Premier League defends owner test after Pulis criticism
By James Skinner and John Sinnott
The Premier League has defended its "fit and proper person" test after Stoke manager Tony Pulis said the system had "broken down".
Pulis wants Portsmouth investigated as the club has had four owners this season and has huge debts.
But the Premier League told BBC Sport that Pulis had "conflated" two issues - club ownership and financial health.
The test was introduced in 2004, though as yet no owner of a top-flight club has failed the Premier League criteria.
The test, brought in to try to prevent clubs from being taken over by dishonest owners, applies to people wishing to become directors or take a shareholding of more than 30%, and primarily relates to an individual's criminal record or whether they have been bankrupt.
It is not a means or intentions test, it is a legal test as to who can own the club
Premier League spokesman
Thaksin Shinawatra, the former owner of Manchester City, would have failed the test when he and his wife were charged with corruption in his native Thailand but had already sold his stake in the club.
"Shinawatra sold because he knew that he and his wife would fall foul of it," said a Premier League spokesman. "In essence he decided to sell before he became a distressed seller."
Bottom of the Premier League and eight points from safety, Pompey are thought to have debts of about £60m and face a winding-up order on 1 March, prompting Pulis to question how the club had been allowed to get into such a mess.
"Who was opening the bank and letting the money pour out? Was there anyone there saying 'No'? If not, why not?" said Pulis, who was Portsmouth boss in 2000.
Portsmouth fans protested about the club's situation last month
"The Premier League and the FA have a responsibility not just to clubs but to the communities who support those clubs."
But a Premier League spokesman told BBC Sport: "Pulis is conflating two separate issues: who owns a club and the state of its finances.
"The fit and proper person test is a narrow and objective test to see who can legally own a club. It has to be legally sustainable.
"It is a test that is closely aligned to UK company law. It is not a means or intentions test. It is a legal test as to who can own the club."
He added: "As regards the finances of Portsmouth those issues have been well documented, as have the actions of the Premier League."
The Premier League believes it is difficult to assess a potential owner's financial viability and a more far-reaching test could preclude different models of ownership such as Supporters' Trusts running clubs.
"A means or intentions test is difficult - an individual could show you a bank account stuffed full of cash, but never actually put any of it into the club," added the Premier League spokesman.
"On the flipside would you want to preclude potential owners - including Supporters' Trusts - that want to come in and run the club on a self-financing model?"
While the top-flight test falls short of the standards required by the financial services sector, Professor of Sport Business Strategy and Marketing Simon Chadwick at Coventry University believes the Premier League has some justification in not introducing more draconian regulations.
"Under European Union law, given that sport has no special status, it could simply be the case that a club being acquired by an overseas investor could actually challenge an over-zealous test," said Chadwick.
"It may well be some time yet before we see the development of a much broader and deeper test."
However, two leading supporters' groups dismissed the Premier League's current test as unworkable.
"I don't believe any kind of test will really be fit for purpose," said Duncan Drasdo, chief executive of Manchester United Supporters Trust, who want supporters of the champions to have a meaningful ownership stake in the club and recruited their 50,000th member on Thursday.
"In the end, there is an inevitable conflict of interest if the owners and supporters are not one and the same.
"It can work for prolonged periods but at some point you get new owners like the Glazers, or owners that change their behaviour, and the problem surfaces."
Brendon Bone of SOS Pompey - a Portsmouth fans' group - described the fit and proper person test as "almost meaningless".
"Fit and proper person is an industry-standard term. It doesn't look into anyone's motives," said Bone.
"Portsmouth have been bought by rich businessmen who then don't seem to have any money. Motive should be the biggest check."
Similar tests apply to the Football League and Conference.
League Two Rotherham's former chairman Dennis Coleman fell foul of the test after the Millers twice went into insolvency while he was at the club, breaching one of its regulations.
And Flavio Briatore, co-owner of Championship club Queens Park Rangers, might have had problems passing the test after being given a lifetime ban from motorsport, but the ban was overturned last month.
Tougher regulations aimed at strengthening the top-flight's fit and proper person test in the Premier League come into effect next month, with officials arguing this new framework brings it into line with Uefa's licensing model.
The new regulations are:
- Clubs must submit independently audited accounts to the Premier League by 1 March each year, with requirements to note any material qualifications or issues raised by auditors.
- Requirement for clubs to submit future financial information to the Premier League by 31 March each year. This will act as an improved early warning system should any club take undue financial risks which may have consequences for future financial stability.
- An annual requirement to demonstrate to the Premier League board that a club does not have outstanding debts to other clubs.
- An annual requirement to demonstrate to the Premier League board that a club is not in debt with regard to income tax or National Insurance and payroll taxes.
- These rules are to ensure that Premier League football clubs can meet their obligations throughout a season including being able to fulfil all fixtures, fulfil contractual obligations to the Premier League and demonstrate that they can meet all payments due during a season.
- Any qualification raised in accounts or risk seen by the Premier League board could result in action to help prevent a club from exposing itself to financial difficulties that may be deemed unsustainable or put at risk the future financial sustainability of a club.
- Clubs that fall into such financial difficulty could be subject to financial controls relating to transfer activity and/or player salaries.
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