Everton shareholders have urged the club’s owner, Farhad Moshiri, and the Premier League to end the “farce” of a proposed takeover by 777 Partners after the troubled company was accused of fraud worth hundreds of millions of dollars.
The investment firm 777, co-founded by Josh Wander and Steven Pasko, agreed a deal to buy Moshiri’s 94.1% stake in Everton eight months ago but has been unable to meet the Premier League’s criteria for allowing the takeover to proceed. These include the repayment last month of a £158m loan to MSP Sports Capital and two local businessmen, Andy Bell and George Downing, with 777 having been granted a short-term extension to repay the loan. The Miami-based company was also reportedly late last week with a £15m loan to Everton for working capital. It has loaned the financially troubled club more than £200m.
Further doubt was cast over 777’s ability to fund its acquisition of Everton and pass the Premier League’s owners’ and directors’ test at the weekend when the company was accused of fraud in a lawsuit filed at a district court in New York. The lawsuit, the 17th in which 777 Partners and its affiliates have been named, was submitted by a pair of London-based asset management companies, Leadenhall Capital Partners LLP and Leadenhall Life Insurance Linked Investments Fund plc. They accuse 777 of pledging more than $350m (£279m) in assets as collateral to Leadenhall despite knowing the assets had been pledged to another lender (“double-pledging”), were not owned by Wander’s entities or did not exist.
The lawsuit alleges that Wander and Pasko “are operating a giant shell game at best, and an outright Ponzi scheme at worst” and claims: “The only question now is whether Leadenhall will be able to recover millions of dollars in damages from a house of cards on the brink of collapse.” When contacted, 777 declined to comment on the allegations.
An Australian airline owned by 777, Bonza, entered voluntary administration last week. The football investigations website Josimar revealed on Monday that 777’s two main creditors in its takeover of Standard Liège, the club’s former owner Bruno Venanzi and the former owners of its stadium, are seeking to have the company’s assets in Belgium seized.
Despite the lawsuits and numerous problems at other football clubs in 777’s portfolio, Moshiri has maintained the company is “the right partner” for Everton. The Everton shareholders’ association (EFCSA), however, which has about 1,500 members and owns just under 5% of the club, has condemned the failure of Moshiri and the Premier League to end a damaging takeover saga. Everton could be at increased risk of entering administration while the episode drags on.
TheAn EFCSA said in a statement: “We are the oldest shareholders’ association in the world and are dismayed by the lack of respect being shown to our football club by the largest shareholder, Farhad Moshiri, and the Premier League during what seems a never-ending change of ownership process. We have observed with concern and frustration as it became increasingly clear that a fit-for-purpose process cannot possibly take this long as the Premier League continues to demonstrate their inability to regulate.
“In the absence of the Premier League making a timely decision we insist that the Everton board, and Farhad Moshiri in particular, stop this damaging process now and recognise that 777 Partners are not at this time fit-and-proper prospective owners of Everton Football Club. The powers that be are being disrespectful to our fellow shareholders, our fantastic worldwide fanbase and football as a whole by continuing to allow this farce to continue. We demand a decision and we demand it now.”
The Premier League declined to comment on Leadenhall’s lawsuit and the implications for 777 passing its owners’ and directors’ test.
Source: theguardian.com
