Leeds United accepted a seven-figure loan from Massimo Cellino in advance of the Italian’s as yet incomplete takeover, the Yorkshire Evening Post has learned.
A sum of around £1.5million was borrowed by Leeds last week and is unrelated to the structured payments due from Cellino for a 75 per cent stake in the club.
While the owner of Cagliari has ploughed cash directly into United, he is not thought to have paid any money for shares to Leeds owner Gulf Finance House despite the two sides agreeing the terms of a buy-out on Friday afternoon.
Cellino’s deal is subject to Football League approval and he and GFH have not yet exchanged contracts. Cellino nevertheless believes that the sale to him is effectively done.
The receipt of another loan by Leeds will increase concerns about the club’s financial state.
Officials at Elland Road have made no secret of the fact that United are operating at a loss and the YEP was recently told that they stand to lose around £11m in the current financial year.
The £1.5m taken from Cellino appears to have deepened the liabilities faced by any would-be buyer of the Championship club. Leeds have accepted repeated loans in the past six months, a number of them paid personally by managing director David Haigh.
In a radio interview on Monday night, director Salem Patel - an employee of GFH – said: “Like with most other football clubs, the club runs at a loss. It needs cash resources to be invested by its owners.”
GFH has made no comment on the purpose of Cellino’s loan, though the YEP understands that he received no shares in return for it.
United’s wage bill was due at the end of last week and they made no additions to their squad before Friday’s transfer deadline.
A deal to bring in 23-year-old Andrea Tabanelli from Cagliari – a transfer arranged by Cellino – is in limbo while the Football League considers whether the necessary paperwork was signed in time.
Leeds’ questionable financial position has encouraged GFH to sell a majority shareholding, and Cellino looked to have closed out a deal last Friday.
The agreement between him and GFH was the cue for chaos at Elland Road as Cellino instructed his lawyer, Chris Farnell, to sack manager Brian McDermott and acting chief executive Paul Hunt immediately. McDermott was later reinstated by GFH.
The drama led to a rival takeover bid from a consortium involving Andrew Flowers, the boss of United shirt sponsor Enterprise Insurance, and former Manchester United International managing director Mike Farnan.
The group met with GFH officials in London yesterday having promised to match Cellino’s offer. Neither side was available for comment last night.
In a further development, it was revealed yesterday that Enterprise Insurance has issued a winding-up petition against Leeds over an alleged unpaid debt. The petition is to be heard by the High Court next month.
Flowers issued it on January 29, the day when the Sport Capital takeover bid which he was backing collapsed amid disagreements with GFH.
Financial experts believe the petition is a means of delaying the sale of Leeds, potentially giving rival groups more time to court GFH and strike a purchase of their own.
A statement on Leeds United’s website said on Tuesday night: “The winding up petition issued by Enterprise Insurance, a sponsor whose managing director, Andrew Flowers, claims to support the club, is misconceived and an abuse of legal process. It is being vigorously contested by the club’s lawyers.
“As there were no valid grounds to issue the petition, we can only assume that Mr. Flowers is seeking to influence the deliberations of the club’s owners and management in relation to the take-over negotiations.
“Under the ownership of GFH Capital Leeds United has always met its financial obligations, and it will continue to do so.”
Enterprise inflicted another blow on United on Friday night when it announced that it would be withdrawing its sponsorship of the club in protest against Cellino’s sacking of McDermott.
Speaking at the time, Flowers told the YEP: “In no way do we wish to be associated with this regime.”
THE MAIN PLAYERS
MASSIMO CELLINO: The owner and president of Cagliari since 1992 and a Sardinian businessman who made his fortune in agriculture. Certain reports set his family’s wealth at several hundred million pounds.
ANDREW FLOWERS, MIKE FARNAN: Both were part of separate consortiums who bid for Leeds late last year but their mutual opposition to Cellino’s takeover brought them together over the weekend.