Liquidation of FAI not a viable option, says Ross

FAI board apologises for mistakes of the past as senior officials all but rule out stadium sale

FAI president Donal Conway and executive lead and board member Paul Cooke at the FAI reconvened agm in the Citywest Hotel. Photograph: Nick Bradshaw

FAI president Donal Conway and executive lead and board member Paul Cooke at the FAI reconvened agm in the Citywest Hotel. Photograph: Nick Bradshaw

 

Senior FAI officials have all but ruled out the sale of the association’s stake in the Aviva Stadium, saying that the agreements in place with regard to its holding in the ground give it “little room for manoeuvre” and that an implausibly high sale price would have to be achieved in order to yield any substantial benefit.

Outgoing president Donal Conway said that the organisation had considered all options but suggested that any sale would effectively require the agreement of the IRFU and the Government.

“There are two shareholders here, notwithstanding that the Government has a charge, and in the first instance the conversation would have to be between the two stakeholders.

“So it’s not that there is any refusal on the part of the board to consider the disposal of an asset, it’s just that it’s not easily effected in the case of the key financial asset [that the association possesses].”

There is a general belief that there would not be much interest in buying the stadium as it does not actually generate any significant profits. The IRFU has already said that it would not have any interest in bidding.

Vice-president Paul Cooke, who is also effectively acting as chief executive of the association, said that the financial situation did not really point to a sale making sense given the need there would be to achieve such a high price.

“The bank has a charge of €30 million on it and we need another €20 million, so we would have to sell it for at least €50 million in order for anything to be actually realised for the association.”

Cooke also stated that the association had received advice to the effect that the board would not be guilty of reckless trading as long as it was still talking to key stakeholders such as the Government and Uefa about its financial requirements. He said that the association’s bank, Bank of Ireland, remained extremely supportive but he acknowledged that if the loan on the stadium was called in, which is a possibility due to the fact that the association has breached its banking covenants, then “liquidation would be a possibility”.

However, on Sunday evening Minister for Sport Shane Ross said that the Government did not see liquidation or examinership as an option for the association.

Statement

In a statement, Ross said: “In response to the events at the reconvened FAI agm today I wish to state that the Government does not see either liquidation or examinership as a viable option for the association or for Irish football. Over the Christmas period Minister [of State for Sport] Brendan Griffin and I have been moving with other stakeholders to find a solution to the crisis that includes an acceleration in the pace of reform, the future of government funding, above all, a more secure outlook for FAI staff and certainty that grassroots football does not suffer.”

Many delegates at the meeting questioned the standard of previous financial governance at the association and its auditors, Deloitte, came in for repeated criticism. The firm said that it would not be seeking to continue as the association’s auditors, but its representative, Richard Howard, declined to provide detailed answers in relation to its performance in recent years.

Instead, he read a prepared statement in which he made it clear that the firm had acted on the basis of assurances it had been given by the FAI’s board that it had been provided with all the relevant information required to provide accurate accounts. It now realised, he said, that it had been been “misled”.

Richard Howard of Deloitte at the FAI reconvened agm in the Citywest Hotel. Photograph: Ryan Byrne/Inpho
Richard Howard of Deloitte at the FAI reconvened agm in the Citywest Hotel. Photograph: Ryan Byrne/Inpho

Former FAI director, Brendan Dillon, pressed Howard on the firm’s own responsibilities and said that he had alerted it to his concerns about a variety of financial matters at the organisation when he departed a decade and a half ago.

“I want to put on the record that I resigned from the board of the FAI 15 years ago,” said the Dublin solicitor. “And I wrote a very lengthy letter to the then board addressing concerns that I had at the time and a copy of that went to your firm [Deloitte]. It wouldn’t have been you that was in charge at the time, and in that letter I addressed issues including, among many other issues, payments to directors, projections versus reality in relation to the accounts, what was being projected and what actually was the reality and the monitoring of expenses.”

He put it to Howard that: “The auditors have a responsibility to check expenses? Isn’t that correct? For instance, the FAI had a policy in relation to expenses; they had to be fully vouched. I presume you were aware of that?

When Howard countered that: “that would be one for the directors”, Dillon responded: “No, no, no, that’s a matter for you as an auditor”.

“You have a responsibility as an auditor and particularly in relation to voluntary and charitable organisations that the money that is received by the organisation is used for the purposes for which the organisation has been set up; ie to promote and foster football.

“Did you have any procedure for instance: sampling, in relation to expenses because €600,000 is what has been discovered were not actually proper expenses. So, my business is audited and every single expense that I have to account for is checked and receipted, so my auditors do that and you don’t seem to have done that or did you?”

Howard sought to respond by reading the prepared text again at which point Dillon said: “It is a very straightforward question: when you were given information in relation to expenses, did you check that they were receipted?”

“I decline to answer that question,” said Howard.

There was some acceptance within the meeting that many of those present had played a part in allowing what has happened at the association to transpire. David Nolan, club secretary of Dublin club St Patrick’s CYM, said that anyone who had issued a letter of support for John Delaney after reports of the scale of the problems that had developed during his time in charge had started to emerge should “move on, get out of the game”.

But Derry City representative Denis Bradley went further and said that having taken up a position on council three years ago he was “shocked that if anybody asked a question it was reacted to like Oliver asking for more food”.

The board, he suggested, might bear more responsibility but council members and others had also played their part, he suggested, and a statement apologising to all who had been let down should be issued; something he argued that might be regarded by many, including politicians, as a necessary part of any rehabilitation of the association.

When he pushed for a vote on it, Conway said a statement would be issued after the meeting had concluded. “I have made a note of the issues that you have raised and we will certainly reflect those in the statement.”

On Sunday evening the FAI did release that statement in the form of an apology “to the hundreds of thousands involved with Irish football at all levels of the game, to the Irish public and to FAI staff”.

Conway said: “The clear message from our delegates today is that Irish football wants to move forward and we apologise to all our stakeholders for the mistakes of the past.”

Government sources privately said the apology was a welcome step and acknowledged the FAI was in a “very fragile situation” which may demand a “dramatic response”.

Although there is no indication of a State bailout, sources said the appointment of independent directors of the FAI – expected as soon as the coming days – would increase the confidence of creditors.

Ross said he “welcomed the apology and acknowledgement of the wrongs of what had happened in the past”.

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