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Leeds United: Fresh twist in battle for control of Whites

Salem Patel and David Haigh.
Salem Patel and David Haigh.
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Owners deny reports they are seeking to sell the club but their future is far from certain. Leon Wobschall reports.

Exactly three months ago today, GFH Capital officially took over at Leeds United.

But the contented smiles among Whites fans that December day have now been replaced by furrowed brows and widespread bewilderment.

Today, confusion reigns more than ever with thousands of supporters wondering just what is going on behind the scenes at their football club and what are the motives of the Dubai-based private equity group.

This despite yesterday’s attempt by GFH Capital to clarify its position after it was revealed in the end-of-year financial statements of their parent company Gulf Finance House (GFH) of its formal intention to start negotiations to sell the club.

To add to the confusion, reports last night suggested that GFH had all-but completed the sale of the club – with the bidders to take over led by local businessman and multi-millionaire Steve Parkin, who is said to be working on the deal with potential partners from the Middle East.

Parkin, who famously tried to buy United back in 2004, declined to comment when contacted by the YEP.

But it is believed that talks remain ongoing and that while a deal has not yet been concluded, it could be shortly.

It is understood that the bidders are dealing with GFH and not its 100 per cent subsidiary GFH Capital, with GFH Capital acting CEO Salem Patel and deputy David Haigh – both United club directors – seemingly sidelined from the potential deal.

Parkin is a figure well known on the Yorkshire business scene. Alongside a previous bid to purchase Leeds, he was also linked with a move to purchase Bradford City and the Bradford Bulls to form a joint sporting club in a new stadium back in 2011.

He is the chairman of Brighouse-based distribution firm Clipper Logistics, a company with a £200m turnover, 28 distributions and 2,500 staff.

Talk of United being back on the market had intensified after details of GFH’s financial statement for the year to December 31, 2012 were revealed.

Part of the statement read: “The group has an active plan to sell its stake in LUFC Holdings (company which owns LUFC) and accordingly the assets and liabilities acquired were classified as held for sale and presented in the consolidated statement of financial position. Subsequent to the year end, GFH has commenced negotiations relating to the sale of its stake in LUFC Holdings.”

But then came a separate GFH Capital statement yesterday afternoon. Part of which was at odds with the above and only added to the sense of perplexity.

It stated: “Gulf Finance House (GFH), parent company of Leeds United FC owner GFH Capital, published its financial audited report that stated it was looking to sell its stake in the club. “To clarify and as previously stated, GFH Capital is looking for investment in part of its share in the club, not its entirety. GFH Capital has been transparent since acquiring Leeds United and is continuing to look for strategic investors in part of the club that can invest in Leeds United, alongside GFH Capital, to ensure a long term, sustainable future.”

What can be gleaned is that while GFH seem willing to sell up lock, stock and barrel, GFH Capital – it’s 100 per cent subsidiary – only wish to sell a part stake of around 30 per cent.

Yesterday’s call for further investment and message that they are in it for the long haul is the same one which GFH Capital made after rejecting a bid for a majority stake in the club on February 10 – less than nine weeks after taking over.

It remains to be seen what happens next regarding United’s future – up in the air on the pitch and off it with the managerial issue also looming increasingly large for the club’s owners, with the countdown to boss Neil Warnock’s departure having already begun.

As it stands, despite the attempts by GFH Capital to clarify matters regarding their ownership intentions, cynicism is sure to abound among supporters.

It is all a far cry from last December when, just four days before Christmas, there was real hope among the Leeds faithful that the club had indeed turned the corner with GFH Capital taking over the Elland Road reins from Ken Bates. But the honeymoon period has not lasted long. And supporters are yet to be convinced that a brighter future is in the offing.

The admission from United’s new owners that they were seeking strategic investors so soon after taking control only fuelled further doubts about their long-term ability to fund the club – and they refuse to go away.

Patel, GFH Capital’s chief investment officer, has previously alluded to cashflow shortfalls, pointing to the previous regime’s mortgaging of season-ticket money to financial firm Ticketus in order to receive £5m up front to pay for East Stand refurbishment work.

Patel has also spoken about GFH Capital being effectively hamstrung by funds being committed to building projects, which have heightened their appeal for investment.

Yesterday’s statement did confirm that from the GFH Capital point of view, at least, there is an intention to continue to financially support the club.

They revealed how an injection of around £10m in funding has already been spent since December – both to strengthen the first-team squad and provide working capital.

But it is clear that new investment remains a priority and with talk of supposed new owners holding advanced talks with parent company GFH, it raises the very real possibility that Mr Patel and his GFH Capital team may yet be sidelined before they get the chance to develop the club any further. Click here to register and have your say on the Leeds United stories and issues that matter to you