League may order Cellino to quit at Leeds over Italy tax evasion

Shaun Harvey
Shaun Harvey
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MASSIMO Cellino’s ownership of Leeds United is back on the agenda after Football League chief executive Shaun Harvey reaffirmed the governing body’s plan to ban him from running the club if a tax offence committed by Cellino in Italy is found to be dishonest.

In remarks which sources close to Cellino described as “inappropriate and disruptive”, Harvey said the League would order the 58-year-old to resign as a Leeds director and sell his majority shareholding if the Sardinian judge who convicted him of tax evasion in March decided that Cellino was guilty of an “act of dishonesty”.

Dr Sandra Lepore, a judge in Cagliari, fined Cellino £500,000 after he was charged with failing to pay import duty owed on a private yacht.

The Football League used the court case to rejected his 75 per cent buy-out of Leeds, saying a conviction for dishonesty disqualified him from acquiring the club under the rules of its Owners and Directors Test.

Cellino overturned that decision on appeal and subsequently completed his takeover on April 7 after Tim Kerr, an independent QC, ruled that he had insufficient evidence to prove that the Italian had been guilty of a dishonest act.

Kerr said a decision on that matter would depend on the details of a written judgement issued by Dr Lepore - a judgement which was due to be published in June but has yet to materialise.

Harvey, the former United chief executive, claimed the failure of the Sardinian authorities to provide a full verdict had left a “cloud hanging over” Cellino’s takeover.

Speaking at the Soccerex convention in Manchester, Harvey said: “It’s exceptionally disappointing that we haven’t actually had the judgment, if only to draw a line under the whole scenario so that everyone knows where they are.

“It’s a cloud still hanging over the Football League, the club and Mr Cellino himself.”

Neither the Football League nor Cellino have been told when Dr Lepore plans to issue her written judgement or what that judgement is likely to say.

Cellino has owned Leeds as majority shareholder for the past five months, a period in which United have undergone substantial restructuring and major financial change.

He inherited a club who were losing in excess of £1m a month - losses which will almost certainly land Leeds with a transfer embargo in January under the Football League’s Financial Fair Play regulations - and he has promised to repurchase their Elland Road stadium at a cost of £16m by November.

But Harvey said: “The actual single arbiter in the matter made it very clear that when the written reasons are issued as part of the judicial process, if it is clear in there that the act was one of dishonesty - which is the test we apply - then at that stage (Cellino) would fail the Owners and Directors Test and as such wouldn’t be able to be a director of the football club or exert any control.

“He is under an obligation to divest himself of his shares at that stage.

“We’d obviously give the club a reasonable period of time to organise its affairs because you wouldn’t want to put the future of the club at risk. It’s a matter the Football League board would have to consider at that particular time.”

Leeds have not responded publicly to Harvey’s comments but a senior source said they were “inappropriate and disruptive at a time when the club is in the middle of serious restructuring and planning for the future.” The two sides are understood to have been in contact since Harvey’s remarks were published.

United accept that Cellino might be forced to quit the club’s board if Dr Lepore rules that his offence was dishonest but the source warned that an order from the Football League for the Italian to sell his shares would take the organisation into “uncharted territory.”

Any move to force Cellino out would potentially lead to further appeals and court cases. “It would get extremely messy,” the source said.

United’s official website lists six directors at Elland Road - Cellino, his sons Edoardo and Ercole, his America financial advisor Daniel Arty, and Salem Patel and Salah Nooruddin, two representatives of minority shareholder Gulf Finance House.

Football League regulations prevent disqualified individuals from acting as ‘shadow directors’ by funding the club through close associates, a rule which in theory would prevent Cellino from passing control to the existing board at Leeds.