Sports Capital to sue GFH

[SCOTTISH LEEDS]

From the YEP:-

Sport Capital, the consortium which failed with a bid to buy Leeds United last year, has launched a £33m claim for damages against Gulf Finance House over the collapse of its deal.

Sport Capital claims GFH and the bank’s private equity arm, GFH Capital, breached the terms of a Share Purchase Agreement (SPA) reached between them, causing the proposed takeover to fail.

The Sport Capital group - a consortium featuring ex-Leeds managing director David Haigh and Andrew Flowers, MD of United shirt sponsor Enterprise Insurance - spent almost three months attempting to push the buy-out through but saw the deal fall apart in January 2014.

The failure of that bid cleared the way for current owner Massimo Cellino to agree the purchase a 75 per cent stake in Leeds in early February.

GFH, which took control of United in 2012 after securing a 100 per cent stake from Ken Bates, retained control of a 25 per cent share after Cellino’s takeover and is still a minority shareholder at Elland Road

Sport Capital accuses GFH of breaking the terms of the SPA by negotiating the sale of United to Cellino and the Italian’s UK firm, Eleonora Sport Limited.

In a statement issued today, Sport Capital also claims that GFH attempted to sell the Yorkshire club to Khaled Al-Baltan, who was president of Al Shabab football club in Saudi Arabia.

Flowers and Haigh, who has been under arrest in Dubai since May of last year over allegations of financial wrongdoing made against him by GFH, were the two public faces of the doomed Sport Capital offer.

Today’s statement said Cellino was also involved with that bid, along with Terry Riley, the owner of the Ascot Property Group.

Sport Capital’s statement read: “The SPA provided for Sport Capital to fund the working capital of the club throughout the term of the SPA, which they did.

“The SPA also specifically prevented GFH from entering any negotiations or discussions with any other parties regarding the sale of Leeds United shares.

“The legal action against GFH states that the exclusivity of the SPA was breached by GFH which continued to pursue the sale of Leeds United to third parties including Mr Khaled Al-Baltan, then the president of the Al Shabab Football Club in Saudi Arabia.

“It further claims that GFH’s separate negotiations with Massimo Cellino and Eleanora Sport Ltd were in breach of the agreement.”

Sport Capital’s £33m claim has been lodged with the High Court in London and a spokesman said the group was seeking to have GFH Capital’s English assets frozen.

“We expect GFH to attempt to evade service of the claim from their Dubai HQ which will mean ultimately we have to serve this claim on them through diplomatic channels,” a spokesman said.

“Our contention is that the actions of GFH and specifically of (GFH chief executive) Hisham Alrayes delayed and then destroyed the Sport Capital deal.

“This was a deal which would have ensured a sustainable and successful future for the club and that included the almost immediate purchase of Elland Road, the terms of which had been agreed.”

GFH is yet to respond.

The court claim the latest in a long line of exchanges involving Haigh and GFH, exchanges which followed the bitter end of the Bahraini bank’s time as owner of United.

Haigh was imprisoned after GFH accused him of defrauding the bank of around £3m during his time as deputy CEO of GFH Capital.

The 37-year-old quit that post in February of last year but was arrested at GFH Capital’s offices three months later after flying to Dubai to discuss a job offer from the firm. He denies all charges against him.

Haigh was a director of Leeds for the duration of GFH’s time as owner, taking on the role of managing director in July 2013, but he quit that post shortly after Cellino’s takeover following an admission from the Italian that he intended to sack him.

[NottinghamWhite]

You couldn't make this up you really couldnt. If all the turmoil at Leeds was a movie folks wouldn't watch as they'd think it was too far fetched. Why can't we just have a football team instead of all these shysters hovering over the club all wanting to make a quick buck.

[superwhites]

Bruce Willis is filming Die Hard 55 at Elland Road apparentely
He saves a load of hostages from the West Stand and saves the day

[SG90]

Where's this £33m going to come from? I guess it will be taken out of the club, just like last year's mysterious £18m that was spent on 'other'.

[USA for Leeds]

It's GFH being sued, not the club. So it would be GFH paying, not the club, assuming GFH lost.

But what I think is that David Haigh has finally gotten tired of rotting in jail and has taken the gloves off. Good for him. It's a travesty what's happened to him and I like that he's come out swinging.

[SG90]

My point was more that, where do GFH have that kind of money and that they will probably have to steal it out of the club again.

[USA for Leeds]

Who knows how much money GFH have, or where they have it. That's always been the mystery with them. But they have much more in their portfolio than Leeds United.

Your fears are not groundless, though. It is a concern.

[johnh]

My point was more that, where do GFH have that kind of money and that they will probably have to steal it out of the club again.

As minority shareholders (10%) I don't think they have the means to steal it out of the club.

[Gilford_NI_Whites]

It should be no different than any other shareholder of any club, being sued. If the lose they can pay it from their personal bank account.

If they were taking money belonging to another(lufc), then that's theft.

however, everyone loves to take money from lufc.

[dlw10]

The real irony of this is that there are plenty of quotes from Haigh back in January 2014 in which he was apologising to Leeds fans for failing to buy the club due to his backers not being able to come up with the money! I am absolutely sure this latest "claim" is merely a smokescreen by Haigh to try to confuse and delay the various legal processes even further. And, with my less serious head on, I did laugh at the suggestion that GFH had "cost" Sport Capital £33 million by allegedly reneging on the deal to sell them the club........from what we all know about the state of the club finances when Cellino bought I would venture to suggest GFH actually saved Sport Capital about £33 million!!!!!