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Ken Bates's life has always been clouded in mystery. From the moment he paid £1 for Chelsea in 1981 he appears to have broken just about every rule in the book. His association with bankrupt companies and his brash and aggressive exterior have always raised questions. But it worked for Chelsea, who went from bankrupt no-hoper's to real winners, winning the FA Cup twice, European honours and Champions League qualification. All of that was prior to Roman Abramovich's takeover and investment of over £100 million on playing staff alone. At that time Bates was however, struggling to tame the club's debts, believed to be in the region of £80m. The takeover secured Chelsea's long-term future. Without him, many believe Chelsea may well have been in the same position as Leeds United and indeed Sheffield Wednesday. Chelsea fans will tell you though that 21 years after walking through the door at Stamford Bridge, Bates changed the club beyond recognition. So can the 72 year-old do it again ? Take a look at Bates's past with the help of Tom Bower author of Broken Dreams: Vanity, Greed and the Souring of British Football Ken Bates was born on 4th December 1941. 2 Months later his mother died. Abandoned by his father, he was cared for in a W. London council flat by step-grandparents. In his late teens he worked with his father in a quarry business near Manchester Aged 22 he married Theresa, the daughter of a wealthy Irish squire (Bates buys his first Bentley) The quarry prospered and began to supply ready-mix concrete to an ever expanding construction industry. Bates ran the company. 28th January 1965: Bates launches Howarth on the Manchester Stock Exchange. Howarth is a construction and property development company based in Burnley. Also in 1965 he becomes chairman of Oldham Athletic. 1966 A member of Oldhams' board resigns saying, Bates believes in a committee of two, with one absent 1966 bates begins a building project in the British Virgin Islands. It involves the reclamation of several acres of land and a small island called Anegada. The British Foreign Office supports the project. 1967 Howarth is in trouble. At the shareholders meeting Bates say we have put the worst of the troubles behind us. I am not getting out. July 1968. Some of the bankers who helped Bates finance the British Virgin Islands project refuse to work with him; citing his appalling manners. At this time Bates admits to the Financial Times that he earned his money by breaking the rules. Bates, his wife, and now 5 children move to the British Virgin Islands. Bates resigns as a Director of Howarth and as Chairman of Oldham Athletic. Vice-Chairman, Harry Massey says, Bates was too ambitious, too quickly. His pace was too fast. 24th July 1969. Howarth reveals debts of £1.8 million and calls in the receiver. 1969. After 1 year of the British Virgin Islands project locals complained of Bates's vulgar behaviour, especially local female politicians. After a local town flooded, allegedly as a direct result of the land reclamation, locals threatened violence against Bates's cavalier attitude. 1970. Concerned about Bates's continued presence in the area and the level of civil unrest, the British Government intervened. Bates says he wants $10 million to go or I'll get mean. 21st April 1974. Bates accepts $5.8 million from the British Government to leave the island. It's grossly unfair, says Bates who pays all the creditors, but fails to earn his anticipated fortune. Bates moves to Dublin, Ireland and now opens his own bank Irish Trust Bank. The bank is focused on small savers in Ireland and attracts 1,400 savers in it's first year of operation (including George Best and Bobby Charlton) 1971. Bates's bank advances a large sum to International Trust Group which also, curiously, owns 20 per cent of the bank itself. 17th April 1972. Following concerns from the Irish Central Bank, Bates resigns as a director to be replaced by Freddie Pye (a former wrestler, scrap merchant and Chairman of Stockport County.) Pye metals immediately secures a loan of £200,000 from the bank. 1974. Bates meets John Papi, a Kuwaiti, employed by Stoy Ayward as an insolvency expert. Acting on advice from Papi, Bates took over Kemp Directories for £1 (earned Bates over £1 million) and Owen Press also for £1. 1975. Irish Trust Bank is in difficulties. The Irish Central Bank cites too many loans to anonymous offshore entities. These loans were not being repaid. Bates, even though he is not officially a shareholder or Director fights a court action to revoke the bank's license. 23rd March 1976. Bates and 2 other men (described as heavies) walk onto the bank's premises and seize documents. A warrant is issued for Bates arrest. The judge orders Bates to return the papers and grants the application to close down the Irish Trust Bank. 1977. Across Ireland many small savers are faced with loss of life savings. The Irish Government intervenes, during election year, and promises to repay all the lost savings in full. The investigation could never prove that any loan was made either directly to Bates, or any company Bates was directly associated with. There were however some remarkable coincidences. Bates emerged from the seventies with about £5 million. Much from the advice of John Papi. Bates then grew his hair long and moved to Australia. November 1981. Bates resurfaces in London and meets with John Papi who informs him that he can have Chelsea Football Club for £1. Acting on this advice, Bates buys Chelsea. Though, interestingly, when submitting his ownership of this and at least one other company submits an incorrect date-of-birth. Without sufficient cash Bates makes a massive mistake and does not buy the second company which owns the stadium and surrounding land. Instead, the freehold is sold to Marler, a property development company and the club are given notice to leave the stadium in 1989. The eighties are not great times for either Bates or Chelsea. Fighting for control of the ground and Chelsea's problem with a hooligan element dominated the eighties. In response to this hooligan problem Bates applies for permission to erect an electric fence which is rejected by the local council. 1991. Bates and Chelsea are saved as Marler are insolvent. The freehold is now with The Royal Bank of Scotland who grant Bates a 20 year lease with 'Option to Buy'. 1992. Chelsea announce further losses and a widening deficit. They are unable to pay many creditors, including a £1.75 million unsecured loan with The Royal Bank of Scotland. Technically, Chelsea are playing football while insolvent, an infringement of FA regulations. Again, acting on advice from John Papi, who notices a mistake in the player's contracts issued by the FA. They are in the name of 'Chelsea Football Club' rather than the 'Chelsea Football and Athletic Club'. Papi creates 2 new companies Chelsea Village Ltd and CFAC, Ltd and on 14th August 1992 assets of Chelsea Football and Athletic Club are transferred to the new legal entity CFAC, Ltd. Chelsea Football and Athletic Club was then renamed CFAC, Ltd to protect the name 'Chelsea Football Club'. Next all of CFAC's assets were transferred to Chelsea Village Ltd. Everything was now set for CFAC to be placed in receivership. Also around this time Papi also transferred Chelsea's players, worth £7 million, from CFAC to Chelsea Village (whose shareholders were anonymous offshore trusts). This transaction was criticised by Touche Ross as unlawful. To complete the process, season ticket sales were not deposited with the old company CFAC. June 1992. Papi transfers £620,000 to Chelsea Village leaving debts of £418,000 in CFAC. Maybanks (Chelsea's printers), unaware of these transactions issued a formal winding-up order of CFAC. May 1993. As Chelsea Village was also the largest creditor of CFAC, John Papi was also appointed as the receiver. He announces that CFAC had no option but to cease trading. Creditors were outraged that the liquidator had favoured Bates and in late 1993, at the request of the creditors, Bates was investigated by the FA. Bates wins a High Court judgment to cease the investigation. Bates has to guarantee to repay the creditors. Unsatisfied by the failures of John Hollins, Bobby Campbell, Ian Porterfield and David Webb to transform the fortunes of the club, Bates appointed Glenn Hoddle as manager in 1993 and a mediocre Premiership club began ascending the table. 1994. John Papi's license is withdrawn and 4 years later he is jailed for cheating the Inland Revenue. Hoddle's Chelsea reached the FA Cup final in 1994 and further success, funded by Matthew Harding's cash, followed under Ruud Gullit and Gianluca Vialli. Bates's marriage to wife Theresa collapses after he is discovered to be having an affair with Pam a model. Chelsea won the FA Cup in 1997 and 2000 and the European Cup Winners' Cup in 1998 and reached the semi-finals the following year. The sudden sackings of Gullit in 1998 and Vialli, the club's most successful manager, in 2000 showed that despite his advancing years Bates had not lost his ruthlessness. The Chelsea chairman, though, was struggling to tame the club's debts, believed to be in the region of £80m. From nowhere came one of the richest men in the world - Roman Abramovich's. His takeover ensured secured the long-term future. Without him, many believe Chelsea may well have been in the same position as Leeds United and indeed Sheffield Wednesday. Bates received a reported £17m for his original £1 investment. Cheers Paul _______________________________________________ the Leeds List is an unmoderated mailing list and the list administrators accept no liability for the personal views and opinions of contributors. Leedslist mailing list Leedslist@list.zetnet.co.uk http://list.zetnet.co.uk/mailman/listinfo/leedslist Join The Leeds United Supporters Trust at www.lufctrust.org
