The Football League want United’s controversial owner out of Elland Road but as Phil Hay reports, Cellino still has options open to him.
No line in the sand and no closure. Not yet, despite the Football League’s latest ruling against Massimo Cellino.
As it did at the start, the governing body wants him gone from Leeds United and English football but Cellino has some wriggle-room left.
Today’s announcement, disqualifying him from owning Leeds and banning him from exerting any financial or operational control at Elland Road, is not definitive.
Cellino has 14 days to appeal, as he did successfully when the League blocked his takeover in March, and 28 days before his ban takes effect.
Even then, the conviction for tax evasion threatening his ownership will be spent in less than five months’ time.
The League’s written rationale for barring the Italian as an owner and director states clearly that the disqualification runs until March 18, 2015 – a year on from the date when a court in Cagliari found Cellino guilty of failing to pay VAT on a private yacht.
That verdict, which Cellino is currently appealing, would previously have been spent after five years but a recent change to UK law means any conviction carrying the penalty of a fine is now considered spent after just 12 months.
The judge who found the 58-year-old guilty, Dr Sandra Lepore, imposed a fine of around £500,000.
Cellino faces further allegations of wrongdoing in Italy and other court cases involving him are pending but in respect of the specific case which the League used against him today, United’s owner is essentially facing a four-month ban.
What that means for the club in practice is hard to predict.
As one of Cellino’s legal advisors said far back in the summer, this is “totally uncharted territory – a situation we’ve never seen before.”
The League’s ruling disqualifies Cellino not only from acting as owner or a director of Leeds but from acting as a “relevant person” at Elland Road.
The governing body will forbid him from taking or influencing day-to-day managerial decisions or from bankrolling the club as he has since his buy-out on April 7.
Leeds, according to Cellino, were losing around £1million a month when he first purchased a 75 per cent stake from Gulf Finance House. He has wrestled with their finances ever since and on Saturday, after a rousing 2-0 win over Derby County, he told the BBC that he had arranged to inject another £20m of his family’s money into United to improve the club’s liquidity.
The liabilities at Elland Road are substantial and Cellino faces a pressing payment of £6m owed to GFH before December 14. It is the final installment of the £11m fee he and the Bahraini bank negotiated when his takeover was first arranged in February.
Prior to today’s announcement from League, that bill was due to land at a time when the relationship between Cellino and GFH had grown increasingly delicate and frosty. The League’s move to banish him from Leeds puts that £6m sum in a stark and very different light.
Cellino has little choice but to pay or embark down a risky legal road.
The Share Purchase Agreement drawn up between him and GFH expressly states that if Eleanora Sport Limited – the firm which Cellino used to buy Leeds – fails to meet any financial obligation within 30 days of it being owed, GFH has the right to repurchase Eleanora’s stake in United for the token sum of £1.
At present, GFH is bearing none of the cost of running Leeds or resolving the club’s debts, though Cellino was in Bahrain for talks with the bank yesterday and believes GFH, as a minority shareholder, is suddenly ready to invest £5m into United.
One of the biggest questions posed by the Football League’s attempt to ban Cellino is how the club will secure capital injections without him in the thick of the action. It is also unclear who would take control of top-level decision-making in his absence.
Cellino’s two sons are on the board at Elland Road but to all intents and purposes he is the club’s managing director and he has never employed a chief executive.
It is abundantly clear that Cellino operates a one-man show in which authority is neither shared nor delegated.
The Football League’s rules do not allow individuals disqualified as owners and directors from acting as “shadow directors” and controlling a club in the background.
In theory, a ban on Cellino running Leeds is a ban on anyone connected to him doing the same – family members, business associates or other people acting on his behalf.
At no stage in its written judgement does the Football League state in layman’s terms that Cellino is required to sell his shareholding or give a timescale for doing so. It is merely implied. Sources close to him ridicule the idea of Cellino negotiating a sale of Leeds in the months before his tax conviction is spent.
They see no sense or plausibility in the idea that he should auction his stake in February, only to find that he qualifies as an owner again in March. This might become a game of nerve, unless Cellino decides that he’s tired of fighting. He is yet to indicate whether he will appeal against his dramatic disqualification. According to the League, any appeal can be made on two grounds: firstly, that the League is wrong to say that he is the subject of a disqualifying condition, and secondly that “there are compelling reasons why (the conviction issued by the Cagliari court) should not lead to disqualification.”
The League’s written explanation shed a little more light on the conviction imposed on Cellino in Cagliari in March.
It revealed that the written judgement from Dr Lepore was actually published on July 28 and the League secured a copy through Italy’s Court of Appeal.
Cellino’s Italian lawyer, Professor Giovanni Cocco, submitted comments on the judgement to the League on November 19 and November 21, and the League’s board met last Thursday to decide whether Cellino was in breach of its Owners and Directors Test. The League says it chief executive – ex-Leeds CEO Shaun Harvey – did not take part in a “unanimous” vote due to “an interest as a former director and employee of LUFC.” Cellino is required to quit as owner and director of Leeds within 28 days regardless of how long an appeal takes. The League promised that it would attempt to have an appeal heard before those 28 days elapse. To that end, it should not be long before Leeds discover if the League’s decision is a cast-iron case.
Cellino has at this juncture three options: to try and ride out a short ban, to fight and overturn the ruling against him or to give up and sell Leeds. Cellino said tonight that a sale is “not happening, not a chance.”
On the contrary, he continues to insist that a £20m cash injection is about to go into the club – £15m from Eleonora Sport, £5m from GFH.
He is due back in Leeds from Bahrain tomorrow and will review the League’s verdict with his lawyers before deciding whether to contest it.
Failing that, he is presently minded to swallow his punishment and try to get himself through to March 18, arguing that he is a representative of Eleonora Sport and not United’s ultimate owner. His message tonight? This isn’t over. You can be sure of that.