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Sunday, December 17, 2006

"Are Rangers Going Bust? (Saturday's Daily Express Story) + Response

[Below Saturday's Express story "Are Rangers Going Bust..." + response posted on QPR.org messageboard by Club's legal advisor Nico De Marco saying story is "rubbish".

Daily Express- Saturday, December 16 - By Tony Yorke
Are Rangers going bust?; -Even Club's Accountants Have Fears for Future

Accountants at debt-ridden Queens Park Rangers have warned the club that they may ha ve broken the law in their desperate attempt to avoid going bust.
The Daily Express has discovered the amazing confession in financial documents filed last month at Companies House - the government agency reporting directly to the Department of Trade and Industry.
Recording debts to the tune of GBP 19million, an annual income of just GBP 8.5m and losses that are running at GBP 4.32m, auditors Rothman Pantall & Co have chosen to paint a very bleak future picture of the struggling Championship club, who are run by colourful chairman Gianni Paladini.
They expose the current accounts of Queens Park Rangers Football & Athletic Co - the company who run the football side of the QPR business - as being worthless because there is no "evidence" to back up the club's claims.
And they say the club's financial statements - lodged with the DTI an incredible 16 months late - may have been prepared improperly. If true, this would be a clear breach of the Companies Act and regarded as a criminal offence.
"We have had problems and the accounts have been a mess, " Paladini said yesterday. "But the issues we have faced have not been of my making.
"They are the results of the actions of the club's former directors. I am simply the man who has been left to pick up the pieces - which has included raising 6m [pounds[ since September 2005 so we can pay our way.
"Without that money, we would have been forced to call in the administrators because our losses have simply been so great. But we have not been insolvent, I guarantee that." But Paladini's reassurances may not have the desired effect on officials from the Football League and the DTI.
They will be very concerned by the claim that evidence provided by the club's board - including current and past directors - cannot not be relied upon, particularly over the club's assertion that they are a "going concern" and have not traded while bust.
And their own accountants have delivered a damning indictment on the business credentials of the club's board.
"We planned our audit so as to obtain all of the information and explanations considered necessary in order to provide us with sufficient evidence to give reasonable reassurance that the financial statements are free of material mis-statement, whether caused by fraud or other irregularity or error, " say the accountancy firm.
"But the evidence available to us to confirm appropriateness of preparing the financial statements on the going concern basis was limited. This is because the company have not prepared any profit or cash flow projections for the appropriate period subsequent to the balance sheet date." As a result, they say, they have been "unable to form a view" as to whether the club are a going concern. They also could not offer an opinion as to whether the statements gave a true and fair state of the company's affairs or if they had been properly prepared.
Senior sources within the game's top brass and the DTI suggest they may be forced to act. "We are monitoring the QPR situation very closely and have spoken to the club about the restructuring of their debts, " said a Football League spokesman. "If we find out that Rangers have broken the rules then we will act." It is difficult to assess just how bad Rangers' financial affairs are because the figures released by the club on November 15 relate to the period ending May 31 2004 and are hopelessly out of date.
However, a well-placed finance director at a Premiership club who has seen the Rangers accounts, said:
"There is a golden rule when it comes to football finances - you must avoid getting in over your heads at all costs.
"It goes to another level when your own accountant reports publicly that there is no evidence to back up important financial claims - and that the club may have breached the Companies Act.
"If that was to happen at my club, we would expect to be under formal investigation by the DTI and the League." Regardless of what might happen with the League and the DTI, Paladini has pledged to ensure things are done by the book in future.
"I have had professional people around me and relied on them to do things properly and on time, " he said. "That hasn't always happened. But you have my word that it will do now.
From now on our accounts will be sorted out on time." (Daily Express, December 16)

[And then on a messageboard, the club's (unpaid)legal advisor, Nico (Nicholas) De Marco posted this response to the Express story:]
"More rubbish I am afraid.
The only thing this story in the Daily "Dianni Inquiry was a cover up" Express proves is that a few sad people continue in their attempts to try and attack QPR.
I was warned of this story earlier this week. It is not a serious story at all, and the main claim that accountants warned the club 'that they may have broken the law in their desperate attempt to avoid going bust' is rubbish as the independent auditors (to which they mean) I am sure can testify.There was no 'amazing confession in financial documents', just the fact (as I understand it) that because very old accounts of the Club (financial year ending April 2004) were filed late the auditors could not sign the "going concern" part, as evidence of this would have to be deduced from current projections the Club was still working on and the Club did not want to wait for these to be done and thus risk filing the old accounts even later. Nor is there anything from the auditors accusing the club of preparing coounts "improperly" - at least I have seen nothing in the document (the audited accounts) which this freelance journalist sent and based this story on.
The article is about late, old accounts of the football club. Says nothing about the current financial state of the football club company and absolutly nothing about the accounts of the Holding Company which is the body which actually keeps the FC co, and the club afloat.
A complete non-story. I am afraid there will be a few who will revel in it as they do in any attack of this sort, but we have more to worry about with injuries for today's game than anything in this story. As usual with all these stories, anyone doubting will see time will tell. (QPR.org Messageboard

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