GFH Capital has further diluted its stake in Leeds United by assigning a small portion of shares to unnamed members of the club’s board.
United’s owner confirmed that a number of directors at Elland Road have been handed equity in the Championship side after accounts for its parent company, Gulf Finance House, showed GFH Capital’s stake had fallen to 86.67 per cent.
The Dubai-based firm took full control of Leeds in December and subsequently sold a tenth of its 100 per cent stake to Bahrain’s International Investment Bank (IIB) for a sum of £2.5million. Gulf Finance House’s report, however, states that “the group sold (a) 13.33 per cent stake” in United during the first three months of 2013, 3.33 per cent more than it relinquished to IIB in March.
Asked about the anomaly, GFH Capital said the additional equity had been acquired by directors of Leeds, though it declined to name the board members concerned.
It stressed, however, that former owner and outgoing chairman Ken Bates was not one of the recipients and continues to hold no shares in the Elland Road club.
Bates is an existing board member at Leeds but will resign as chairman on June 30 to begin a three-year term as president. Chief executive Shaun Harvey is also a director along with GFH Capital employees David Haigh, Hisham Alrayes and Salem Patel.
Salah Nooruddin – once a prominent employee at IIB and a Bahraini-based businessman with interests in real estate – became the latest addition to the board on April 26, taking on what GFH Capital described as a responsibility for “bringing new investors on board as part of GFH Capital’s strategy of building a successful and sustainable future for the club.”
The announcement of Nooruddin’s appointment came with no details about whether he had invested any cash in United or bought part of GFH Capital stake.
GFH Capital declined to comment on whether Nooruddin was now in possession of any shares, saying details of the exchange of equity were confidential.
GFH Capital’s plan of ownership at Elland Road involves selling parts of its stake to “co-investors” and establishing a consortium of shareholders.
The company has controlled Leeds United for the past four-and-a-half months after buying United’s parent company through LUFC Holdings Limited, an off-shore firm that is based in the Cayman Islands.
GFH Capital has faced persistent questions about its financial strength and its ability to fund United’s operations.
Gulf Finance House’s latest financial figures, covering the first quarter of 2013, spoke again of an intention to relinquish more shares, stating: “The group has an active plan to sell its controlling stake in LUFC Holdings Limited to co-investors.
“During the period, the group sold 13.33 per cent stake in the LUFC Holdings Company resulting in dilution of the group’s stake from 100 per cent to 86.67 per cent.”