stadium sale in any of our accounts (whether signed off or not), or were we awaiting the outcome of the IDC?

[cowl]

1 minute ago, mkowl said:

On my phone can anyone copy in para 51 

 

For present purposes, all that needs to be recorded is that draft Heads of Terms
purporting to evidence an agreement arrived at before 31 July were produced on 6
August. We will deal with the circumstances in which these draft Heads of Terms were
created below (see paragraphs 122-125 below). The following is the text:

 

“HEADS OF TERMS
Between
Sheffield Wednesday Football Club Limited …
Sheffield, United Kingdom (hereinafter referred to as “Seller”)
And
Dejphon Chansiri, [address]
Bangkok …, Thailand (hereinafter referred to as “Buyer”)
Dated 1st of July 2018
Seller and Buyer hereinafter together referred to as “Parties” or individually as “Party”.
Transaction
The Seller desires to sell and the Buyer desires to purchase the freehold associated with
the land and buildings of Hillsborough Stadium, S6 1SW, Sheffield.
Purchase Price
The Purchase Price will be a minimum of £40 million (forty million pounds) for the sale
and transfer of the freehold of the land and building. The details of the payment terms will
be stipulated in the sales and purchase agreement.
Commitment
Both Parties agree that the terms of this letter are binding and irrevocable.”

[Guest Grandad]

4 minutes ago, Emerson Thome said:

 

This last line is wrong, and I think this affects your earlier conclusions. I think I'm right in saying the Villa process wasn't well understood at the time, and the existence of this loophole wasn't common knowledge.

 

Given that the EFL only proposed this late in the day, and only confirmed that the loophole was open for SWFC on 3rd August in the meeting, then a degree of stumbling around with the legal paperwork seems inevitable.

 

Apologies for mixing metaphors, but they didn't keep the door open into August 2018. They unlocked a locked door in August 2018, welcomed us half way through it, and 10 months later attempted to slam it shut on us.

 

Thats not true

 

[Guest mkowl]

4 minutes ago, Emerson Thome said:

 

This last line is wrong, and I think this affects your earlier conclusions. I think I'm right in saying the Villa process wasn't well understood at the time, and the existence of this loophole wasn't common knowledge.

 

Given that the EFL only proposed this late in the day, and only confirmed that the loophole was open for SWFC on 3rd August in the meeting, then a degree of stumbling around with the legal paperwork seems inevitable.

 

Apologies for mixing metaphors, but they didn't keep the door open into August 2018. They unlocked a locked door in August 2018, welcomed us half way through it, and 10 months later attempted to slam it shut on us.

 

 

 

I am perplexed when having been give a green light to a fashion we then sat on our hands for months between August 18 and it going in the accounts near as damn it a year later

[Jimbob1867]

I posted this on the appeal thread but should probably have posted here:

 

My two penneth.  I am a lawyer for what it's worth.  

 

Some good points made on this thread about the EFL eg failing to investigate Charge 2 properly, accusing Chansiri of faking how bad his English is, trying to pick when to deduct points so as to relegate us etc.  I won't comment on these further.  

 

HOWEVER - what seems clear to me is what an utter poo show things are in terms of how the club is run.  I also don't think they have a leg to stand on with respect to an appeal.  We brought this on ourselves and it seems to have been totally avoidable if we'd had competent people dealing with this.

 

The club keeps saying they proceeded because they had EFL and auditor sign off.  However: (i) the EFL basically said they would sign off if there was a binding contract before 31 July with sufficiently certain terms (particularly as to price) - and it turns out there wasn't; and (ii) the auditors included an Instructed Assumption that the heads of terms was a binding contract dated 15 July - which, it turns out it wasn't.  In fact it seems the heads of terms, while binding, had insufficient certainty as to price, and was not entered into before 31 July, but was entered into on 15 August and backdated to 15 July.  On that basis I don't think the EFL has done an about turn in relation to what they initially said would be acceptable, which seems to be the crux of our defence (although you can certainly question their motivation for only looking at this months and months later).

 

It's beyond all comprehension why the club thought a backdated contract would be acceptable from a legal point of view.  Apparently the club didn't take any decent legal advice on how to deal with this.  

 

We should have been on top of this well before the deadline and not be relying in August on an email exchange with the EFL to say this was all ok.  We seem to have got away with charge 2 partly because the EFL didn't investigate properly at the time and partly because of our own incompetence ie it seems the heads of terms was backdated but because in emails and meetings after 15 July we made clear there wasn't a binding agreement (why would you do that if you were trying to demonstrate everything had been signed off before 31 July?!) then we can't be guilty of having deliberately misled the EFL.  If we'd just backdated the heads of terms and stuck to the script throughout that it had been signed on 15 July, and not on 15 August as seems to be the case, I think we might have fallen foul of charge 2 as well.

 

There don't appear to be any realistic grounds for a reduction in the points deducted, only that we be found not guilty, which doesn't seem at all likely.  

 

We should just accept this and move on and PLEASE, DC, appoint some competent people to run the club.

[ChapSmurf]

2 minutes ago, mkowl said:

On my phone can anyone copy in para 51 

 

51. For present purposes, all that needs to be recorded is that draft Heads of Terms purporting to evidence an agreement arrived at before 31 July were produced on 6 August. We will deal with the circumstances in which these draft Heads of Terms were created below (see paragraphs 122-125 below). The following is the text:

 

“HEADS OF TERMS

 

Between Sheffield Wednesday Football Club Limited ... Sheffield, United Kingdom (hereinafter referred to as “Seller”)

 

And

 

Dejphon Chansiri, [address]Bangkok ..., Thailand (hereinafter referred to as “Buyer”)

 

Dated 1st of July 2018

 

Seller and Buyer hereinafter together referred to as “Parties” or individually as “Party”.

 

Transaction

 

The Seller desires to sell and the Buyer desires to purchase the freehold associated with the land and buildings of Hillsborough Stadium, S6 1SW, Sheffield.

 

Purchase Price

 

The Purchase Price will be a minimum of £40 million (forty million pounds) for the sale and transfer of the freehold of the land and building. The details of the payment terms will be stipulated in the sales and purchase agreement.

 

Commitment

 

Both Parties agree that the terms of this letter are binding and irrevocable.”

[Emerson Thome]

There seems to be reasonable grounds for appeal to me and the majority of the wrongdoing seems to fall upon the EFL (the initial ambiguity about the rules and then the backtracking and dishonesty to explain their previous stance).

 

The panel is scathing about the punishments for breaking the F&P regulations weren't made clear until months after all these discussions took place. I think the club can justifiably argue that if they had known the punishment for breaching F&P was points deductions they would have acted sooner (the majority of European competitions seem to have fines and/or reductions in squad size).

 

I think they wrote off the opportunity of making back the £18m they needed, but as little as £3 million would have reduced the punishment from -12 to -9. There were players - i.e. Joao (who was later sold for £5m plus), Forestieri or Reach. One of these could easily have been sold to reduce the punishment. It seems strange to punish someone for a crime according to a set of punishments and sanctions that didn't exist at the time.

[mark1948]

12 minutes ago, cowl said:

 

The adjectives I'd use are pragmatic (under Harvey) and principled (under Parry) - and that's also if I'm feeling kind.

 

I don't actually think they're vindictive now - at least that's not their main drive, even if in effect their resulting behaviour has had the appearance of being vindictive. I just think that in the zeal to stand for some principles (and, more to the point, to be seen to stand for them) they've partially lost sight of what their responsibility as an institution is.

 

If Parry wants to come in and tighten up the ship, then that's fine, but he has to acknowledge that the breaches that took place under the previous management of the EFL are from the past and he has to live by them. The EFL is the EFL. The EFL isn't Rick Parry, and he can't be making this a personal war against right and wrong or however else it is that he perceives his role here.

 

Mr Parry decided to re-open settled cases and punish what had been agreed as being in order previously. Principled or not, The Club, Our Club, accepted a deal with the EFL only for the deal to be deemed unacceptable 10 months later. How on earth that is fair and equitable escapes me entirely. It certainly looks vindictive and that alone should be sufficient for honourable people to accept the status quo.

Edited August 17, 2020 by mark1948

[Emerson Thome]

4 minutes ago, Grandad said:

 

Thats not true

 

Yes, but there's a part later that suggests the club thought the window for this had passed and as of 31st July they were expecting a punishment. It was only after meeting the EFL in August that the process was reopened.

[Guest mkowl]

1 minute ago, cowl said:

 

For present purposes, all that needs to be recorded is that draft Heads of Terms
purporting to evidence an agreement arrived at before 31 July were produced on 6
August. We will deal with the circumstances in which these draft Heads of Terms were
created below (see paragraphs 122-125 below). The following is the text:

 

“HEADS OF TERMS
Between
Sheffield Wednesday Football Club Limited …
Sheffield, United Kingdom (hereinafter referred to as “Seller”)
And
Dejphon Chansiri, [address]
Bangkok …, Thailand (hereinafter referred to as “Buyer”)
Dated 1st of July 2018
Seller and Buyer hereinafter together referred to as “Parties” or individually as “Party”.
Transaction
The Seller desires to sell and the Buyer desires to purchase the freehold associated with
the land and buildings of Hillsborough Stadium, S6 1SW, Sheffield.
Purchase Price
The Purchase Price will be a minimum of £40 million (forty million pounds) for the sale
and transfer of the freehold of the land and building. The details of the payment terms will
be stipulated in the sales and purchase agreement.
Commitment
Both Parties agree that the terms of this letter are binding and irrevocable.”

Cheers

 

That is the unconditional contract to support the inclusion in the financial statements under FRS 102 

 

I refer that to any other accountants on here for their views 

 

The preamble upto para 51 says a lot about the accounting standards and the technical guidance.

 

Much of which I have said on here.

 

I have to say I personally do not consider that adequate. My view, others could and did disagree

[Guest Grandad]

4 minutes ago, mkowl said:

I am perplexed when having been give a green light to a fashion we then sat on our hands for months between August 18 and it going in the accounts near as damn it a year later

 

^^^

 

This

 

we get given an open goal and do a Raheem Sterling

[Animis]

17 minutes ago, mkowl said:

Well 41 pages and I think I shook my head in disbelief about 3 times a page. What struck me is the contract for the sale of the stadium

 

I have banged on here that if the evidence was there then we could recognise that transaction in the 2018 accounts 

 

This is dismissed within the report, we failed the FFP rules because that contract was basically not adequate to do so. It is 3 paragraphs long.

 

I have seen more robust contracts for the lending of a lawnmower to a neighbour.

 

The report says the accounts were not prepared in accordance with accounting standards. So basically we have failed that requirement.

 

The rest to me is peripheral. The EFL basically kept the door open into August 2018 to get this sorted as well. 

 

 

 

 

 

Yes - and either DC was badly advised or he was unsure about the sale - money availability or risk etc.

 

The HoTs were clearly rushed and where not robust enough to form a proper basis for the transactions. As you say, the EFL offered the club a way out, and if we had been more diligent and expedite, it seems we could have had it all stitched up by 31st July 2018 or at least got the date fixed for then.

 

People saying KM comes out of this well perhaps ought to reflect that she countersigned the HoTs in August 2018 with a date of 15th July. She was clearly party to the shambles, whether she advised otherwise, but she still signed the document.

 

Hopefully DC learns from this, and we get some proper executives in place at Hillsborough.

[Joe Sunburn]

“Effectively “?

What was so ineffective about that sale?

It was a legal sale approved by the EFL.  

 

 

[Emerson Thome]

5 minutes ago, mkowl said:

 

I am perplexed when having been give a green light to a fashion we then sat on our hands for months between August 18 and it going in the accounts near as damn it a year later

 

Agree. And should have involved solicitors and more legal experts sooner.

 

I think the reason is that they expected to get a fine, and it was only when later the EFL made clear they were pursuing a substantial points deduction that prompted them into action.

[Essix Blue]

Maybe DC waited because he believed Jos would get us promoted........

 

 

 

[cowl]

Just now, Essix Blue said:

Maybe DC waited because he believed Jos would get us promoted........

 

 

 

[cowl]

The thing is, we all know it's true!

[Guest mkowl]

1 minute ago, Emerson Thome said:

 

Agree. And should have involved solicitors and more legal experts sooner.

 

I think the reason is that they expected to get a fine, and it was only when later the EFL made clear they were pursuing a substantial points deduction that prompted them into action.

 

I will re-read again but it says that a property lawyer was not consulted in the drafting of the Heads of Term. The lawyer we used was not from that specialism. KM drafted it but she is qualified in Belgium.

 

To give context a client of mine bought a field for 1m for housing and the heads of term were about 3 pages long. The actual contract about 150 pages in the end.

 

 

 

 

 

 

 

 

[Guest Grandad]

7 minutes ago, Emerson Thome said:

Yes, but there's a part later that suggests the club thought the window for this had passed and as of 31st July they were expecting a punishment. It was only after meeting the EFL in August that the process was reopened.

 

You (nor I) have no idea whether the reason we called for that meeting was to go there and suggest it ourselves

[Essix Blue]

4 minutes ago, cowl said:

You laugh.  
 

But...........