02.03.2010
Portsmouth owner ordered to reveal financial details
A High Court judge on Tuesday ordered full disclosure of Hong Kong businessman Balram Chainrai's financial dealings with Portsmouth as part of a review of the club's move into administration.
The ruling, which means Portsmouth's lawyers will be back in the High Court in two weeks' time, came after the UK tax authorities queried whether the administrator appointed to run the club would operate impartially in the eyes of the law with regard to the interests of all creditors.
"A shadow has been cast over the existing appointment of the administrators and it is clear that shadow should be removed as quickly and cheaply as possible," the judge, Mr Justice Norris, said in his ruling.
"It is common ground before me that immediate liquidation of the company is a course to be avoided if possible. But it is only possible if properly funded administrators can be put in place."
Chainrai became Portsmouth's fourth owner in six months when he took control of the club in early February, having loaned the previous owner, Ali Al Faraj, 17 million pounds (18.76 million euros).
Barrister Gregory Mitchell, representing tax authority HM Revenue and Customs (HMRC), said it was unclear how Portsmouth had ended up insolvent with debts of 65 million pounds.
"We say that there are serious questions which arise and require a full investigation into the financial dealings between the various owners of the club, which at the moment are shrouded in mystery," Mitchell told the court.
Accepting the need for greater transparency, the judge directed that Portsmouth should provide evidence of "each and every sum" which Chainrai's company, Portpin, lent to the club and also "full particulars" of any money paid to Portpin and Mr Chainrai by the club.
Simon Barker, representing Portsmouth, told the court Portpin was injecting 15 million pounds to keep the club afloat until the end of the season.
"There is no reason to impugn the conduct of these administrators at all," Barker said. "There is no reason the court should have any doubts about their appointment and independence."
Portsmouth went into administration last week in order to avoid being liquidated on the order of the High Court following a winding-up petition presented by HMRC in relation to an unpaid tax bill of 7.5 million pounds.
Source: © 2010 AFP -
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