Bates in Leeds buy-out to end ownership saga

Leeds last night issued a statement saying Bates, the club’s chairman, had bought out the near 73 per cent stakeholding of off-shore company Forward Sports Fund (FSF).

Bates has bought control – for an undisclosed sum – through a company called Outro, which he wholly owns. Both Outro and FSF are based in the Caribbean tax haven of Nevis.

FSF is owned by three discretionary trusts with no public recognition of who the trusts’ owners are.

Leeds said no individual owned more than 10 per cent of any of those trusts, which meant they did not have to provide further details to the Football League and FA under their ownership disclosure rules.

But the apparent anonymity of Leeds’s ownership has become an increasing bone of contention and last month MPs running an inquiry into football governance questioned how the game could allow the situation to continue.

Leeds’s statement criticised MPs for “scaremongering” over the issue but Damian Collins, one of the members of the Commons committee running the inquiry, last night hit back and called the club’s claims “ridiculous”.

Collins, a Tory MP on the culture, media and sport committee carrying out the inquiry, said: “We asked legitimate questions – questions a lot of people have been asking – over who owns Leeds United. The fans of the club have a right to know and I don’t see how the Football Association or the Premier League can enforce their regulations on ownership without knowing who the investors in Leeds are.

“It’s ridiculous to call that scaremongering, they’re legitimate and reasonable questions. The fact that Leeds have moved to resolve the matter means we were right to be asking those questions.

“If our inquiry has had something to do with the new clarity of who owns Leeds then I am very pleased.

“I could not see how the FA could ensure there were no conflicts of interests or issues of dual ownership if they did not know who the principle investors were.”

The club statement said: “There has been much speculation in the media over the ownership structure of Leeds United and its compliance with the relevant regulations of the Football League and Football Association. The speculation has been further fuelled by the coverage of the Football Governance enquiry and the political obsession with the ownership of Leeds United.

“The scaremongering arising out of the football governance inquiry has not been helpful and, whilst the board were always confident that there were no issues, recognise the concern the unknown outcome of any Premier League questions may have on our members.

“To address this issue and in the hope that this brings an end to the speculation, the chairman, Ken Bates, has completed the purchase of FSF Limited for an undisclosed sum. FSF Limited is now owned by Outro Limited which is wholly owned by Ken Bates. This change in ownership structure makes Ken Bates the controlling shareholder of Leeds United and delivers the transparency sought.”

During evidence to the inquiry in March, Leeds chief executive Shaun Harvey told MPs the owners of the trusts behind FSF were unknown but that they had appointed two men, Patrick Murrin and Peter Boatman, to run the club who in turn asked Bates to be chairman.

Harvey said neither he, nor to his knowledge Bates, knew who the shareholders of the trusts were.

Last month, the FA admitted to the committee it also did not know the identities of the people behind the trusts. The Premier League added to the controversy when chief executive Richard Scudamore told the inquiry that Leeds would have to reveal the exact identity of the owners if the club won promotion from the Championship.

At the time, Bates insisted he had no problem with the Premier League’s requirements and the club did not anticipate having any problem meeting them. It is unclear whether Bates had already decided to bring the ownership issue to an end at that point and he was unavailable for comment last night.

Leeds are now unlikely to win promotion with Nottingham Forest in a strong position to take the final play-off sport, barring a defeat at Crystal Palace and a big win for Leeds at QPR in Saturday’s last round of Championship matches.

The involvement of FSF in Leeds’s affairs has been controversial ever since the offshore company and Bates retained control of the club when it slid into administration in 2007.

At the time, local MPs and creditors questioned why major offshore creditors, who effectively controlled the outcome of the administration process, were prepared to waive millions of pounds owed to ensure FSF retained control when other bids to buy the club might have delivered a greater return to creditors.

Bates denied any connection with the offshore creditors, which were registered in the Caribbean, and said FSF was favoured because it was the only bidder at the time prepared to cover running costs while Leeds remained in administration.