Source: Telegraph
Portsmouth owner Balram Chainrai faces HMRC probe into club's administration move
In a highly unusual move HMRC are questioning the validity of the voluntary administration declared by club owner Balram Chainrai last week. It is understood HMRC will challenge the legality of Chainrai's claim to control the club, which was secured under the terms of a mortgage agreed by the previous owner Ali al-Faraj. [LNB]The development means that a Premier League board meeting scheduled for Tuesday, that would have ratified a nine-point deduction for Portsmouth, has been postponed. The League will only remove the points once the legal position of the administration is clear. [LNB] Related ArticlesAdministrator vows to save PortsmouthPortsmouth crisis: timelineStorrie to resign as Portsmouth chief executiveHarry Redknapp: Portsmouth will bounce backHart: Portsmouth 'can be strong again'Football clubs in administrationHMRC's unexpected move appears to be a response to the position whereby Chainrai has ensured that he is at the head of the queue of creditors owed a total of £80 million. [LNB]The tax authorities, who are owed around £15 million, are understood to be deeply unhappy at the arrangement, which was created by Chainrai's decision to take the club into administration. [LNB]HMRC will seek to have the original administration overturned to create a level playing field for all creditors. [LNB]If HMRC succeed there is also a possibility that the winding-up proceedings could be reopened, raising the prospect of the club facing immediate liquidation. [LNB]It is also further evidence of HMRC's determination to pursue the club, who have repeatedly failed to meet their commitments to the public purse despite turning over around £70 million a year. [LNB]Portsmouth owe around £80 million, with former owner Sacha Gaydamak the largest single creditor owed around £32 million. [LNB]Chainrai stands to recover some or all of the £17 million he lent the club in January. HMRC meanwhile, who are owed more than £15 million in total, have no protection. [LNB]Sources with knowledge of the proceedings indicated that HMRC's primary concern was to ensure Chainrai did not receive preferential treatment. [LNB]'In these circumstances it is always UK Plc that ends up bearing the cost, so HMRC is taking steps to try and protect its interests and those of the taxpayer,' said the source. [LNB]'They are challenging the validity of the administration and making sure that it is properly constituted. HMRC's job is to try and ensure that there is a fair deal for all creditors rather than just a few.' [LNB]Andrew Andronikou, the administrator appointed by Chainrai, said he was uncertain of HMRC's motives. [LNB]'I don't understand the exact reason why this is, we're just following normal protocol. We're not unduly worried. We're expecting the administration to proceed as it was.'[LNB]HMRC's action could shed further light on the chain of ownership and allegiances at Portsmouth this season. Chainrai claims to have been introduced to the club by agent Pini Zahavi and his loan enabled the consortium notionally headed by Al Faraj to take control at Fratton Park. [LNB]They brought in lawyer Mark Jacob and also introduced convicted fraudster Daniel Azougy to help run the club, but within four months it was in administration. Following his involvement with Portsmouth Jacob has left the legal practice Fuglers where he was a partner. The firm has declined to comment on the circumstances of his departure, but Jacob said on Monday he had resigned. [LNB]The scope of West Ham's "ill-judged" spending over recent seasons has been been revealed in the club's latest accounts, which were published on Monday evening. [LNB]West Ham's decision to award injury-plagued striker Dean Ashton a new contract in December 2008 backfired, leaving them liable for a £5.81million payment when he was forced to retire in December. [LNB]Freddie Ljungberg and Kieron Dyer will have cost the club £34 million over the terms of their contracts, having only started a combined total of 32 matches for West Ham since the summer of 2007. [LNB]
