Football Management

Commentary on the management of over 160 English football clubs by Dr John Beech, winner of the FSF Writer of the Year Award 2009/10 Twitter: @JohnBeech Curator of Scoop.it! Football Finance

Some rather late and ineffective justice for Luton fans

Posted by John Beech on September 11, 2011

There was some small crumb of comfort for Luton fans in the news that four of the directors of the previous owners of the club had been banned from being company directors (1) (and hence now fail the Fit and Proper Person Test).  Former chairman Bill Tomlins was disqualified for six years; Derek Robert Peter, the former CEO and a chartered accountant was disqualified for seven years, and Richard Sidney Bagehot and John Mitchell were each disqualified for three years.

The official statement from the Insolvency Service (2) who investigated Luton Town, or more exactly the old company, Luton Town Football Club Limited (“LTFC”) – which is not in any way connected with present owners Luton 2020 – makes clear the scale of what had been going on under the club’s previous owners:

The investigation by The Insolvency Service found that the directors of LTFC had breached Football Association (FA) and FIFA rules and caused LFTC to trade at the risk and detriment of HM Revenue and Customs (“HMRC”), being in arrears with PAYE and NIC within a few months of commencing to trade and recently not declaring or paying its VAT liability.

Between July 2004 and February 2007 LTFC acted in breach of FA and FIFA rules and regulations on payments to football agents. The FA enquiry found that the company had dealt with unlicensed football agents and made payments totalling £157,000 through its holding company Jayten Stadium Limited (‘JSL’) using funds provided by LTFC which should have been paid by LTFC itself and routed through the FA.

During the same period of July 2004 and February 2007 the directors individually either caused or allowed the company to trade at the risk of and ultimate detriment to HMRC which was owed £3,578,661. The Court heard there was a pattern of non-payment and chasing from HMRC.

Why I say “small” crumb of comfort is for two reasons.  First, the club has had to suffer as a football club for the misdemeanours of these previous owners (see previous posting where I wrote of Luton’s ‘unfair disadvantage’) in terms of points deductions and the resultant relegation to the Conference.  Seeing four people just banned from being company directors hardly results in an overall balance of justice being seen to be done.

Secondly, the perceived lack of balance in justice is exacerbated by the fact that these goings-on came to light as a result of whistle blowing from within the club, which should have in part mitigated the punishments handed out to the club.

The success in bringing about these bans must give HMRC a good feeling for their ongoing fights with football clubs.  These currently include the major fight North of the border against Rangers (a blog worth a look at on this is Rangers Tax Case as is The Scotsman), their attempt to have the Football Creditors Rule thrown out by challenging the leagues in court rather than taking action against individual clubs, and the ongoing cases against Harry Redknapp, Milan Mandric and Peter Storrie.  Some interesting reading coming up there’s no doubt, and the various court rulings may have significant implications for all clubs.

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5 Responses to “Some rather late and ineffective justice for Luton fans”

  1. Simon said

    I may be mistaken here, but I’m pretty sure that when the fans forced the Hatters into administrative receivership in 2003 in order to get rid of John Gurney, the old company (Luton Town Football And Athletic Company Ltd.) then ceased to exist. Does that mean that in the space of just four years, Tomlins and co. created Luton Town Football Club Ltd. to run the club, raked in over £13m of transfer fees and *still* managed to create a financial black hole? If so, I have to say it takes a special kind of incompetence to manage that.

    • Mark said

      Indeed, incompetence of a singular kind. But what of the FA and the Football League? They came down like a tonne of bricks on the club when the crooks had fled the scene and the only punishment against the former directors was to ban them from future involvement in football. It beggars belief that these same “guardians of the game” dealt with West Ham on the basis that “it is wrong to punish the fans for the actions of the club”.

      • Here here, well said .
        The FA have one set of rules for the big boys and another for the little clubs like Luton.

        It breaks my heart to see how many of todays stars started at LTFC

        Criminal !

  2. John Beech said

    If anyone is interested in reading more on why I think that points deduction is dysfunctional as a sanction, my Working Paper on this is downloadable as a free pdf here. It was written in 2009.

  3. [...] Some rather late and ineffective justice for Luton fans Football Management [...]

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