Exclusive: Associate of potential Owls' investors spent time in prison

Russell Morgan, who was given a 16-month sentence last year, has met Wednesday chairman Howard Wilkinson but the consortium proposing a 2m lifeline to the club last night insisted Morgan had no financial or managerial role in the deal.

It can also be revealed that the man leading the consortium is Dubai-based Kevin Mundie who is heading a group of six other potential investors who are planning an initial 2m cash injection followed by a full takeover.

But despite Wednesday's public statement two weeks ago that 2m would be "immediately" advanced, it is understood negotiations between the consortium over the level of each individual's financial commitment are still ongoing and no agreement has yet been reached.

Mundie, originally from Aberdeen, is a senior executive of Certified Oilfield Rentals (COR) – a company which supplies specialist equipment to the oil industry across the world. He would be the lead financier of the deal.

A spokesman for the bid last night put distance between the consortium and Morgan who is understood to have served less than half the sentence handed down at Cardiff Crown Court last September.

He said: "Russell Morgan is not providing any funding and has not, and will not, play any part in the consortium involved in the proposed acquisition of Sheffield Wednesday.

"He has met Howard Wilkinson and taken part in meetings related to the proposed acquisition but he has not taken part in any meetings involving the bank, solicitors or accountants.

"He is a former semi-professional footballer so he does have knowledge of the game and he is a friend of some of the investors but he will not have – and cannot have – any involvement in the financial or management side of the investment or any other ongoing involvement with Sheffield Wednesday."

The spokesman also said an investment company set up in April, connected to Mundie and Morgan, will not play any part in the bid for the Owls. COR Investment Corporation has two directors – the wives of Mundie and Morgan.

"We would like to clarify that a different entity would be established –not COR Investment Corporation – for the investment at Sheffield Wednesday. The acquisition must, and will be, undertaken through the vehicle of a newly incorporated English company, to which the investors will subscribe, to finance the acquisition and inject further working capital."

Morgan, who had a number of Welsh rugby players among his clients, was jailed for a scam worth a total of 481,000.

The court was told Morgan did not tell his neighbour, a manager with an HSBC branch, that he was an undischarged bankrupt when he tricked him into providing a line of credit worth more than 200,000.

Morgan omitted his middle name, changed the year he was born and said he was a home owner when he was only renting to obtain the money. He later lied again on court documents about his bankruptcy.

He was jailed after admitting 11 charges of obtaining money while an undischarged bankrupt and two of making a false statement. He was sacked from his then job as a Dubai-based investment consultant as a result.

Morgan, who is understood to now live in London, did not respond to a request to comment.

The involvement of Morgan may ring alarm bells with supporters already growing restless after a lack of progress since the club issued a statement on October 8 saying the investors would "immediately" inject 2m to ease severe cash flow problems.

Wednesday face a second winding up petition over unpaid tax, due to be heard at the High Court on November 17. The club's bank, the Co-operative, which is already owed around 25m, provided nearly 800,000 to bail Wednesday out of the first winding up petition last month but is thought to be unwilling to help stave off administration again.

Since the initial club statement, both Wilkinson and former Owls' manager Chris Turner, who is the public face of the bid, have continued to make positive comments on the arrival of the 2m but it has yet to materialise.

Last night Wilkinson said: "He (Morgan) was introduced to me as a friend of one of the investors and that's the end of it as far as I'm concerned."

He acknowledged care had to be taken with "people's history" but added that Morgan was not the "money man".

Wilkinson said that the overall situation remained unchanged since a statement issued last week in which he said he was "convinced about both the desire and capability of the group to finalise the deal".

A club source also told the Yorkshire Post that Wednesday remain open to offers and that talks had taken place between other potential investors and the Co-operative Bank in the last few days.