WELCOME TO CARDIFF?

When I see Cardiff City, I think Elvis – ’68 comeback special: “If you’re looking for trouble…” And Cardiff’s troubles are unique. Leeds ex-chairman Peter Ridsdale…is the good guy.

A local paper recently produced a ‘rogues gallery’ of ex-chairman/owners, all candidates for the freedom of Swansea, with Sam Hammam a candidate since proclaiming Cardiff the Welsh club. But he’d love the description ‘rogue.’ Because he deserves worse.

His popularity in Cardiff lasted from promotion into the Championship until he couldn’t hide what he’d borrowed to fund it. In 2005, £30m debts ‘emerged’ and Cardiff avoided administration, a ten-point deduction and near-certain relegation only by a £500,000 PFA loan, which went down badly among fellow-strugglers, especially when funds ‘emerged’ for two important signings.

The debts were mainly loans from “non-UK-resident investors.” And (remember these words) were due for repayment by 2011. The anonymous investors said their investment demonstrated “confidence in the club and its current management” (Hammam) and paid off £22m owed to Citibank – Cardiff’s promotion funding.

So desperate were Cardiff that Hammam recruited Ridsdale to obtain alternative funding, his Leeds legacy still fresh (e.g. Ken Bates). Ridsdale’s plan revolved around City’s new stadium development, funds for which were denied Hammam when he wouldn’t reveal, in any important detail, where the loans (£24m) originated (the name…Langston and the country…Switzerland were all he’d tell). Thus was Hammam forced to resign, though not before he’d paid nearly £1m to his company, Rudgwick, for ‘management services’ as Cardiff ‘managed’ financial near-meltdown.

A new board, chaired by Ridsdale and including the co-owners of stadium developers PMG, was announced at a January 2007 shareholders’ meeting. And they withdrew an offer to make Hammam life-president, a move which could have been considered churlish but wasn’t. It was reported that Langston (linked with the Dominican Republic this week) had agreed to ‘write-off’ their £24m in return for naming rights, premium debenture seats and development opportunities at the new stadium. And additional council, PMG and Football Foundation monies boosted Hammam’s sketchy stadium-funding plans.

Previous shareholders railed at a deal which saw their shares’ value heavily diluted. But their ire was directed at Hammam. And the local press declared: “The £24m debt…has been wiped out” (Langston’s anonymity a mere afterthought). Cardiff’s troubles were over. Or so we thought.

In August, Langston – via lawyers Hextalls – instigated high-court proceedings to recover their £24m immediately, plus £6m “anticipated interest to 2011.” They claimed “this sum is due now (because of Cardiff’s) inability to meet deadlines (and) breaching the terms of its loan arrangement” (to date they’ve never said how). They had no alternative “following (Cardiff’s) failure to respond to repeated approaches.” And, importantly, expressed “serious concerns about the club’s ability to manage its finances”, endorsing “a new board and management.”

Ridsdale’s incredulous response was: “Far from refusing to talk to them, we don’t know who they are.” In January he’d said Langston directors had been “identified but who they are physically, we don’t know. Since then, nothing had changed. Langston, “Panamian-registered” this week, remained mysterious. Hammam, noted Ridsdale, “is the intermediary” but their secrets were safe with him. The council re-iterated that the original stadium deal foundered on this and that their identification efforts had met “with a brick wall.”

Hextalls tellingly referred to “the case of Leeds United” amid claims that Cardiff’s new board had submitted accounts for Hammam’s last year which “did not reflect its true financial position.” These attempts to absolve Hammam brought Ken Bates to many minds. After Bates’ pretence that he was unconnected to Leeds’ major creditors – who happily lost £18m thanks to his (mis)management - many were spelling Langston H-A-M-M-A-M. Local businessman Michael Isaac revealed Hammam had sought his help to buy back into Cardiff. But even Isaac had only met “a Swiss accountant who was acting for Langston but was not an employee.”

City and Langston continued a public argument one notch above “my dad’s bigger than your dad” while the team floundered in lower mid-table, undermined by the saga and its attendant costs, “£100,000 and rising by £20,000 per day” claimed Ridsdale in September. Hopes for explanations and solutions rested on a November 21^st high-court hearing.

But Langston puzzlingly delayed matters further, which revealed a flaw in their declared thinking. Should Langston win a court judgement demanding immediate repayment (and they claimed they didn’t even have a case to answer) City would be unable to pay the debt as it fell due – meaning administration. In which case, ‘unsecured’ creditors – like, say, Langston – would only get the pennies in the pound usually salvaged from such wreckages.

Langston questioned “why the club has raised the issue of administration.” And City could, with some justification, have been accused of scaremongering. But then Langston finally showed their hand: “The board of directors should relinquish control of the club to Langston.”

The high-court hearing was deferred to December 10^th after Langston asked a judge for disclosure of documents City claimed they’d already agreed to provide. And Ridsdale began sounding desperate. The December 10^th hearing “must go ahead, we cannot afford a delay (which) would be a bigger disaster than losing.” This seemed to give Langston an idea. On December 7^th, they said documents due by November 30^th had reached Hextalls at 8pm that day. Too late – to the surprise of over-worked solicitors’ clerks everywhere – because everyone at Hextalls “had gone home.”

Nobody now doubted Hammam’s involvement and motivation. A ‘dispute resolution expert’ told the papers: “It’s a power-struggle.” And South Wales Echo journo Terry Phillips openly begged Hammam to “stop this farce and come out with some pride intact.” Ridsdale had been bluffing, though. The court hearing’s deferment to March miraculously resurrected banks’ confidence enough to fund City through any cashflow problems.

Its difficult to give Langston any credibility, even by quoting their solicitor’s statements, other than as Hammam’s weaponry in a power-struggle, despite public statements from both sides being glazed in politics. So obvious is Hammam’s manoeuvring that he’s coming across as Ken Bates-lite. Little wonder Ridsdale’s the good guy.

‘MotorMurph’ is written by Mark Murphy

Entry Filed under: MotorMurph Column

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