The Football League is likely to wait for the outcome of a tax case involving Massimo Cellino before ruling on his takeover of Leeds United after telling a Leeds MP that the Italian will not be rejected on the basis of pending charges.
Football League chief executive Shaun Harvey told Greg Mulholland, the Liberal Democract Member of Parliament for Leeds North West, that Cellino would be considered “innocent until proven guilty” of any allegation against him, including charges of embezzlement related to the construction of a new stadium for the 57-year-old’s Italian club Cagliari.
But the governing body’s decision on whether to approve his purchase of Leeds may now depend on a different case in which Cellino is accused of avoiding payment of VAT on a luxury yacht. That case is due to be heard by a court in Sardinia on March 18.
A meeting of the Football League’s board is scheduled to take place on March 13 – a week today – and the League was keen to conclude its analysis of Cellino’s takeover of Leeds in time for that date.
The new allegations of tax evasion against Cellino, however, are dissuading the organisation from approving his 75 per cent takeover ahead of his forthcoming appearance in court.
Cellino denies claims that he avoided payment of an import tax of 400,000 euros on a private yacht bought by him in 2010. Prosecutors in Italy want the courts to seize the boat and fine him more than one million euros.
The owner and president of Cagliari Calcio has two previous convictions for fraud and false accounting, one of which was overturned on appeal. The other is now classed as spent.
Neither penalty would prevent Cellino from buying Leeds under Football League rules but a fresh conviction for tax evasion might wreck his proposed buy-out of current United owner Gulf Finance House.
GFH’s sale of a majority stake to Cellino was agreed at the end of January, with contracts exchanged and a first payment made during the first week of February, but the Football League is yet to give its approval of Cellino and has been closely examining both his funding and the terms of the deal.
Mulholland met with Harvey – the former Leeds chief executive – in the Houses of Parliament last Wednesday to pose questions about the takeover and seek assurances from Harvey that the League was “following due process fully and properly.”
Mulholland told the YEP: “Clearly there are lots of people in Leeds who are passionate about Leeds United and want to see the club succeed.
“Everyone wants to see a conclusion to the current talks and the current situation and I asked to speak to the Football League to make sure that they were following due process fully and properly. They made clear to me that they were.
“We all have an interest in making sure that people who become owners and directors of football clubs are appropriate.”
In a letter sent by Harvey to Mulholland the day after their meeting, the Football League chief executive – a man heavily involved in the sale of United by Ken Bates to GFH in 2012 – outlined the approval process but stressed that the Owners and Directors Test “operates on the basis of innocent until proven guilty, in respect to potential further charges.”
Cellino is also being investigated by the Italian authorities over allegations that he misused public money during the building of Is Arenas, a temporary ground used by Cagliari for Serie A matches.
Harvey’s letter to Mulholland added: “We recognise that the uncertainty caused for the fans of (Leeds) at this time is disturbing for many of them. However, we need to ensure we make the correct decision based on the facts as known, against the backdrop of our own rules – which we will adhere to at all times.”
GFH, meanwhile, is facing questions over the distribution of shares in Leeds after it emerged that the League has asked for clarification over the exchange of a majority stake between the Bahraini bank and club chairman Salah Nooruddin.
The accounts of GFH published last June remarked on the “placement of majority stake in LUFC to strategic investors.” Those shares are believed to have been acquired by Nooruddin but have since been repurchased by GFH in anticipation of Cellino’s takeover. Nooruddin, a Bahraini businessman, originally bought a 3.33 per cent stake in Leeds through his company, Envest Limited. An ownership statement on United’s official website was later changed to show that Nooruddin’s shareholding had increased to more than 10 per cent.
That statement was altered again last week with Envest removed completely from the list of companies which own more than a 10 per cent stake in Leeds. GFH Capital and Bahrain’s International Investment Bank (IIB) are now named as the only major shareholders.
GFH was asked by the YEP to confirm the exact date of the sale of shares by Nooruddin back to GFH and to comment on whether the relevant stock exchanges in Bahrain and Dubai had been informed of the deal. The bank did not respond.