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SALFORD CITY REDS INTEREST FREE £1.26 MILLION LOAN FROM SALFORD COUNCIL
 

Star date: 20th March 2013

SALFORD COUNCIL INTEREST FREE LOAN TO SALFORD REDS

"This is unacceptable for the people of Salford" Councillor Karen Garrido

Salford City Mayor, Ian Stewart, revealed at the full Council meeting today that there will be no interest on Salford Council's £1.5million loan to Salford City Reds after the conclusion of the Company Voluntary Agreement (CVA) that was put in place last week.

New owner, Marwan Koukash, has agreed to pay 16% of the £1.5million loan over the next five years, leaving the remaining £1.26 loan interest free until 2038.

Full details here…


At today's full Salford Council meeting Salford City Mayor, Ian Stewart, revealed that the Council's outstanding £1.5million loan to Salford City Reds will have no interest charged on it after the conclusion of the Company Voluntary Agreement (CVA) which was agreed last week.

The CVA, in place we understand for five years, was agreed between creditors of the old Salford Reds controlling company, Salford Football Club Company (1914) Ltd, and the new Marwan Koukash company Salford City Reds 2013 Ltd.

Under the CVA, Koukash has agreed to pay all outstanding debts of the old company, except for Salford Council's £1.5million loan.

As previous Salford Star articles have explained (see here and see here), over the next five years Koukash will pay back £240,000, 16% of the £1.5million loan. And the rest - £1.26million - will be spread until 2038.

The interest free £1.26million loan contrasts with the previous contract for a £1million Council loan to Salford Reds, where interest was to be paid back at 1% above Bank of England base rate.

At the full Salford Council meeting today, Councillor Karen Garrido, Leader of the Conservatives, told City Mayor, Ian Stewart, that when she found out the loan was to be spread over 25 years "I thought you were having a joke. This is unacceptable for the people of Salford. I couldn't come to the Council and ask for £1.5million and say `I'll give you this much for the first five years and then I want another 20 years to pay'. It's not acceptable."

Stewart explained that under the terms of the deal, Salford Council would get "two bites of the cherry", as Koukash had agreed to pay the debt off, while the old guarantees were still in place with the directors of the previous Salford Reds company headed by John Wilkinson. This included the deal that would pay Salford Council back from a housing development on the site of the former Reds ground The Willows.

Karen Garrido responded that she wasn't sure whether the directors of the old company, Iain Watson and John Wilkinson, would still be around in 25 years should Koukash fail to pay off the debt.

"We believe that in the circumstances we've done the best to look after the people of this city" said Stewart, adding later that "You need to trust us…"

Meanwhile, Garrido asked Stewart about the £16,000 Salford Council cost of employing the consultant Dave Tinker who was involved in negotiating between the various Salford Reds companies…

"That's not a figure I recognise" responded Stewart.

 

See also original Salford Star article on the CVA - click here

 

Photo by Gareth Lyons

mary ferrer wrote
at 05:17:45 on 23 May 2013
I didn't see the interview with the mayor on Tuesday evening regarding the loan of £600.000 to the stadium,so can someone please explain what this is all about. Have we given the Reds the £600.000 or the Stadium. If its the Stadium,why? don't we own the bloody thing.So are the council lending money to themselves. Did he say the Reds had paid back £1m. If he did,do we know when and where within the council is this money.As I said I didn't see the news and have picked bits up on twitter and other sites and I am very confused.
 
MARY FERRER wrote
at 07:19:04 on 25 March 2013
the reasons one of our MP's might be a little slow on following this up, might have something to do with a gift of £10.000 to help when she tried to become dep leader of the Labour party a few years ago. I always said it was the best investment he made, got it back and with interest.Pity we won't see any of the interest.
 
Michael Felse wrote
at 20:09:34 on 24 March 2013
One has to ask why our elected MPs are so quite at this time while a public growth of suspicion appears to cloud Salford Council at ever turn. Will our MPs ensure the people they represent get some answers?
 
Redundant council worker wrote
at 19:24:24 on 24 March 2013
Karen Garrido should call the shots on this and ask the District Auditor to look at the disgraceful episode. The reason the Mayor cant find Tinker's payment is cause they were hidden in the budget so that voters would not know that an ex Director of Salford Council was being paid by the back door. Come on Ian Stewart come clean on this!
 
james graham wrote
at 15:51:11 on 21 March 2013
With no interest and inflation of 2.8% (today's rate) this debt will halve over the 25-year period according to this calculator http://www.hl.co.uk/news/future-inflation-calculator
 
Michael Felse wrote
at 15:51:02 on 21 March 2013
As I said in 2012 "If we are going to do Salford justice we must have a SalfordGate inquiry". In Doncaster I was part of pulling down the Doncaster Labour Councillor Group, including its Leaders, by publicly calling for the DonnyGate inquiry. I have assurance from Salford independent District Auditor that this Salford Reds grant will be part of annual audit. I urge a call for others with concern to be sent at speed to the District Auditor. I am able to provide the Auditor's address. In view of comments on this page I will write to the Salford District Auditor calling for Councillors' personal liability on this topic, requiring them to pay for any losses if unjust action is found. I recommend Councillors insist on independently named recorded votes on the topic's Council Chamber decisions, to ensure they are not mistakenly personally surcharged.
 
kenneth mckelvey wrote
at 09:03:50 on 21 March 2013
Just proves what a load of nonsense Salford Council speak .No money to clean the streets but seem to have plenty for Fat Cat Advisors interest freeloans Orchestras the Lowery Centre etc.
 
Seriously? wrote
at 06:20:08 on 21 March 2013
If the council hand out loans like this without any proper guarantees and dont seem to be able to grasp that it is bad for the people of Salford, then how the hell can they be tusted with the purse strings for the city????
 
MARY FERRER wrote
at 06:19:54 on 21 March 2013
I have a copy of the document which states "A charge being taken against the Willows Rugby Ground (including the Willows Variety centre)Theses were offered by GWH Limited.it also states the Directors would be personally liable for the rugby clubs debts. So it was the responsibility of this council to make sure the city got the money back. The document also states that it is a short term loan. 25 years, wonder what they would call a long term loan. It all stinks. I hope Councillor Garrido will now ask for outside intervention as she and her fellow councillors are the only challenge to the madness that is taking place within this Labour run council
 
Joe Oneill wrote
at 06:19:47 on 21 March 2013
Surely we should be looking at what cretin signed off this money from day one. The sad part is this is not the first time Salford Labour run council have passed our money down the drain, we should be asking the past leadership for a view. You should trust us the comment from Mr Stewart why the bloody hell should we. Labour have shown again what an inept bunch of bloody clowns they are.PS I am extending the kitchen I wonder what sort of rate could I get from the bank of Stewart.
 
Confused citizen wrote
at 21:59:24 on 20 March 2013
Marwan Koukash owns Salford City Reds 2013 Ltd, the company who were loaned the money was Salford Football Club Company (1914) Ltd directed by John Wilkinson and Iain Watson. The two companies are totally seperate companies, the later company no longer activly trades, has very few assets and has no visable means to satisfy it's liabilitys. So why is the guarantee the council say they have, not been used???????? Does this guarantee actually exist? Is it worth the value of the loan? If the answer to those questions is yes then call it in and get all the cash back with interest. It's a win-win situation, the reds fans have had the club rescued are are now free from a large debt, and the council get the cash back. Why would the council not do this????? The only losers would be Watson & Wilkinson & they have nothing to do with the club now so the reds would not suffer.
 
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