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A Fit And Proper Person?

Matthew WatsonContributor IFebruary 12, 2010

LONDON, ENGLAND - FEBRUARY 10:  Portsmouth football club fan David Maples waves a club flag outside the High Court on February 10, 2010 in London, England. Portsmouth FC have seven days to provide a 'statement of financial affairs' proving they can pay their creditors to avoid a winding-up petition.  (Photo by Oli Scarff/Getty Images)
Oli Scarff/Getty Images

Changes to the much criticised "fit and proper persons test" took place by the Premier League last September after calls for a much sterner examination into proposed takeover bids for Premier League clubs were sought after.

Before last year’s changes the test was little more than a glorified criminal records check. In effect, all it did was check whether the proposed new share holders had a criminal record, had any history of bankruptcy, or whether they were "directly or indirectly" already involved, or hold power within, the hierarchy of any other club.

The Premier League now asks for the names of anyone who plans to buy at least a 10% share into a club, whereas this was previously 30%. They now also check the legitimacy of the funds being put forward by the proposed buyer which would be used to buy into a club.

These changes were brought in after former Thailand Prime Minister Thaksin Shinawatra‘s rein as Manchester City owner. Just a year after buying Manchester City he was charged with corruption and had £1 billion worth of assets frozen by the Thai authorities in 2007.

However, there was more. The "Human Rights Watch" wrote a letter to the Premier League (confirmed in a statement issued by the Premier League of receipt of the letter on 31st July 2007) questioning how they could deem Shinawatra "fit and proper" with there being a number of alleged human rights violations against him.

How can someone who just 12 months after being cleared by the Premier League to take over the football club be then charged with such offences and have such serious allegations against their name?

The Premier League’s response: As far as they were concerned, legally, everything was above board and that they always operated “within the law and will take into account any evidence as verified by the appropriate legal process.”

The situation at Portsmouth football club has highlighted again the debate about how someone is deemed a "fit and proper person". Portsmouth have now had four different owners during the course of this season and find themselves in debt of over £60 million. Players have not been paid on time on four occasions already this season and they have had some of their TV rights money taken off of them to pay clubs they still owed for players.

Mismanagement behind the scenes has clearly been a part of Portsmouth’s downfall, but surely the Premier League should have stepped in to intervene in what has become a horrendous mess down on the south coast. They are the governing body for the league and as such, they should look after their own.

Not so, according to Premier League Chief Executive Richard Scudamore. “There’s only a certain point at which we can intervene. We changed our rules in September and now, when we see the financial reports that come in from clubs at the end of March, we will be able to take a stronger role to come in and make sure they are sustainable."

So, when will this point be Mr. Scudamore? Is the fact that they are now onto their fourth different owner of the season not enough for you to step in? As the governing body of the league surely they have a responsibility when a club is in trouble to try and help them, especially in such severe circumstances as at Portsmouth.

The South Coast Club were taken over by Hong Kong businessman Balram Chainrai last week. Chainrai, who had loaned the club £17 million in October which helped them stave of administration, had revoked a clause in his loan agreement to buy the club.

His company, Portpin, have bought 90% of shares and hope to stabilize the club but insist this is only a short term arrangement. "Mr Chainrai has stated that he is seeking a new buyer but he has also confirmed that he will ensure the stability of the club in the short term." Meanwhile Portsmouth Chief Executive Peter Storrie is on the hunt for a fifth owner in the span of 12 months.

Yesterday their case against a winding up petition from HM Revenue and Customs was adjourned for one week. Portsmouth owe £7.5 million to the taxman and although HMRC claimed the club were insolvent (unable to pay back their debts), Portsmouth claimed they had two "very serious" offers for the club.

If Portsmouth does not provide sufficient evidence that they can pay this money back, they face the possibility of going into administration, or possibly liquidation, by the end of next week.

Scudamore said himself that it would be "foolish" to rule out a Premier League club going into administration in the near future, putting the blame on "rank, bad management" if it were to happen.

I just hope that by the end of next week, Scudamore and the rest of the big wigs at the Premier League can sleep at night. The hierarchy of the Premier League should take a good hard look at themselves. Too many of them are businessmen running around trying to sell the Premier League "franchise" rather than dealing with what is really important, the clubs it has under its wing.

The situation at Portsmouth should act as a wake-up call to all other Premier League clubs and the Premier League about the dangerous climate, financially, they are working in and that they must do more to try to ensure something like this doesn’t happen again.