Arsenal have ended a controversial annual £3million payment to majority owner Stan Kroenke after its legality was called into question.
The club have outraged supporters with the substantial sum paid for consultancy by the American’s ‘Kroenke Sports Enterprises’ firm for the past two years.
Arsenal Supporters’ Trust wrote a letter to the club’s chairman Sir Chips Keswick challenging whether the payment was in breach of regulations and a conflict of interest.
Arsenal have ended a controversial annual £3million payment to majority owner Stan Kroenke
Arsenal insist that the fee was ‘waived’ by KSE, but declined to comment when asked if the payment was illegal or if it had been stopped due to the letter sent by AST. The supporters’ trust believe it had a significant effect on the decision.
They sought legal advice and in the letter, sent in January and seen by Sportsmail, AST chairman Glyn Taylor wrote: ‘We have serious concerns over £6million being paid by Arsenal to an overseas corporate entity related to one single shareholder and two directors (the “KSE Payments”), as well as wider governance matters. These concerns are shared by other shareholders as was evident at the Annual General Meeting (“AGM”) in October 2015.
‘From Arsenal’s public statements at the 2015 AGM, and other disclosure, the payment appears to have been made: without a pre-existing contract or competitive tender for services without fully considering whether there was a conflict of interest; and potentially in breach of regulations
The club have outraged supporters with the substantial sum paid for consultancy by the American’s ‘Kroenke Sports Enterprises’ firm for the past two years
Arsenal manager Arsene Wenger (left) and the club’s chairman Sir Chips Keswick
‘The world of football, and its global governance institutions, face unprecedented scrutiny of their conduct and internal procedures. Shining a light on cronyism and backroom deals in football such is occurring at FIFA and UEFA is long overdue and rightly welcomed by the honest majority in our sport.
However, this heightened scrutiny of institutions means increased repetitional risk for how clubs like Arsenal, and other organisations, go about their business. ‘We are concerned, inter alia, about the potential reputational damage these payments have on Arsenal.’ Taylor offered to meet representatives of the club to discuss the issue. Instead AST received a brief reply in another letter. However, when the accounts were released last week the payment had been cancelled.
AST spokesman Tim Payton told Sportsmail: ‘More than 90% of our members were against this fee and believed that Stan Kroenke had not been able to justify it or explain what services he provided. We considered it to be an inappropriate payment. This welcome outcome shows that supporters do have a voice and organised pressure can make a difference.’
An Arsenal spokesman said: ’For the year ended 31 May 2016 Kroenke Sports & Entertainment LLC has waived its entitlement to any fee in respect of services provided to the Group.’
Arsenal Supporters’ Trust wrote a letter to Keswick challenging whether the payment was in breach of regulations and a conflict of interest
The issue of the payment for ‘strategic and advisory services’ has been continually raised by the club’s fans since it was first revealed in September 2014. It caused particular consternation at the time because the initial £3m was the same amount generated by a three per cent increase in season ticket prices. When it was contested at a fiery annual meeting last year Keswick was forced to defend himself, saying: ‘I am not Mr Platini, I am not Mr Blatter.’
As angry fans continued to question him on it, Keswick threatened to close the meeting if they did not desist.
During a week in which finances in English football came under even more public scrutiny following allegations of mass corruption in the game, Arsenal announced it had been stopped.
AST said in a separate statement: ’AST are delighted that the Arsenal Board has responded to our challenge to its corporate governance by ending the £3m consultancy fee to Kroenke. Thanks to all members who raised this in Arsenal AGMs, forums, Q&As and other platforms. It shows that fan pressure can work.’
No comments:
Post a Comment