The herd of elephants in the room during all the recent hype about the Marwan Koukash rescue of Salford City Reds were the loans of over £1.5million given to the old regime, Salford Football Club Company (1914) Ltd, by Salford City Council.
At last week's press conference enthronement, Koukash batted away all questions on the financial details of takeover, not that any journalists asked about the loans (see here). This week, however, a decision notice appeared on Salford Council's website confirming that the loans would not be transferred to the new Koukash-led company Salford City Reds (2013) Ltd.
It also stated that the Council has entered into a Company Voluntary Arrangement (CVA) with the old company, with its Directors signing an `Agreement To Pay' "to better secure repayment of the Council's loan by way of the personal guarantees".
In the meantime, the Council had entered into an "Over Arching Agreement with Salford City Reds (2013) Limited, the main terms of which are set out in this report". Of course, the report wasn't publicly available.
The Salford Star e-mailed Salford Council's press office to seek clarification, cc'd to City Mayor Ian Stewart, only to be met with a reply from its Public Relations office…
"It's no surprise that the Salford Star should respond so negatively to an agreement that is good for the council, good for the Reds and good for the city. But every silver lining has a cloud, eh?"
The whole point of the questions was to find out if it was `good for the city'. And whether council tax payers' loans of over £1.5million would be paid back. Despite further e-mails (see below) no-one at the supposedly neutral `Public Relations' department is letting on who sent the response…
…Was it a direct quote from City Mayor Ian Stewart? Was it someone in the press office who, perhaps, had just come back from a rather long liquid lunch? Or was it from £66,000 a year (equiv) spin doctor Matt Finnegan, who is effectively running the Council's PR department?
Salford Council certainly doesn't like people questioning its judgement at the moment or looking into its affairs…
• One horrified Labour Party councillor, Howard Balkind, got straight on the phone to Ian Stewart during last week's Public Meeting on cuts to services for children with disabilities, after hearing of intimidation by Council officers of their own workers. Staff were frightened to say publicly what the affects of the cuts would be on vulnerable children.
• The last publicly available figures showed that bullying at Salford Council was rife – formal complaints were running at over one per month (see here)
• Salford Star requests to see invoices and documents relating to Salford Council's accounts for 2012, as is a legal right, have been met by a brick wall – since last August!
• A Register of Interests for Salford City councillors and Assistant Mayors has still not been published – despite this being promised first for October and then for January.
• The Salford Star still doesn't know the full extent of public money loans to Salford City Reds because a Freedom of Information request sent in on 6th December has still not been answered.
But we digress…
The point of the questions in the first place was to find out what was happening to repay loans by Salford City Council to Salford City Reds. So here are the e-mails in full from Salford Star editor Stephen Kingston, and the replies from unsigned, unknown person in Salford Council press office…
From: Stephen Kingston
Sent: 06 February 2013 07:25
To: Public Relations
Cc: City Mayor
Subject: Salford City Reds
Hi
Having read the latest Decision Notice regarding Salford City Reds it would appear that the Council loan to the rugby club is still to be registered with the Directors of the `old' Salford Football Club Company (1914) Limited under a Company Voluntary Arrangement (CVA). Three questions…
1) Can you confirm that the Council loans have not transferred to the new Salford City Reds (2013) company?
2) I note that the Council is seeking an Agreement To Pay with Directors of Salford Football Club Company (1914) Limited – how do they intend to repay the loan? Are the original terms of repayment still in place?
3) The Council has entered into an Over Arching (sic) Agreement with Salford City Reds (2013) – can you explain what this means? I also note that the Source of Funding is `Existing Council Resources' – does this mean that the Council is investing more money into Salford City Reds (2013) ?
In line with lots of other questions asked to the Council recently by the Salford Star, we do not expect to receive a reply. But please be aware that we are intending to write this up as an article and wouldn't like to give out any wrong information which might damage the Council's reputation.
Cheers
Stephen
From: Public Relations
To: 'Stephen Kingston'
Sent: Wednesday, February 06, 2013 4:55 PM
Subject: RE: Salford City Reds
Hi Stephen,
It's no surprise that the Salford Star should respond so negatively to an agreement that is good for the council, good for the Reds and good for the city. But every silver lining has a cloud, eh?
The new owner has guaranteed to pay every penny the club owes to its creditors. Although you werent at the press conference at the stadium, which you have done so much to try and run down, you will know Dr Koukash's phrase was "100p in the pound". As a result of the take-over, the city council, and Salford's taxpayers , are now in an infinitely better position regarding the Reds. The council will receive its money and the club survives, saving jobs and fans' heartache. Win, win.
The council will continue to do all it can to support the club without providing new money.
Here are your answers:
1) Can you confirm that the Council loans have not transferred to the new Salford City Reds (2013) company?
The Council's loans have not transferred to the new company. They are however included in the CVA and will be repaid by the new company as per other creditors.
2) I note that the Council is seeking an Agreement To Pay with Directors of Salford Football Club Company (1914) Limited – how do they intend to repay the loan? Are the original terms of repayment still in place?
The original terms of repayment under the jointly held personal guarantees held by the former Directors are still in place. Obtaining an 'agreement to pay' from the Directors further reinforces the Council's position in this respect.
3) The Council has entered into an Over Arching (sic) Agreement with Salford City Reds (2013) – can you explain what this means? I also note that the Source of Funding is `Existing Council Resources' – does this mean that the Council is investing more money into Salford City Reds (2013)?
The Overarching Agreement between the Council and Salford City Reds (2013) Ltd sets out how the Council will support the Club over the next 5 years. This includes advice and guidance on health and safety, HR systems and procedures and the facilitation of introductions to businesses in respect of potential sponsorship. No new monies will be given to the Club.
From: Stephen Kingston
Hi
Thanks for that unsigned professional response. Who on earth are you?
In order to ascertain some truth the Salford Star is entitled to ask questions. It's called accountability and democracy. The press asks questions, you give answers (when you feel like it).
Had we been invited to the press conference we would have asked such questions to Mr Koukash direct - rather than `Which would you rather win, the Derby or the Super League'. Maybe that's why we weren't invited.
We do hope that if you reply you would be courteous enough to sign your name
Cheers
Stephen
PS don't talk to us about silver linings and clouds - there's enough dark clouds hovering over Salford to sink a Zeppelin which we're dealing with every day, unpaid. See some of this week's articles.
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