Life as a Swindon fan has never been dull! But even by our own standards the amount of off-field activity currently taking place is unprecedented. Unsurprisingly there’s a huge amount of concern from fans and a lack of clarity on what the future looks like for STFC. As a Trust we’re working tirelessly in the best interests of the club and wherever possible trying to keep supporters up to date on what’s going on. Many of you will be aware of the issues facing the club already but we felt it would be useful to summarise these in a single document. We’ve also set out the Trusts position and provided some insight into our recent and planned activities.
What is the background of the ownership court case?
The former professional footballer and agent Michael Standing is claiming that he purchased a 50% stake in Swinton Reds (the holding company of STFC) in 2013 for £800k. Lee Power is claiming that former England international Gareth Barry (and friend of Michael Standing) provided the money directly to Power. Barry denies this and says he lent the money to Standing. In 2019, Standing was granted an injunction preventing Power from selling the club or placing the club into administration. We believe that to date Michael Standing has put in c.£4.5m.
The initial court hearing to determine ownership was held in May 2020, the Judge presiding over the case said the following:
Mr Power does not deny that there was another person involved in the acquisition but, extraordinarily, he says that it was not Mr Standing but his very good friend, the well-known England international footballer, Mr Gareth Barry.
Mr Power disputes that Mr Standing and/or Mr Barry have a 50% interest in the club, but he does accept that Mr Barry has certain contractual rights.
Mr Power says that there was a meeting in March 2013 at Mr Barry’s house, attended by him and Mr Standing. At that meeting, Mr Power says he reached an oral agreement with Mr Barry in the following terms:
- Mr Barry would be allowed to invest in the acquisition of the club and, to that end, Mr Barry, through a corporate vehicle, would provide the initial £800,000 required, with the same split of £300,000 for the shares and £500,000 as working capital.
- Mr Barry would not own any shares in the club, whether directly or indirectly, but he would be entitled to 50% of the profits arising from any increase in value of the club, including 50% of net profits arising from sales of certain players.
- Mr Barry and Mr Power would fund 50/50 any ongoing working capital requirements of the club. They would also have equal responsibility for discharging a debenture over the club’s assets held by Mr Andrew Black, a former owner of the club, in the sum of £2m in the event of a sale of the club.
The reason why there had to be confidentiality about the beneficial interest, if there was one, or the fact of Mr Standing’s or Mr Barry’s involvement, was because of the Football Association’s rules concerning the ownership of football clubs.
Mr Standing has an interest in a company called First Touch Professional Management Ltd (FTPM), which is involved in the football agency business. Its main client is Mr Barry. The FA’s regulations are now contained in the FA Regulations on Working with Intermediaries and they prohibit football intermediaries/agents from owning or having interests in football clubs. Mr Barry remains as a professional footballer, currently playing for West Bromwich Albion FC, and he too was unable to hold shares in any football club.
Since that hearing, there have been two key changes:
- The Trust have learnt that Andrew Black has sold the debenture to Lee Power, we do not know how much was paid but we do know it was significantly less than the £2m debenture.
- Michael Standing resigned as a Director of First Touch Professional Management Ltd (FTPM) on the 13th April 2021
What charges have the FA brought?
Following the hearing on 7th April, the FA charged STFC, Lee Power, FTPM & Michael Standing with breaches of FA Regulations on Working with Intermediaries which prevent any player or agent having an interest in a club.
The FA released the following statement: “It is alleged that Swindon Town FC, Lee Power, First Touch Pro Management and Michael Standing breached Intermediary Regulations in relation to the ownership and/or funding of Swindon Town FC. Swindon Town FC, Lee Power, First Touch Pro Management and Michael Standing have until April 22, 2021 to provide responses to their respective charges.”
To date no party has commented on the charges and if found guilty Lee Power and Michael Standing could face both bans and fines. It is not clear if the club itself will face any punishment, but this is clearly a concern. The Trust have written to the FA calling on them to direct any punishment to the owners/individuals should they be found guilty, not the club. This letter had the support of both Swindon MPs, Robert Buckland (also Lord Chancellor and Secretary of State for Justice), and Justin Tomlinson (Minister for Disabled People, Health and Work).(Trust Letter to the FA)
What is Lee Power’s position?
In an interview with BBC Wiltshire radio in February Lee Power claimed the club were “on the brink” of bankruptcy. Following this announcement the Trust issued an open letter (Trust Open Letter) calling for transparency and communication from all parties related to the ownership of the club. Unfortunately, we did not receive any meaningful response from the club relating to club finances.
This week (14/04)Lee Power applied for a variation to the injunction brought by Michael Standing preventing him from selling the club of placing it into Administration. The hearing was attended by representatives of Lee Power, Michael Standing and Clem Morfuni and it was revealed that Lee Power wished to sell the club to US firm Able (for £1) or place the club in administration. In an attempt to try and prevent administration, the Trust provided a witness statement via Clem Morfuni’s legal team regarding the viable alternative to the current ownership (see Clem Morfuni’s position below).
The judge presiding deferred the decision on the basis there are sufficient funds to meet the next monthly wage bill (c.£250k) via an EFL grant. The date of the new hearing is not yet known but is expected to be before the end of April.
Why did the Trust provide a witness statement?
The Trust has always operated on the basis that we are agnostic of ownership. However, this principal is on the understanding that the current (or prospective) owner is acting in the best interests of the club. Placing the club in Administration when there is a viable alternative is clearly in conflict with this principle, therefore, we felt we had no alternative but to act.
As a result of providing the witness statement and our support for Clem Morfuni we were informed by the CEO of STFC (Steve Anderson) that the club are severing all communications with the Trust.
What do you know about the US Company Able?
Despite our best efforts the honest answer is not a lot. We believe they are a Boston based developer that were registered in February 2019 and that William Keravuori is the sole Director. However, Mr Keravuori appears to have links to at least 38 other companies.
Due to the lack of information regarding this company and the absence of a response to our open letter or any responses via other avenues of enquiry we are not currently in a position to support their possible purchase of STFC.
What is Clem Morfuni’s position?
Clem Morfuni owns a 15% shareholding in STFC via Seebeck 87 and Swinton Reds (the shell companies that own STFC) and has made a bid to buy the club which was not accepted by Lee Power. Clem Morfuni is the only interested party to reply to our open letter where he sets out his vision for the club, his response can be found here (Clem Morfuni Vision). Clem Morfuni also attended our April Board meeting where he fielded a number of questions regarding his plans for STFC should he become the owner. This level of engagement and transparency is welcomed by the Trust and is the basis and due diligence that we have carried out on his business on which we felt comfortable supporting him through the witness statement.
What happens if the club goes into Administration?
Administration removes the immediate threat of a winding-up petition which would put the club into liquidation and out of legal existence. The administrators become the agents of the company and handle the day-to-day running of the club. They ensure the club’s survival in the short-term alongside putting in plans for the club to exit administration.
Should STFC enter administration the EFL will impose a 12-point deduction that will come into effect from next season. The club has previously been placed into Administration on 2 separate occasions however, there is no EFL rule in respect to a club entering into Administration for a 3rd time.
Who owns the land on the Highworth site?
The land on the Sevenoaks site in Highworth was purchased in 2016 for £1.3m and is registered in Lee Powers personal name. However, Michael Standing has a 50% claim on the land and it cannot be sold without his consent. The planning permission is held under STFC but this is largely irrelevant, as the land owner Lee Power can implement the housing development or sell with the benefit of the planning permission (subject to Michael Standings consent).
Other events of note
There have been two club sponsors that have publicly announced they will not be renewing their sponsorship next season; Verelogic and The National Self Build & Renovation Centre (NSBRC). The NSBRC Tweeted the following “It is genuine disappointment that we confirm we will not be renewing our sponsorship of #STFC next season. We have expressed our concerns around the lack of vision, communication and transparency. We encourage fans to follow @TrustSTFC and @STFCSupClub This is our club.”
This is an independent decision by the sponsors, but it demonstrates that like ourselves and many supporters there is a lot of unhappiness around how the club is being run. We would encourage these sponsors to return to STFC once the ownership position is rectified satisfactorily.
What happens next?
The Trust will continue to do all it can in the best interests of STFC, including trying to prevent Administration by supporting Clem Morfuni, or any other viable future owner (who meets our due diligence tests and sets out a positive plan and vision for the Club and commitment to openness and transparency to supporters and the local community) and calling on the football authorities to punish the individuals found guilty of any wrong doing rather than the club.
It’s a worrying time for supporters but we have been in existence since 1879 and we are confident that if we stand together we can not only survive but look forward to a brighter future.