Premier League and Championship club supporters made representations to the fan-led review panel last week. On Tuesday this week a number of League One and Two Supporters' Trusts and fan groups had the opportunity as a group to feed in their experience and evidence to the panel. CAST did not contribute to this session as we have an individual session with the panel next week and we have already made a written submission (see below)
This is how fans from Cheltenham, Leyton Orient, Accrington, Northampton, Plymouth and Grimsby described what they said to the panel:
This is the written submission that CAST made to the panel. (It was requested that we limit our evidence to one side of A4 paper) :
"The very existence of Charlton Athletic was put in doubt in January 2020. This came about as a direct consequence of the EFL, a members’ organisation also acting in the role of governing body, having totally inadequate rules to enable it to ensure that the club could not fall into the ownership of people without the ability, financial means, or apparent intent to run it as a community-based football club. The inadequate rules allowed people to purchase the club for £1 and then take it to the verge of insolvency.
In summary what occurred was as follows: -
- To be able to own/run an EFL club owners and directors must not be subject to a disqualifying condition under the EFL’s Owners’ and Directors’ Test and be notified by the EFL of this. In parallel, they must provide proof of source and sufficiency of funds to the satisfaction of the EFL.
- The fact that EFL rules and English law are unable to prevent the purchase of a company, having the right to participate in the EFL, without acquiring EFL approval at 1) above, placed Charlton Athletic in a potentially perilous position. The completion of purchase of Charlton Athletic by East Street Investments (ESI) was announced on 02 January 2020. It is now common knowledge that neither test at 1) above had been passed at the time.
- Those purchasing the club did satisfy the EFL at a later date that they were not subject to a disqualifying condition. The recorded prior business dealings and the ongoing behaviour of some of purchasers during their period of ownership has convinced many to conclude that the EFL disqualifying rules are totally inadequate.
- At no point did the purchasers ever provide the EFL with proof of source and sufficiency of funds. It is understood that no investment was ever made.
- What did the EFL do? It was totally opaque as far as supporters were concerned. At the time the buyer and seller announced the conclusion of the takeover, the EFL remained silent. A private EFL investigation commenced. Whilst the new owners were making a lot of noise about signings and future strategy etc the EFL placed Charlton Athletic under a registration embargo but this information was not made public. Supporters therefore remained in ignorance about the perilous nature of the club’s situation. The embargo punished the club and its future viability and not the individuals causing the problem.
- Supporters became increasingly concerned about the future of Charlton Athletic but had nobody to turn to. CAST first requested a meeting with the EFL in March 2020. This finally took place in September despite the rapidly deteriorating situation in between.
- Throughout the ESI period of ownership, the financial position of Charlton Athletic deteriorated. Money was spent on a fleet of luxury vehicles, accommodation, and other unnecessary items. Charlton Athletic was on a downward path to insolvency.
- On 10 June 2020, an announcement was made that the company owning Charlton Athletic had been taken over by other individuals. Again, the requirements at 1) had not been satisfied. The subject of the legitimacy of this purchase went to court.
- The downward spiral continued. The 2020/21 season arrived with Charlton now under a full transfer embargo and close to insolvency.
In summary – Charlton Athletic was purchased because the EFL were unable to prevent it. The EFL punished the club because the individuals had not met their requirements. The process of punishment was opaque to the outside world for a considerable time. The club appeared to be financially mismanaged throughout and its financial position deteriorated to a point that insolvency was a distinct possibility. Charlton were close to becoming another Bury. There had been total disregard for the supporters and the Charlton community throughout. Charlton and its community are fortunate that at the last minute a truly “fit and proper” person acquired it.
This should never be allowed to happen to any club again."