Mps Urge Action Over Bates' Leeds Deal

MPs from Leeds yesterday called on the Treasury and tax officials to challenge the creditors' vote that handed control of a debt-free Leeds United to Ken Bates and his associates last month.

The Liberal Democrat Phil Willis who, along with Labour's George Mudie and Colin Burgon held a Westminster meeting with the Treasury minister, Ed Balls, the paymaster general, Dawn Primarolo, and the sports minister, Richard Caborn, said: "We are trying to get the Treasury and HMRC [Her Majesty's Revenue and Customs] to challenge the administrator's decision by July 3. There was £7.7m owed to the taxman and that is no small matter. We had assurances this morning that the taxman is taking this very seriously and we are optimistic a challenge will be raised before [next Tuesday's] deadline.

"To their credit there was nothing we raised in the meeting that came as news to them. This is important to football, not just Leeds United."

Next Tuesday's deadline relates to the end of the cooling-off period during which disaffected creditors may challenge the decision made by the administrator, KPMG, to approve the bid that saw Bates's consortium take over the club after paying only 1p in the pound to creditors.

The MPs showed evidence of the late declaration of debts to directors and associated companies, the existence of which helped swing the vote in favor of Bates's consortium. With 75% of creditors, according to the value of their debts, required to approve the proposal, the final count found 75.2% in favor.

The two specific cases raised by MPs yesterday were that of Yorkshire Radio, which declared no claim in the preliminary statement that was issued to all creditors but whose demand in the final document circulated at the vote was for £480,000. Four of the directors of Yorkshire Radio also had board positions in the club.

The second case related to Mark Taylor & Company, whose principal, Mark Taylor, is a director of both the club and the takeover consortium. The company's initial claim rose from £59,756 to £273,615.32 in the final analysis. "There was no point billing because I knew I wouldn't have got paid," said Taylor yesterday. "I knew the club did not have a lot of free cashflow. But the work had been done, so I was perfectly entitled to do that."

A spokesman for the administrator, KPMG, said yesterday: "We have taken and conducted this in accordance with normal insolvency procedures and were advised by legal counsel to ensure we were operating in accordance with insolvency law and we always acted in the bounds of that."