On Wednesday afternoon Steve Clarke, Andy Buckland and Nigel Kleinfeld from CAST met with Charlton CEO Matt Southall, Chief Financial Officer Sean McHugh, PR Advisor Paul McCarthy and Southall’s legal advisor to discuss the alarming events that have come to light in the last few days.
Only weeks after learning of the takeover of Charlton Athletic - an event which caused much celebration that we were no longer owned by someone who had little interest in the club - it is abundantly clear that matters already appear to be in turmoil.
The very future of our club is in jeopardy.
Below we report the details as told to us at the meeting, the headlines of which are:
- The two shareholders in the Club are involved in a seemingly irreconcilable dispute.
- East Street Investments has yet to provide the EFL with satisfactory proof of source and sufficiency of funds, a confirmation letter from the bank involved and evidence of where the money has come from.
- Several EFL deadlines have been missed.
- As a result, Charlton since January 8th have been under a player registration embargo.
- Tahnoon Nimer has allegedly made no funds available to date.
- Following his suspension, Chris Parkes has been reinstated.
We are left extremely concerned the future of the club is going to be determined by an acrimonious legal battle, the resolution of which seems a long time away.
We began the meeting by making clear that, in the midst of this dispute, our only interest is ensuring a stable and prosperous Charlton Athletic. We also made clear that requests for similar meetings have been made to Tahnoon Nimer and the EFL. At the time of writing no response has been received to these invitations.
This article reports the answers given to the questions we raised.
We began by asking Southall to detail the timeline of events that led us to the situation we are in today.
He said that on 2nd January the takeover was completed as he, Jonathan Heller and Tahnoon Nimer had passed the EFL Owners’ and Directors’ Test.It is important to note this does not complete the EFL ratification process as further information on the source and sufficiency of funds is required by the EFL before they sanction the club to proceed unencumbered under new ownership.
Southall told us in the early part of January he was in the process of negotiating a major transfer that would involve significant investment in terms of the fee and also the player’s wages. Whilst this was in progress he was informed of a letter from EFL stating Charlton was under a player registration embargo, due to the missed deadlines in terms of providing the financial information.
The basis of the embargo is that any transfer dealings are only possible if the net cost to the club is lower than the current figures taking into account any outgoing players, i.e. not increasing the overall cost.
He said that, parallel to this, the first £5m tranche of club funding expected from Nimer had not been received and remains unpaid.
Southall said he discussed the situation with Nimer’s UK representatives and travelled to the Middle East to discuss this face to face. There was no resolution. Nimer attended the Barnsley game on February 1st, accompanied by Claudiu Florica from Romania, who he wanted to install as the CEO. We were shown a letter from Nimer to senior CAFC staff informing them that Florica had been appointed as CEO to replace Southall. Nothing further has happened with this and it seems that it will be the subject of further legal wrangling.
When asked about the Club’s financial future, Southall said that there will be sufficient funds to run until Christmas 2020 even if Nimer provides no funding. He said this comes, in the short term, from monies left by Duchatelet, the January EFL payment and instalments from previously transferred players, (e.g. Joe Gomez). In the medium term he estimates that funding from gate receipts and payments from the EFL will be enough to reach December. He added that there may also be further instalments from previous transfers. We confess that we find it hard to share this optimism, especially if Championship status is not maintained.
When asked what happens if Nimer no longer provides funds, Southall stated he was aware of multiple investors who were keen to be involved. We challenged this, reminding him how difficult it was for Roland Duchatelet to find a buyer. He said that he remains confident that investors are out there. He emphasised it is important anyone doing so is credible, enthusiastic and has sufficient funding. He accepts that, when setting up the original deal he believed Nimer satisfied those criteria, although his view is now that this is not the case. He said he is nevertheless confident that, if and when new backing is required, this can be resolved satisfactorily. Given the fact that the EFL will require proof before the start of next season that sufficient funds for the whole of the season are secured, we remain sceptical and alarmed about this. We are thus in considerable doubt about whether Southall is in a position to secure the future of our club.
It is clear from the publicity across social media this week the figures shown for senior Club officials’ remuneration is considered by many fans to be excessive, especially at such an early stage. We asked Southall for his comments on this. Initially, he argued that his salary, which is in accordance with his employment contract, whilst very high by general standards, is actually at the lower end of the scale of equivalent positions within English football, particularly in the Championship. He said his salary was benchmarked prior to the contract being offered. One of the most sensitive areas has been the amount being paid for accommodation. He argued that this is effectively a corporate apartment available for use by senior Club officials, including Nimer when staying in London. Southall stated that his family home is in Manchester and his use of this apartment is restricted to when he is working at Charlton. We note that, realistically, this is likely to be most of the time and we take the view that it would have been more appropriate to secure more moderately priced accommodation.
Southall said he is very concerned that the details of the address were made public on social media earlier in the week, putting his family and himself at risk. It is Southall’s view doing this is trying to put pressure on him to resign. He reiterated this is not going to happen.
He said that some of the figures shown in the recently publicised document of expenses paid to various individuals regarding Charlton Athletic are for consultancy work carried out prior to his appointment as Executive Chairman. He said that, even though the work took place earlier, they are shown in the January accounts due to the normal timeframe of invoicing and settlement. He said these amounts had previously been agreed by Nimer’s advisors - long before the actual takeover took place.
There was considerable discussion regarding the position of the Club’s property assets, in particular the Valley and the Training Ground. Our understanding prior to the meeting was there was a six month time scale by which time the purchase of the property-owning company Charlton Athletic Holdings Ltd needed to be made from Staprix. We expressed our concerns that, in the current circumstances, it seems likely these deadlines will not be able to be met. It was explained that while that is the basis of the contract, there is an extension clause which can be triggered if necessary. The expression used was “it is not a cliff edge”.
Bearing in mind the current financial difficulties, Southall made clear his focus is on making the club financially sustainable. If this means that the extension needs to be triggered then his view is that this is the most practical way of dealing with the situation. He reiterated that to him the sustainable future of the football side is the most critical.
There has been disagreement regarding Nimer’s position on the Club board. Southall stated that, having taken legal advice, his view is that Nimer has resigned. This is based on social media posts from Monday of this week where Nimer said “I’m out”, and that he would no longer be providing funding. He said that remaining board members took this as a clear unequivocal message of his resignation from the board, which they have the right to take at face value. We take the view that this will be legally challenged.
Southall said that he and his colleagues regretted that, in a statement they released on Monday, the term “disadvantageous contracts” may have been interpreted as including the new contract given to team manager Lee Bowyer. He wants to make very clear he regrets this was presented in this way as this was never the intention. He wants to be sure there is no further misunderstanding on this point.
We also discussed the issues this week regarding Club Secretary, Chris Parkes. Southall said that allegations of a serious nature had been made against Chris. Therefore, based on the Club’s Human Resources disciplinary code, the club had to suspend Chris, pending the result of an investigation. Southall said that this investigation has now taken place and Chris has been fully exonerated. He will be at work at the Club on Thursday morning.
In summary, the situation at our club is extremely alarming. We have the two most critical individuals at loggerheads and currently no sign of any solution short of a court of law. We find it hard to have confidence that Southall has sufficient time or resources to secure the future of the club.
We were given extensive time by Matt Southall and his team today at which a great deal was debated and we hope that Tahnoon Nimer and the EFL will be prepared to do the same.