It's been a turbulent few weeks since the Salford Star first broke the story about Salford Red Devils players being owed money, County Court Judgements being thrown at the club, kit suppliers not being paid and more (see Salford Star exclusives – click here and click here).
Red Devils owner Marwan Koukash promised to reveal all at a press conference yesterday, which the Salford Star wasn't invited to attend, and the fall-out from that gathering has only just begun. Last night, Koukash answered a few Salford Star questions on Twitter and agreed to be interviewed, saying "I have nothing to hide".
Here we sift through the claims and counter claims to try and separate fact from fiction. But, again, the Salford Star calls for a full Public Inquiry into Salford City Council's dealings with Salford Red Devils so the truth can be told to all residents. At stake is over £2million of public money plus over £22million sunk into the AJ Bell Stadium.
Claim 1: Has Salford Red Devils received any public money from Salford Council?
At the press conference yesterday Marwan Koukash claimed "Since the day I walked through these doors, the club received fuck all from the Council. We have not received a penny from the Council..."
True or False? Strictly speaking, this is actually true. The £1.5million debt the club owes the Council was before Marwan Koukash's time, even though he agreed to pay it off. Meanwhile, last year, Salford Council was rocked by a huge scandal in which it emerged that Salford Mayor Ian Stewart had secretly agreed to subsidise the club with up to £164,000 in match day costs, plus two years free rent at the Stadium.
In the event, according to the report by the Council's Monitoring Officer into the scandal, only £75,000 had actually been paid in cash at that time. But, through a complicated agreement the Stadium company - joint owned by Salford Council and Peel Holdings - collected the match day income, then handed the club the money which was then reimbursed by Salford Council. So, yes, free rent and £75,000 in cash – but not directly from the Council.
Claim 2: Does Salford Council owe Salford Red Devils £750,000?
At the press conference yesterday, Koukash said that Salford Council owed him £800,000.... "When I went to buy the club I entered into an agreement with the Mayor, the Deputy Mayor and the Council that would deliver financial support to the club...I shook his hand and he said `I will deliver'. Two and a half years on, after endless meetings, yesterday I gave the Council a deadline until 5pm to which they could come up with solutions to both of us. They failed to do that..."
In a tweet to the Salford Star last night, Koukash admitted that this was a mistake... the figure was £750,000. We asked to see the document and he responded... "Will be more than happy to show it to you provided the council have no objection...also the promised help in staffing that was never delivered. From a legal point of view, will need the council agreement...intend to send the council a copy by registered ma[il] in case they lost it."
Salford Council has refuted the claim that it owes the Reds £750,000 but didn't respond when asked this morning about it by the Salford Star. However Deputy City Mayor Councillor Lancaster emailed councillors explaining what he called `the real situation'... "It is wholly untrue to say Salford City Council owes the club money and that is in the hands of our legal people"
The only public reference to £750,000 support for the Reds came in a Salford Council Cabinet meeting in December 2012, when councillors rejected the proposal. City Mayor Ian Stewart and Councillor David Lancaster declared an interest and couldn't vote. The Star asked Koukash on Twitter whether the funding document was from 2012 but he didn't respond.
If the £750,000 is from this meeting and, maybe, Stewart had agreed it before being passed by the Cabinet, in expectation of it being passed, then there is a legal minefield ahead. True or False? Without seeing the document no-one but the Council and Koukash knows the truth. The Salford Star calls on both parties to make this document public.
Claim 3: Is Koukash paying off the £1.5million that he agreed to pay back to Salford Council as part of the debt of the old Salford Reds company?
This is incredibly complicated. When Koukash took over Salford Reds there was a CVA, or Company Voluntary Agreement, drawn up with all those who were owed money. In this, Salford City Council claimed £1,583,071 as a `partially participating creditor'. Under the terms of the CVA the Council was to receive nothing in the first year from Koukash but in years 2,3,4 and 5 was to get 4/25ths of what it was owed, which would give a total of £253,291 by 2018. Given that year 2 was to March 2015, Salford Council should have been paid £63,324 so far.
The rest of the debt - £1.33million according to these figures – is to be spread until 2038, interest free (see here). In the new draft Salford City Council accounts there is no reference to any short term debt from Salford Red Devils, only a long term loan of £1.025million.
When questioned on the discrepancy in the long term debt figure regarding the previous year's accounts, the Salford Star was told by Salford Council that it was "an accounting valuation... the cash value of the debt which will be repaid is £1.5million". We were further told that the agreement "is legally protected...The council is prohibited [by the High Court of Justice] from disclosing any part of it".
Is Koukash paying back the debt - true or false? True...but a great big sensational BUT...
At the press conference yesterday he talked about the loan the Council made to the previous directors... "The Council has personal guarantees from those directors but the Council has chosen the easy route and have come to the club, our club, my club, to collect that money" he said
"Our club pays in the region of £300,000 to £400,000 a year to the old debt" he explained "That includes the Council's debt. That's not going to bloody continue. `Mr Mayor and Mr Deputy Mayor you have personal guarantees against the people you've loaned the money to – go after them. Stop taking money out of our club'. The £300,000 could easily pay for a marquee player and more..."
Can Koukash default on a debt that is `legally protected'? He can certainly bust the company that agreed it.
Claim 4: Are Salford Red Devils players being paid?
"Players have always been paid in full and, if not on time, early" said Koukash at the press conference yesterday "Lies put out there that we haven't paid people are absolute rubbish..."
He added on the BBC in regard to Kevin Locke that "I can't even contemplate why he's thinking that. As of this month we owe Kevin nothing and we've paid him in absolute full..."
Kevin Locke has now resigned from the club and the Salford Star understands that he will be instigating rugby league independent tribunal proceedings to seek recovery of his wages. Meanwhile, Tony Puletua has confirmed that he is taking legal action against the club with regard to unpaid wages.
Koukash added at the press conference... "I'm sure there will be one or two other plays running to the press about unpaid wages..."
True or false? Are Salford Reds players owed money by the club? Over the next few months the courts will decide.
So where does all this leave Salford residents and over £2million of public money that might go missing? Will the £1.5million loan to the previous Salford Reds company ever be paid back? Will the Council have to cough up the £750,000 Koukash says he is owed?
Sat in the middle of the spat is the white elephant in the room – the AJ Bell Stadium, joint owned by Salford City Council and Peel Holdings...
More on this to follow. In the meantime, Marwan Koukash last night agreed to be interviewed by the Salford Star saying he has "nothing to hide". Salford City Council and Mayor Ian Stewart refuse to be interviewed about anything.
Graphic by Steven Speed
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