To fans sceptical of those of us whom distrust the 80% owners

A few points;

1. I'd agree that rent costs, eg the £150,000 for use of the ground, would be justified as an expense from club funds. We're not talking about this, we're talking ownership. Billionaires paying to buy an asset with money that the asset generated.

2. I fully appreciate that this happens all the time in business and is fully legal. But this is football. And when £750,000 has gone missing that could've delivered whatever the 'remedial' measures are to keep loyal fans of half a century in their seats (if we give benefit of the doubt that club rationale for closing West Stand is reliable) they have let fans down by siphoning funds.

3. The lies. The club statement on the 18th of August 2020 in the same breath states that 'the club' paid the Crynes £750k, but states the owners 'have not taken £1 out of the club'. They have. They've paid (only part) of what they owe to hold ownership by taking money out of the club. They've increased their wealth using monies belonging to the club.

Say you sell your penny jar to a kid for £5, on the proviso the kid will pay you an extra £2 in a years time. The kid promises to look after the penny jar and not take from it until it's sold on. The hour comes and you get 50p, but in pennies. The kid swears they've taken nowt out the penny jar though. That's what's happened.

 

Two things are unclear to me here.

1) Is the sale of the club regarded as completed and the amount outstanding to the Crynes simply a debt as between them and the "80% Mob"?

2) If the answer to 1) is "yes", are the 80% Mob not the beneficial owners of the club and it's assets? If so, then "the club's money" is surely their money meaning they are entitled to use it to pay some of the outstanding payments?

 

Billionaire – snake oil salesman, spiv, swivel eyed-chancer, leech, liar, cheat. Easily identified by lack of integrity, ethics, morality and money.

 

The Hong Kong investment company will have a share certificate for 80% of the shares. They currently own those shares, regardless of the legal dispute surrounding the payment for them. Company sales quite often involve an earn-out to the previous shareholders, where they would continue to receive payments in later years contingent on the performance of the company, but any disputes regarding this won't change the ownership situation with regard to the shares, as the share certificate is the legal document that confers ownership.

In answer to 2, the Hong Kong company is the majority shareholder, but any dividend payment for a class of shares has to be made to all equivalent shares in that class. Oakwell Holdings would receive a dividend related to their shareholding, if one was declared. Additionally, company directors have a fiduciary duty to act in the best interests of the company, specifically Barnsley Football Club Limited in this case. I'll let you draw your own conclusions about whether allowing payment of a £750k liability on behalf of another company to a 3rd party, and then writing off the recovery of those monies from that company is in the best interests of the UK registered company.

 

Barnsley Football Club is a limited company. The shareholders own the company through their ownership of the company's share capital. Those shares can be traded, but Barnsley Fc is not a company that is quoted on any stock exchange so the process of trading shares is not a straight forward one, but what I am trying to illustrate is that the company is totally separate in law from those who own its shares.

Shareholders commonly take a cut of company profits through a share dividend awarded to all shareholder at an equal rate based upon the number of shares they own. A dividend is taxable income in the hands of a recipient. If a shareholder is also an officer of the company eg CEO, then he will take a salary based on his duties and responsibilities, but approval of the rate of pay should be subject to a resolution at the Annual General Meeting of all shareholders, and there are legal frameworks that allow a minority shareholder to challenge the power of the majority to pass unfair resolutions at AGMs. This payment should have been paid by those who purchased the shares of the company from the Cryne family as part of the deferred agreed price. It has absolutely nothing to do with the company (Barnsley FC Ltd), and the inland Revenue will disallow the payment when they are calculating Corporation Tax liability for Barnsley FC (not that there will ever be a profit). Furthermore, the Inland Revenue will regard the payment as a payment to the 80% and not to the Cryne family, because it is the 80% group that are deriving benefit (through the reduction in the amount of their debt on purchase of the company) and not the Cryne family, who will have already declared the sale proceeds of the club to the Inland Revenue. The 80% group will be required to pay tax on the sum as though it was a dividend, a dividend that paid nothing to the 20% holder of shares.

I have been anxious to give the new owners a chance. Until this point, they have taken nothing out of Barnsley FC, and I have had no complaints about the way that they have run the company (Barnsley Football Club Ltd), but this was wrong on many levels and I truly hope that they are brought to book for it.

 

For the casual observer, that's about as good an indictment as to the nature of the payment as you're likely to get. For Red Rain to reach this conclusion, as someone who has consistently argued for patience regarding the owners and their motives, demonstrates how indefensible it is in terms of being in the best interests of the football club.

 

Why didn't you say this at the time? Bloody hell. I'm so annoyed with you right now.

I highlighted this point again and again and you didn't speak up even though you have so much knowledge on it. You've stepped up now but you should have done when this came out. Chuffing chuff.

 

Welcome back. Good to see you posting again.

 

Sorry!

I did see it, and I reached the above conclusion immediately, but I thought surely not..... after all, they have behaved themselves up until now. Let me give them time to see if a credible explanation reveals itself. Well, it hasn't and the legal action by the Crynes convinces me that there is no other explanation.

As I say... sorry.

 

As less than a layman, are we saying that the club is doing something which will land it in trouble with the taxman?

 

The tax man will be watching with interest. If the Crynes win their case, and the 80%ers repay the money to the club, then nothing has happened to worry the taxman. If that does not happen, then the taxman has a list of targets, but the 80%ers will be top of that list.

 

I haven't really got the gist if this now. A bottle of red wine probably hasn't helped, but I no longer know if the club has just not paid the Crynes for the club as agreed or they've stiffed them out of some dividends as well.
I know it's the international break and there's no minority report, so if you get chance to do a summary for the less financially experienced fans (or even just for me) I'd greatly appreciate it.

 

Your opinion is extremely valid, the final paragraph in your previous post is what will resonate with a lot of people; you don't slag the club off, so when you do, it means something. But it's that middle paragraph that matters. An explanation that I couldn't give, through lack of expertise, of why what happened is so wrong.

In the scheme of things it doesn't matter, I shouldn't have tried to provoke an apology. However, I do believe that we all flourish by knowledge shared. I would encourage everyone to share what they know, it empowers people and prevents the privileged from taking advantage.

I applaud you for writing this now and would encourage everyone to read and digest it. It's complicated, I find it difficult, but it's worth the effort to try to understand the position we're in and the decisions being made.

 

Just to provide some clarity on this.

Barnsley Football Club Limited is 100% owned by Hong Kong listed BFC investments. From the information in Oakwell Holdings accounts the ownership for the Cryne family is through a 20% ownership of BFC investments held within Oakwell Holdings.

So any payment to BFC investments is not at the detriment of the minority shareholder as they are a minority shareholder in BFC investments.

 

A transfer of ownership of a limited company (Barnsley Football Club Ltd) has got nothing to do with the limited company. It is simply the commodity that is being traded via the sale of its share capital. Because it is the subject of the sale, it cannot be asked to also pay for itself ( or at least part of the selling price). Although Barnsley Football Club is not a company that is quoted on the stock exchange, that is the nearest analogy. Quoted companies are expressly forbidden from purchasing their own shares (except under special resolution and for a specified number). But the thing that you should remember beyond all others is that a company is a separate legal entity from its shareholders, and because of that, a group of shareholders are not allowed to treat company assets as their own.

 

You are right, and I had forgotten. It adds another level of complication to the whole issue. The legal bills are going to be enormous.

 

Again, sorry, this makes it seem like your previous post is invalid. I am just trying to understand.

Are the 80% owners doing anything that puts them or the club at risk of being targeted by HMRC or legislators?

 

Do we know when this is going to be heard in court?

 

I'm afraid I can answer no more strongly at this stage than, "possibly".

 

I'm going to have to read this whole thread again tomorrow. I'll probably have to draw myself a diagram to help me to get my head round it.

For now, though, it's enough to know that something's distinctly off.