I hope this doesn't upset Mark H too much - PRIVATE EYE No. 1187 22 June 5 July 2007 IN THE CITY LEEDS UNITED By Slicker The fate of Chairman Ken Batess bid to continue in control of the League 1 relegated club, backed by a trio of offshore entities whose generosity knows no bounds and no other recipient, may well be decided by the taxman. Revenue & Customs is the second largest creditor owed £6.87m in tax and VAT after Astor Investment Holdings, a British Virgin Islands-registered but Guernsey-managed company. Not surprisingly, the Revenue voted against the 1p-in-the-£ company voluntary arrangement (CVA) deal offered by Bates and supported by his offshore allies. The Revenue has to decide by the end of the month whether to challenge the vote in favour of the deal at the creditors meeting. The report from administrator KPMG states that Leeds had breached its agreement with the revenue by not making a £200,000 monthly payment in March this year. This future and a second non-payment in April triggered a winding-up petition from the taxman on 17 April. in late March, no doubt by complete coincidence and with no knowledge of any contacts taking place between the Leeds directors and the Revenue, Astor and another offshore lender Krato Trust demanded that Leeds provide security to Astor for its £12.7m loan or face liquidation. Why the supposed unconnected Nevis company Krato should not then insist that it too was given security was not explained. In any event, on 4 April Astor was made the only secured creditor. This enabled it to appoint KPMG exactly a month later, two weeks after the Revenue filed its petition. A good reason for the taxman to be unhappy. According to KPMG, which appears to have challenged nothing it was told by its appointer Astor, Krato or the Leeds main shareholder Forward Sport Fund, Astor is owned by five discretionary trusts with no named beneficiaries. Such arrangements usually refer to what are called purpose trusts. But such trusts usually have a letter of wishes which gives instructions to the trustees in this case seemingly Nerine Trust in Guernsey as to who they are to benefit. Such trusts also have a settlor or settlors and either a protector or custodian to see the trustees do as they are told. Did KPMG discover if there was a letter of wishes or who was the settlor/ protector/custodian and who, therefore, were the real beneficiaries? A similar opaque arrangement for many years was said to lie behind the Guernsey company Swan Management which controlled the largest shareholding in Chelsea when Bates was chairman. Swan was linked to Guernsey accountant Patrick Murrin, a one-time Chelsea director. Interestingly, Krato shares the same Nevis address as Rivoli a company linked with Murrin, a long-time associate of Bates. Murrin also features in the affairs of another Bates associate, South African but London-based Stanley Tollman. Tollman is currently fighting extradition to the US on tax and bank fraud charges in which Guernsey features. A decision on the case is due later this month. Tollman is in part hiding behind his elderly wifes fragile mental state as the reason he should not be sent to New York. The US inquiries into Tollman may have encouraged the Guernsey financial regulator to mount an investigation into Murrin which with Chelsea helped the decision to retire from the trustee company he ran. It now emerges that Rivoli had factored a debt due from Sheffield United paying a discounted amount up front and looking to make the collection. Rivoli was owed £625,000 when the Leeds music stopped. Murrin, like Astor, also had an interest in Forward Sport Fund which is registered in the Cayman Islands at the offices of leading local lawyers Maples & Calder, once the firm of Tory MP John Maples. The firms offices at Ugland House is home to thousands of companies. Earlier this month Ugland House featured in a hearing before the US senate finance committee which is examining tax evasion/avoidance by American companies. The Ugland House office building in the Cayman Islands has been the source of much debate on the senate floor over the past few years. Its time the finance committee found out what was really going on there, declared committee member Senator Chuck Grassley. The committee has asked the US government accountability office to go to the Caymans to try to find out. If it does, maybe it could tell the Football Association which supposedly regulates Leeds. Slicker
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