Everton hearing over financial breaches underway this week

Just a bit quicker off the mark than I thought it would be, I can only assume they will publish some other major exclusive on the eve of the derby or derby day itself.

This line jumped out of the report:"Such is the level of secrecy surrounding the process that senior figures at Everton were unaware that the hearing had begun when contacted by Mail Sport earlier today."

So the agony of not knowing could go on another month after the hearing next week.

I note the Daily Mail states that "Such is the level of secrecy surrounding the process that senior figures at Everton were unaware that the hearing had begun when contacted by Mail Sport earlier today."

And they continue "Mail Sport has learned that the independent commission began on Tuesday, with Everton and the Premier League making opening submissions in a behind-closed-doors hearing that is scheduled to conclude next week."

So the Mail believes senior figures at Everton knew nothing about this meeting, and yet Everton representatives were in attendance?

Sloppy (Daily Mail – not Barry!).

Everton's alleged breach of the Premier League's financial fair play rules will go before an independent commission on Wednesday, 25 October.

The Toffees were referred in March by the Premier League, but specifics of the FFP case were not revealed.

Reports say the charge relates to a tax issue surrounding loans for the club's new stadium at Bramley-Moore Dock.

Everton have denied wrongdoing and said they were "prepared to robustly defend" their position. — BBC, 15 June 2023

Everton referral hearing over alleged breach of financial rules set for 25 October

It's probably not uncommon for documents and a brief summary to be handed over to the committee a bit earlier than the actual date of the hearing. The reference to waiting for an announcement until next month isn't too wild either as 1 November is only a week after the date of the hearing.

It could possibly be even longer...

"at some point next month...but will be guided by the commission, who are not working to any set timeframe."

I agree about the summary prior to hearing – it's actually stated in the rules that the charge is formally submitted at the time of reference to the commission. Everton then had an initial period to provide a written response before the hearing. I am still surprised the hearing has started when all indications were it kicked off next week!

It's probably too close to a conspiracy theory that they have brought it forward to facilitate the sale with a known outcome??

Surely a public hanging would be the order of the day if they really wanted to get after us. Not that the persecuted want to hear that – martyrdom is addictive.

So nobody told Seamus.

But seriously, does that even seem remotely possible?

I can see Sean Dyche (pretty senior) not being particularly interested in /aware of the nitty gritty of the hearing...only the outcome.

Perhaps the pesky derby is distracting him!

I wouldn't expect any of the rest of the board, Chong and Thelwell, to be particularly interested as they'd be busy with other things I would hope.

How is it possible for us to face sanctions way before Man City?

We have Bill Kenwright and his dog defending us.

Man City are also facing 115 charges to our one. It's going to take years for their situation to play out.

So it's not about overspending on transfers then? That's what the media have been spouting since the beginning. Or is that a separate issue?

It sounds like the Mail are getting nothing out of Everton Football Club – and I don't blame the club when you read some of the shite they spout.

"Such is the level of secrecy surrounding the process that senior figures were unaware that the hearing had began" = "Fuck off and leave us alone, because we have got nothing to say to yers, and even if we did, we have got nobody to tell you because the club has become ungovernable."

It was reported in September “The UK government has admitted its embassy in Abu Dhabi and the Foreign Office in London have discussed the charges levelled at Manchester City by the Premier League, but are refusing to disclose the correspondence because it could risk the UK's relationship with the United Arab Emirates”.

If the correspondence alone is potentially diplomatic dynamite to an international relationship then I expect the Premier League will be under pressure to water down any penalty against Man City. The Premier League caved in to government pressure on the Saudi Newcastle takeover, probably more of the same here.

Re senior figures on the board, I think it's the Chairman who is probably not available.

The interim CEO and Director (ie, on the Board) is Colin Chong.

The interim CFO is James Maryniak, although he does not feature on the club's Board of Directors webpage, suggesting he is not actually on the board, whereas John Spellman, non-executive director, does.

The owner is now on the board but is probably in Monaco.

I'm pretty sure Kevin Thelwell is not on the board, if that's what you were implying.

If he succeeds, we might end up with that massive Chong home stand at BMD.

It was indeed Chairman Bill that I was thinking of when I said CEO. But as the acting (does he sing and dance as well) CEO, I doubt Colin Chong has much input into the process since he was employed for his expertise in other fields and had the role thrust upon him, as well as not knowing where the skeletons are.

And yes, I thought Thelwell was on the board.

So I guess the short straw has been drawn by one, or both, of the CFOs you mention.

As for the actual independent commission, it is a reaction to the Final Accounts Auditors Report so as to be looking as if they are doing something, with a tight innocuous remit. The Premier League would not be carrying out it's regulatory function if it didn't. The details of the independent commission will not be made public (lucky for the Mail and Guardian), other than the sanctions imposed, if any.

It sounds pretty authorative.

It made me look with a bit more attention than I have applied since the board changes were finally announced "within 48 hours" of the incompetents being dumped — back in June.

The way they told it, it seemed John Maryniak had replaced Grant Ingles as (interim) CFO and therefore (we assumed) had a place on the board.

But when you look at the announcement for Colin Chong, it says "Interim CEO and Director" — it doesn't say 'and Director' for Maryniak… even though he was (confusingly) the Director of Finance before he was promoted to interim CFO.

So he's not on the Board of Directors.

But I'm sure it matters not when it comes to giving evidence before the independent commission, if that's what they are doing. Best to ask Jerome as he knows exactly what's going on, including what they are having for lunch.

Au contraire, it seems to me that in this interim period, no-one is truly in charge and compared to the mighty resources Man City can bring to bear, we are more like rabbits in the headlights.

Maybe the Premier League will take pity on us given our pitiful position.

Whatever happens, it sets a precedent which others will watching… some in fear. Much about the Premier League is a bit fishy so I expect us to fight hard and win.

Are the League's spending rules and payment of taxes not two separate issues? Wouldn't tax be a matter for HMRC?

Maybe it's taxis. We must have spent a fortune on taxis for managers.

One of the Premier League's P&S rules is that clubs must pay their taxes.

If that is indeed what all this fuss is about I expect a slap on the wrist and a fine if, hopefully, we can show we eventually paid those taxes, or had a reason to defer them.

I've made that point before about taxes and HMRC. Unless tax paid was mischaracterized in the accounts? But I don't think we've paid tax for ages because we haven't made a profit.

And as for tax on loans… is there such a thing?

A breach of P&S rules is very simple: the club made more losses in the past 3 years (4 with Covid) than is allowed. But that would then bring into focus all outgoings and how they are characterized, given that some are exempt (eg, Academy, Women, Stadium Construction etc).

At least if it's season 2021-22, then it shouldn't be direct costs of Covid in question but I think they were still claiming transfers and player asset values were adversely affected.

The devil is in the detail… which we may never know as the commission hearings are confidential. Only the outcome is made public. But this may be different with the other clubs circling and ready to swoop in for a nice killing.

"The charge [is] related to alleged adjustment of losses to comply with the League's profit and sustainability regulations, one of which being interest payable on loans for the construction of the new stadium build at Bramley-Moore Dock."

Hearing into alleged breaches of Premier League rules by Everton has already begun

Hmmm… This makes much more sense than taxes. Maybe the club has classed the interest payments on construction loans as being a cost of construction, and the Premier League is seeking independent clarification of that from the commission?

Come on, Jerome, tell us what's really going on.

Man City have been charged.

In a legal situation, I'm guessing there's a difference.

The fact that the Premier League has recently changed its rules to ensure that clubs under scrutiny submit their final accounts for a season several months earlier may give an indication as to the issue?

Something changed between the season ending and the publication of the accounts? The auditors certainly did.

As to the independent commission starting early and secretly, I'd also guess that the various members of the commission wouldn't just rock up on the day and think "Let's get stuck in", given the complexity, the financial issues, the legal implications and perhaps some unprecedented issues, like COVID allowances?

Maybe they're having preliminary sessions to examine the facts and opinions in advance, and get the issues and implications straight? Maybe both parties have made submissions already?

I'd be astonished if the club weren't doing the same, but then again!

But I'm just guessing, like everyone else.

''Maybe the club has classed the interest payments on construction loans as being a cost of construction?''

You've hit on something there, it's this, or something like this, which is in a grey area that needs an independent decision rather than just be rubber-stamped.

It's also a way of showing other clubs that the Premier League is being diligent in their decision-making. If it is this, I'm hopeful we will get cleared and put on probation.

I think if someone like yourself had been looking after the financial welfare of the club, we wouldn't be in this mess.

God knows, but the independent commission seems to be to sort out a technicality, which means the Premier League looks as if it is doing its job.

I still think they had to do something after the Final Accounts replacement auditors report to fulfil their regulatory function.

The 777 Partners takeover is where the real action is.

Hope you're keeping well.

Way past all that now. Had an involvement in a couple of similar business and legal situations once upon a time. Much of the groundwork involved tends to be done before the day, which makes for a more productive day.

Presuming it only lasts a day, of course.

If it were interest on non-capital loans being charged to construction then that would be problematic.

I understand Jerome's point. The "going concern" note in the accounts was very heavily caveated and may have raised a few eyebrows in terms of the "sustainability" aspect of P&S. But if we're still under the financial threshold then I would have thought it's a case of "nothing to see here".

Presuming the club provided full and accurate information and the scrutiny was conducted properly, it will be surprising if we are now found in breach of the rules.

That said, I would feel more comfortable if the club's representatives at the hearing included at least the Finance Director responsible for last year's accounts. He more than others would have first-hand knowledge of the details of previous discussions with the Premier League.

We will get an answer to how the club is treated by the independent commission in the near future. I haven't a clue what we are appearing for next week but would feel better if we were represented by someone who has a good explanation for the commission, one that gets us off the hook or at least limits any penalties.

Not looking to undermine your comfort blanket but I seriously doubt Everton's transfers were "scrutinised" to any significant extent by the Premier League. It's not the Premier League's job to do that – nor do I believe they would want to.

Furthermore, if the BBC reporting is correct the breach concerned tax-related issues relating to the new stadium rather than player transfers. Not saying the BBC are correct... simply pointing out that no-one actually knows what Everton are alleged to have done wrong.

Everton have been reported to the Premier League and are facing legal action for allegedly failing to pay an agent fee related to a recent international signing.

Mail Sport has learned that a global agency has sent multiple legal letters to the club over an unpaid invoice worth several hundred thousand pounds, as well as engaging a debt recovery service in attempt to get the money.

Everton declined to comment when contacted by Mail Sport, but sources at the club dispute that they agreed to pay the agent. They also pointed out that the agent in question was not declared on the registration documents sent to the FA and Premier League.

EXCLUSIVE: Everton reported to the Premier League over failing to pay an agent fee

Michael @33 posted:

"The charge [is] related to alleged adjustment of losses to comply with the League's profit and sustainability regulations, one of which being interest payable on loans for the construction of the new stadium build at Bramley-Moore Dock."

Certainly haven't seen anything suggesting that Everton's losses are "far exceeding" the permitted limit.

I'm not even sure if there's any substance to their articles, or who's behind it?

You have never heard that the club's losses over a 3-year period are over £400M when the permitted losses are £105M?

My take would be it doesn't much matter what has taken them over the top (if that is proved) it is simply the end figure that counts with regulations. Likewise, even if PL were scrutinising our operations I agree that won't be a defence but might well be a mitigation??

I think you're right to remind us of the wording of the Premier League's original referral statement.

One concern I would have with your assessment period is that it doesn't seem to include the additional allowance made for the Covid pandemic, which (from memory) increased the period from 3 to 4 seasons, but something about averaging the losses of the Covid affected seasons?

Not sure if this was ever entered into the Premier League Handbook, and which edition? Sorry to be so uncertain… may be you recall what this was and how it affected the P&S calculation?

But if we're still under the financial threshold, then I would have thought it's a case of "nothing to see here".

I like your attempt at clarity and simplicity but it really is a question of how Everton got their figures below the financial threshold – by claiming a series of exemptions.

It could take just one claimed outgoing that the club classified as exempt in the final accounts, whereas the Premier League think it was not exempt – that could then take them over the financial threshold.

Definitely a lot to see here – there must be something pretty serious if Everton have employed a KC – but we mere nothing supporters won't get to see any of it until the fate of our club is decided by the faceless three sitting on the commission.

Of course I know that but as Graham #51 points out the P&S limit is calculated very differently from the loss figure shown in the publicly available accounts which is what you are quoting.

We weren't considered to be in breach of P&S rules prior to 20/21 despite our actual losses being much higher than £105 million.

Something changed in 21/22.

I think Brendan is referring to the Commission's remit.

Brendan #40,

Good point regarding construction costs, but I can't see the Premier League getting involved in Everton's tax affairs.

It is more likely that, having worked closely with Everton over 2 years, monitoring and guiding them in remedial action to prevent a breach of the Profitability and Sustainability Rules, and giving assurances that Everton were on the right path, that the Auditor Report spooked them.

They suddenly found themselves holding the baby should anything go wrong. The independent commission will probably go through the figures for the 2-year period to verify them, hence Everton's expression of confidence at the time.

But in the meantime, outside the independent commission, there is pressure on Moshiri to sort out the 'going concern' issues mentioned in the Auditor's Report: funding of the stadium and club operations (working capital, aka cashflow).

The main aim of the Premier League will be to maintain a large Premier League club with a new stadium in a sustainable position, whereas the main aim of the FCA is to ensure that those who takeover Everton are able to fund their commitments, very much aware of the impact of doing so for a major UK City and their community.

I think it is safe to say that neither the Premier League nor the FCA have confidence in Moshiri running Everton, and they will take whatever they can get from him before he leaves.

He will definitely lose his shirt on this one.

Perhaps I could have worded it better,

My "nothing to see here" was specifically related to Jerome's apparent suggestion that the Auditor's Report was the catalyst for us appearing before the commission.

I was only arguing that suggestion was incorrect.

Of course there's potentially a lot to see here.

The Esk would point out his figures are estimates where he had no actual numbers but I think his figures are generally excellent.

Aggregate PSR position -£164,918k
Permitted losses -£105,000k
Excess losses £59,918k

I agree with Brendan, something changed that the Premier League took exception to. Can anyone remember when the stadium build was capitalised because, as Brendan pointed out, that would change the treatment of interest??

Thanks for that. And sorry, I probably took it out of context; I think I can see what you meant if I re-read it differently.

I would be very surprised if the P&S breach has anything to do with the 'going concern' issue raised in the Auditor's Report as Jerome has invented — it was specifically in the context of Everton being relegated.

Hey guess what. We weren't.

"Can anyone remember when the stadium build was capitalised?"

Not saying you're right but it's likely to be something as dull as that!

I have been at Board meetings where Auditors reports have been discussed, before being made Public, (not at a AGM in Everton's case ) and what was in it was taken very seriously. Fortunately I was never at one in which where 'Going Concern' Issues where raised, especially with a Regulator breathing down the Boards neck.

I would say that it would have been pretty vocal with concern, giving the implications when the Final Accounts were made Public.

We are talking about two attempts at a Auditor Report here.

I think I echoed your obvious unease when I stated above that the "going concern" note was very heavily caveated but, as Michael points out above, it was also massively predicated upon relegation.

And we're not talking about two attempts at Auditor's Reports here – there was only one firm of auditors privy to the 20/21 financial information.

Still it was stated in the Auditor's Report mid season, before the season was ended. The heavily caveted nature of the report was the second auditor covering their ass.

My understanding is that one auditor resigned because of the final accounts, and was replaced by another auditor. The auditor for the coming year is put forward for appointment at the previous years AGM or, in Everton's case, at the board meeting that finalised the previous year's accounts, since they do not have an AGM. That is where I got the' two attempts' from, which having posted it on reflection felt I had been unclear.

Hopefully the above is clearer.

What you say about company / profit tax may be true but it's my understanding (but I don't know where I got it from) that it's related to VAT.

I wondered at the time, why the 3 Board members (those who were so cruelly treated by our awful fans!) so suddenly resigned with (I assume) fair old payoff. I can understand thunder thighs resigning so suddenly. Her being so stressed after being cruelly headlocked by (someone or other), who no-one seems to know, and the police are still waiting for info from the club, I understand.

And the one-time Legend also being thanked profusely for his noble service to club and supporters. And, no doubt, receiving a very nice leaving present; also resigning (probably due to stress), as well.

Anyway, I would have thought the CEO (during the period in question) and the Chief Finance Officer (during the period in question) would be brought back, by the club, to act as witnesses by the club. Both being the major officers in charge of the good running of the club during the the time in question.

In fact, I can't understand how the Chief Finance Officer was allowed to resign, considering he was the man who (we hope) was closely involved in all of our financial dealings during the time in question!

The Chairman is recovering from a major illness and may well not be in a position to give any information of the period in question.

What a load of sexist shite.

The fact that the board stayed away from the ground while Everton were facing a quite possible/probable relegation before resigning was, in my view, appalling.

The Chief Executive Officer. along with the Chief Finance Officer, were, along with the Chairman, responsible for all aspects of the good running of our club during the years in question. They might well volunteer to attend the independent commission… but I doubt it.

Why didn't you refer to the Chief Finance Officer, the one-time legend, or the chairman as “thunder thighs”?

If it is as you view it, then I am a sexist in your world. I would have referred to the Chairman as a fat twat and I've never called a woman that. As for the Chief Finance Officer, I've never seen him.

As for the point raised. Any views on their early/ I'd have called Sharp Thunder Thighs but I didn't call him anything. As far as I'm concerned, he's no Legend to me.

That might be true if it wasn't for the fact that Kenwright gets called much, much worse, as has Moshiri. The CFO much less so because I don't think he made much in the way of decisions.

In fairness, I don't think Barrett-Baxendale did either, but she was supposedly our CEO, so head above the parapet. I also recall on this thread, or similar, some pretty unkind descriptions of Sharp, but I don't think anyone called that misandry.

Whether one should be throwing insults, mild or more serious, at any of the management team, male or female, might be a matter of debate. Some of it of course comes from anger and frustration at the mess this collective have made of things. And in the case of the headlock, what is perceived as lying, maybe correctly.

I don't want to get involved in any sort of sexist (or otherwise) argument, but what I will say is Ian Wright gave our fans, (who he had previously praised in the past along with admitting a long-standing affection for Everton) some grief on MotD following the ghost headlock report.

However, a couple of days later, he clearly seemed to have been given some more accurate information about the 'incident' and retracted his comment and apologised to the fans via his social media outlet. Something about that ghost incident clearly stinks to high heaven.

In my world? Try a dictionary definition – I think you'll find it's more than just my world:

Characterised by or showing prejudice, stereotyping, or discrimination, typically against women, on the basis of sex.
"old-fashioned sexist attitudes".

You'll just have to get on with it.

I like the term "thunder thighs".

That's just not done. You are not a real professor, don't pretend.

That's why in most of my posts concerning her I referred to her as Mrs Barrett-Baxendale.

Someone makes a sexist "thunder thighs" comment and you're minded to reflect on Barrett-Baxendale's use of the "Professor" title.

Man's world eh?

I don't have a good word for Bill Kenwright either, but you'd have thought he'd have had a word in her shell-like – at least he had the nouse not to flaunt his honourary doctorate before the plebs.

I've scoured this thread for the descriptions of male members but I'm still intrigued.

I think it was Kenwright who wanted a matching blonde beside him and made the first sexist remark regarding Denise. As Kenwright's personnel assistant she did okay, but never stood up to scrutiny as a Chief Executive.

At Everton in the Community, she had good people to depend on, who knew their job; at Everton FC, she didn't. Only ones under the patronage of Kenwright – like herself.

No idea in what way criticising Barrett-Baxendale in the way I did arises from it being 'a man's world'. Just a judgement, and I think a correct one.

See my post at 72 for a broader perspective on insults thrown at our board members. As I said there, calling someone a bit fat is pretty mild compared to the stuff that, rightly or wrong, is thrown at other board members.

Now when it comes to actually running the club… well, she failed miserably. She neither led nor directed it to success nor prevented its financial failure.

As to reference to any sexist comments.. insensitive sexist personalised insult? Of course it was, but nothing more than you hear every day — not personally, I might add, but I wish I had a penny…

Pansexism is very triggering.

Perhaps in TW 30-35 years…

The club are now awaiting their fate and it is understood the judgement will be passed to Everton's lawyers, who will have 24 hours to deliberate, before it is published on the Premier League website.

Everton: When will FFP hearing and 777 Partners takeover uncertainties be resolved?