Vital Football

Beginning of the end? Winding-up petition issued

Beginning of the end? Winding-up petition issued

Pompey are facing yet another battle with HMRC, with another winding-up petition issued against the club following a failure to pay a tax bill of almost £800,0000. A further £1m has since become outstanding...

Is this the beginning of the end once and for all?

Well time will tell but the club have issued the following statement on The Pompey Site...

Portsmouth Football Club Statement

Over the past few weeks the club has been the subject of media speculation, with a number of parties - including prospective owners - speaking publicly about the state of affairs at the club.

We have generally tried to avoid adding to this speculation as it is not helpful and does not assist in the day-to-day management of the club's affairs.

The club is in a difficult set of circumstances at the moment. The period from November to January was always going to be one where the club received owner funding. This injection of cash was to cover a number of areas in our working capital requirements, including salaries and PAYE as well as scheduled payments for player acquisitions from last summer.

We knew that the club would not generate sufficient funds to support itself through this period. However, when CSI, the club's parent company, went into administration we were given assurances by the Administrator of CSI and the charge-holders over CSI (Portpin Limited) that the club would be funded through this period until a new owner was found. This has not happened. One of the reasons for this is that the Administrator has not generated expected funds from the sale of other CSI businesses that might have assisted the club's position.

The club's working capital position has therefore been severely stretched while we seek to resolve the ownership situation and this has resulted in the debts that are due to HMRC.

The club therefore has some difficult circumstances to manage. The charge-holder over CSI may choose to fund the club for any current shortfall in order to protect the value of its financial position. However, this appears uncertain/unlikely which means we may have to try to raise funds through player sales, although this is clearly not our preferred route.

In addition we still have a significant number of parties interested in acquiring the club who are actively pursuing their respective interests. We therefore remain positive that a solution will be found before some of these difficult choices have to be made. As you can imagine this has been, and remains, a very difficult balance.

We have been in regular contact with HMRC, The Football League and our creditors to keep them advised of the position. We will continue to work around the clock to achieve the sale of the club as soon as possible, something which remains our priority and the outcome we all hope for.


What is the process for HMRC and any winding-up petition?

When a debt is not paid to HMRC on time, they are able to issue a petition to wind-up a company. A date is then set for a hearing - this normally takes a couple of months to happen and for us this will take place on February 20.

HMRC are required to advertise the petition which they must do no later than seven days before the date of the hearing. We understand that they will be advertising this week, but some information has been released to the media in advance. We had asked them to delay this process (as they have the discretion to do) as it is likely to harm the club's position, the sale process and possible player trading, potentially to the detriment of HMRC and other creditors.

How much is owed to HMRC and how has this happened?
The petition sought by HMRC is for the PAYE for December which is approximately £800k. Since the raising of the petition a further £1m (in VAT and PAYE) has become due for payment.

By the end of last season, the club had managed to achieve a position close to break even on its P&L (Profit and Loss statement). We will be reporting a relatively minor loss in our accounts which are due to be filed next month.

When CSI came into ownership they pursued an investment strategy that involved injecting funds over and above the club's own generated income, principally relating to player acquisition and salaries, resolution of legacy issues from previous ownership and a significant working capital backlog.

This was in line with their revised business plan that was approved by The Football League at the time and was subject to the funding being underwritten by CSI. This business plan had peaks and troughs in cash flows whereby some months required additional funding and some did not. December and January were months where funding was required. When CSI went into administration this funding obviously stopped immediately and the club has been left with its own revenue streams.

Why has the club not made this information public before now?
The information is obviously commercially sensitive and potentially harmful to the club's interests. As mentioned above it would not be something that we would wish to advertise unless absolutely necessary, as it makes the current circumstances more difficult to manage and potentially harms the sale process and any possible player trading.

We have had to react to the statements made over the weekend which we did not sanction, although the information will likely be officially confirmed this week in any event. There is an important distinction here between transparency and conducting the club's business in public to the detriment of the club's own interests.

Why is the club making this information public now?
Now that the information has been put into the public domain by third parties we felt it necessary and appropriate to clarify the position and explain the circumstances as far as possible.

What is happening about a possible points penalty from the League?
The League are finalising their report on the club's position following the administration of CSI and we are expecting to receive the outcome shortly. However, we understand that the League may delay their decision until the club`s current ownership situation is closer to being resolved.

What happens if funds are not raised or provided?
We are obviously not in Administration at the moment and continue to do everything possible to achieve a successful outcome.

Ultimately if the club cannot meet its debts, it may face administration and the associated impact both operationally and from a football point of view (in terms of an automatic points penalty). We remain positive that this eventuality will be avoided, not least because it is in the interests of those concerned, including the charge-holder, to preserve the value of the club as far as possible.

Who is currently in control of the club's affairs?
The directors and senior management of the club continue to run the club on a day-to-day basis. We have regular contact with the Administrators of CSI as they are our 'de facto' shareholder. However, they do not have direct control over the business of the club, including player trading for example.

How can the fans help?
The most important thing our fans can do is continue to support the club and the team by coming to Fratton Park. The Administrators and Portpin cannot take money out of the club and all our revenue will be used towards meeting the running costs of the club. For the avoidance of doubt, all funds generated by the club are going, and will continue to go, towards funding the club's ongoing cash requirements.

Can there be much gas left in our tanks...


Join the Vital Pompey Debate

Vital Pompey on: facebook Vital Pompey on: twitter

Join the Vital Pompey Forum Debate

Frippy's Virtual Bookies - here.

Click here to join in the debate on the club forum.

Date:Tuesday January 24 2012
Time: 9:25PM


Actually the club statement doesn't make pretty reading but one small positive is that CSI is being broken up with a view to keeping Portsmouth football club afloat. I can imagine Chan will pay salaries for maybe two months more; hopefully he will be able to drop his return expectation to get the club off his hands.
24/01/2012 22:32:00
Who Knows..we've been done by crooks and userers
plymouth graham
24/01/2012 22:34:00
be positive people who knows what will happen. surely if talks are on going and as lkampitt said the possible new owners new of these new debts it will all go down to the negotiations play up pompey
25/01/2012 04:10:00
i dont see why the fa cant bring forward part of the parachute payment to cover these outstanding debts
25/01/2012 04:12:00
As far as im aware Pog The Parachute payments are already accounted for in the CVA
25/01/2012 06:03:00
I can't imagine Chanari will let us go to the wall, he has too much to lose. We can only raise a certain amaount by selling players this month & we will still owe taxes to HMRC in the coming months. So Chanrai has to do his bit until we can find a new owner.
25/01/2012 09:29:00
There may be a possibility that Chanrai forgoes his investment here. Investors can take hits sometimes. It may not be in his interest to do so just yet, but it is a real possibility that shouldnt be ignored should events go beyond our current breaking point. This article proves the club wanted everyone to keep their mouths shut. They are basically admitting we are in a whole load of poo! If you are reading this any other way I would like to know.
25/01/2012 17:33:00
Didn't Chanrai close down some Israeli football club? I thought we were too big to go down, but not now. Its drapes this time folks. The Darlington ex owner said he would pay the money to the league they were in and owed money to the tune of 200.000, in order to save the club but not the million to creditors because he got nothing for it - he could open a cancer ward in a hospital with the money and get more satisfaction - and he is right too. We will only be the beginning, this house of cards will not stop with us once we go.
25/01/2012 18:06:00
Page 1/1
  1. 1

Login to post a comment

Recent Portsmouth Articles

On this day in history...4th December

A look back at this day in history, and what was happening with Pompey courtesy of our sister site PompeyRama, 4th December.

Sunday Chimes #97 - a week off but a look ahead

Grimsby next Saturday a look back, Smith almost snatches a prize, a chance to meet Motty and the tragedy of Chapecoense..

On this day in history...3rd December

A look back at this day in history, and what was happening with Pompey courtesy of our sister site PompeyRama, 3rd December.

Evans - Right back or right midfield?

Drew Talbot and Adam Buxton are fit but Gareth Evans continues to fill in at right back. Should this change? If so where would it leave the battle between Evans and Carl Baker?

Archived Vital Pompey Articles

Vital Pompey articles from

Site Journalists

Editor email
Editor email
no email

Current Poll (see more polls)

Change at right back? If so where would this leave Evans?
Suggested By: pompeyrug
Keep Evans at RB23%
Drop Evans. Talbot or Buxton at RB55%
Drop Baker. Evans at RM0%
Keep Barker in RM. Leave out Evans completely0%
Cookie knows best (?) In him we trust22%
ScoopDragon Publishing Entire League Network of Sites

League Table

# Team P W D L Pts. GD
1 Doncaster 19 12 3 4 39 14
2 Carlisle 19 10 8 1 38 14
3 Plymouth 19 12 2 5 38 8
4 Portsmouth 19 9 4 6 31 12
5 Luton 19 8 7 4 31 10
6 Yeovil 19 8 4 7 28 1
7 Wycombe 19 8 4 7 28 1
8 Blackpool 19 7 6 6 27 11
9 Barnet 19 6 9 4 27 0
10 Grimsby 19 7 5 7 26 2
11 Crewe 19 6 8 5 26 -3
12 Cambridge 19 7 4 8 25 -2
13 Mansfield 19 6 7 6 25 -4
14 Stevenage 18 7 3 8 24 -1
15 Colchester 19 6 5 8 23 1
16 Crawley 19 6 5 8 23 -11
17 Morecambe 19 7 2 10 23 -13
18 Hartlepool 19 5 7 7 22 -4
19 Notts County 19 6 4 9 22 -8
20 Accrington 19 5 6 8 21 -5
21 Exeter 19 6 2 11 20 -5
22 Leyton Orient 19 5 3 11 18 -5
23 Cheltenham 19 3 9 7 18 -8
24 Newport 18 4 5 9 17 -5
Vital Football Comment
Latest F1 News
Latest Vital Boxing News
Write for Vital Football

Recent Portsmouth Results (view all)

Portsmouth Fixtures (view all)

Dec 10 2016 3:00PM : Grimsby Town (a)
Sky Bet League Two
Dec 17 2016 3:00PM : Hartlepool United (H)
Sky Bet League Two
Dec 26 2016 3:00PM : Newport County (a)
Sky Bet League Two
Dec 31 2016 3:00PM : Yeovil Town (a)
Sky Bet League Two
Jan 2 2017 3:00PM : Luton Town (H)
Sky Bet League Two
Jan 5 2017 7:45PM : Doncaster Rovers (a)
Sky Bet League Two

Vital Members League Table

5.Dorking Pompey1
The Vital Football Members League