Blackpool Tower of Chicanery Illuminated

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An interesting piece from the Guardian on the monstrous Oystons, taken down in the High Court and given a legal, reputational, and financial shoeing.......and on the limits to and limitations of the "fit and proper persons" test

 

(I know, I know, the Oystons actually had no reputations to decry.)

 

Blackpool’s demise makes a mockery of football’s fit and proper persons test

 

David Conn

 

The Oystons’ stewardship of the club has left so much to be desired and the idea the Football League is powerless because of an outdated rule must be addressed

 

 

Tuesday 7 November 2017 18.46 GMT Last modified on Tuesday 7 November 2017 22.00 GMT

 

After the devastating, 163-page ruling of a high court judge that Owen Oyston and his son Karl, the owners of Blackpool football club, “illegitimately stripped” the club of £26.77m and operated “with great prejudice” to it, where to start with the implications? Perhaps, for a moment, by putting to one side the damning assessments themselves – that “the Oyston side enriched itself, prejudiced Blackpool FC and behaved in a discriminatory manner towards the other members of the club” – and the grave question of what happens next to Blackpool now the Oystons have to pay £31.27m to the 20% shareholder Valeri Belokon whom they “unfairly prejudiced”.

 

Consider, more broadly, the significance of this case for all of England’s football clubs and their supporters, and the inadequacy it highlights of the rules including the much-derided fit and proper persons test for owners and directors, which are intended to protect them.

 

The Football League is consulting its clubs on whether to improve the rule, to help actually secure fit and proper conduct by directors, so this monumental defeat for the Oystons is very timely to concentrate minds. It illustrates with great clarity that the current rule is nowhere near effective enough, and is something of a sham.

 

Supporters of Blackpool have discovered this in adversity, as have fans of other historic, beloved clubs suddenly plunged into crises of bad stewardship. The rule, in essence, provides that people cannot be directors, or own a stake of 30% or above in a club, if they have a criminal conviction for an offence involving dishonesty. Owen Oyston, 83, the long-term owner of Blackpool, does have a conviction, for rape, an offence which will never be “spent” in law due to his sentence of six years’ imprisonment, but it predated the introduction of the fit and proper persons test in 2004. Any offences committed before that time were not taken into account when the rule was introduced.

 

The second key provision which disqualifies an owner or director is to have been involved in the insolvency of two clubs. Again, any insolvency before 2004 is not taken into account.

 

The league argues the rule has kept some unsavoury people out, and it did make strenuous efforts to enforce the ban on Massimo Cellino after the then Leeds United owner was convicted of evading tax due on his yacht in Sardinia.

 

 

But repeatedly, when supporters have pleaded with the leagues or the Football Association to prevent harm done by damaging owners, the authorities have pointed to their own rules, which they passed, and shrugged that they are powerless. Blackpool’s has become one of the most toxic misfortunes of all: the Oystons helped themselves to many millions of pounds after that one season in the Premier League in 2010‑11, including the famous £11m payment they declared as a “salary”; the club sank to League Two, supporters are boycotting matches and the owners have sued some for painful amounts of money after accusations made on web forums.

 

Then, on Monday, in a functional room in the modern-court block next to the grand Rolls building in the heart of legal London, Owen and Karl Oyston met what looks like the nemesis of their careers. The parties were shown the judgment in draft beforehand and the Oystons did not show up. Fifty-three Blackpool supporters did and they applauded Belokon, the Latvian banker, and his advisers, who had not been prepared to put up with the Oystons’ extraction of money from the club over their heads. Unfair-prejudice claims are difficult to win, and this forthright ruling requiring the Oystons to pay Belokon £31.27m – the £26.77m they took out plus £4.5m for his shares – is a staggering blow.

 

The judge, Justice Marcus Smith, who gave the impression of being a clerical, forensic brand of lawyer rather than a grandstander, reached unequivocal conclusions after examining how the Oystons had operated. Owen Oyston began moves to extract large amounts of money from Blackpool FC immediately after the club was promoted to the Premier League, while the football world was still waxing sentimental about Stanley Matthews, Jimmy Armfield, tangerine shirts and Blackpool tower. Oyston saved the club in the 1990s, put money in – the judgment puts his outstanding loans before promotion at £5.9m, Belokon’s, whose investment was crucial, at £6.6m – and rebuilt the ground from a near-ruin which had two sides blocked off on safety grounds. But once the Premier League TV millions started pouring in, they came up with ways to pay £26.77m to Oyston companies, without consulting Belokon and despite his objections.

 

Crucially, Smith found of the Oystons’ conduct as directors: “It is clear that there were fundamental breaches of duties owed to Blackpool FC.” Reciting the law, he said these duties were: to exercise their powers “for a proper purpose”; “to promote the success of the company for the benefit of its members as a whole”; to “exercise reasonable care, skill and diligence”; and to avoid conflicts of interest.

 

The Oystons made huge payments out of the club “without conscious thought about whether they were proper or not”; and made decisions, to take so much money, “of the greatest significance to the club, and of the greatest prejudice to it”.

 

Yet directors of football clubs can do all this, commit “fundamental breaches” of their basic duties as directors, but still be “fit and proper” to be directors. At some point, those in charge finally have to realise that this no longer makes any sense.

 

https://www.theguardian.com/football/blog/2017/nov/07/blackpool-fit-and-proper-persons-test-football-league