Former Leeds United managing director David Haigh remained in custody for a 17th consecutive night last night as Leeds continued to press his lawyers to drop the winding-up petition served on the club by Sport Capital.
Haigh is being held at a police station in Dubai amid on-going attempts to release him on bail and efforts by United to fight off Sport Capital’s bid to reclaim a loan of £950,000.
Thirty six-year-old Haigh – Leeds’ managing director until April – was arrested by Dubai police on May 18, accused of financial irregularities by Gulf Finance House, United’s former owner and his previous employer.
GFH alleges that Haigh was guilty of “fraud, embezzlement and money-laundering” during his time as deputy chief-executive of GFH Capital, the bank’s private equity arm. Many of the claims against him relate to his time as managing director of Leeds.
Haigh, who was arrested at GFH’s offices after being invited to Dubai to discuss the offer of a new job with the bank, denies any wrongdoing and is yet to be charged with any offence. He has failed with one application for bail.
His UK bank accounts have been frozen as a result of his arrest and GFH yesterday applied to a court in Dubai to freeze all of his global assets. Prosecutors there are still considering whether to bring formal charges against him.
The YEP understands that GFH’s allegations will be used by United and club owner Massimo Cellino in their battle against the winding-up petition served on Leeds by Sport Capital in April.
Sport Capital – a Guernsey-based firm with strong links to Haigh – made a loan of £950,000 to United last November, a sum used to pay operating costs at Elland Road.
The debt was called in during the first week of April, four days before Cellino’s takeover of Leeds went through, and Sport Capital issued a winding-up petition on April 25 after Cellino failed to meet a deadline set for repayment of the loan.
United’s main bank account has been frozen as a result and the club failed to meet the wage bill owed to their playing staff and casual staff last month. The club’s finances will be heavily restricted until the petition is dismissed or Cellino agrees to repay Sport Capital’s loan.
A judge at the Royal Courts of Justice in London is due to consider Sport Capital’s claim on Monday, June 9, and hold a substantive hearing the next day. Cellino’s legal team, who are contesting the petition, hope to have it withdrawn before Monday’s court session takes place.
After intensive analysis of paperwork at Elland Road, Leeds believe they have evidence proving that the sum of £950,000 was not put up by Sport Capital and that any money loaned to the club came from Haigh himself.
A source close to proceedings said Cellino’s lawyers would attempt to argue that any cash given to Leeds by Haigh was “potentially proceeds of crime” in light of his recent arrest in Dubai.
Haigh’s spokesman, Ian Monk, declined to comment on his situation yesterday but a friend, who asked not to be named, told the YEP: “David’s now into his third week in custody. Absolutely no charges have been brought against him.
“He doesn’t blame the Dubai authorities for anything that’s happening but he does feel deeply betrayed by others who he thinks are misusing the legal system there.”
Prior to his arrest, Haigh was attempting to secure payment from GFH for his time spent as managing director of Leeds.
He took up that position at Elland Road last July having first helped to push through GFH’s buy-out of United in December 2012 and then served on the club’s board as a director for seven months.
He was employed by GFH Capital until February of this year when he stepped down with the intention of becoming Leeds chief executive under Cellino. Haigh later resigned and quit United in April after his relationship with Cellino broke down.
His visit to Dubai on May 18 came after GFH – the Islamic investment bank based in Bahrain – proposed to re-employ him after his exit from Elland Road. He was detained by police within minutes of arriving at GFH’s offices.
Authorities in the UK, including West Yorkshire Police, have been sent details of the allegations against Haigh. GFH claims that the financial irregularities amount to a sum of around £4m.
GFH has made no comment since last week when Jinesh Patel, the new CEO of GFH Capital, said: “The issues that GFH has referred to the Dubai and UK authorities are unrelated to the purchase by Massimo Cellino of a 75 per cent stake in Leeds United from GFH earlier this year.”
The Bahraini bank continues to hold a minority stake in Leeds following its sale of the club to Cellino on April 7, though its influence at Elland Road has been minimal for the past two months.
Cellino has spent much of that period addressing debts and liabilities left behind by GFH but the winding-up petition served on Leeds by a Sport Capital prevented him from paying casual staff on time midway through May and forced United’s squad to go without their monthly wages last week.
The club’s senior players spoke with Cellino during individual meetings at Elland Road on Monday but have been told that their salaries cannot be met until the winding-up petition is lifted.
Football Association rules prevent clubs from paying wages to playing staff via personal or third-party bank accounts, stating that “payments made to players must be made by the club and fully recorded in the accounting records of the club.”
General staff at Elland Road received their wages as scheduled on Friday.