rumours

[KenH]

I have been in touch with Niyah Smith via twitter and to be fair, he has been pretty open. I spoke with him on Feb 25th and he told me that Sarb had sent The FA everything they needed to and it was all in The FA's hands. Sarb were waiting to be called to a meeting.

Feb 25th still very sloppy on their part to hand it in, given the amount of time this has been going on for. And the fact that the EFL still aren't happy with it (takeover would have been approved otherwise) raises serious doubts about the legitimacy of their funding.

Something more generally to add - there are other interested parties. A few may have missed this as it's behind a paywall, but Matt Slater (very good and reliable journalist) from the Athletic reported it and the issue being that Sarb are willing to pay well over any reasonable valuation, apparently double what other bidders are offering.

Now, was Mr Grumpy Sarbjot or Jason?

Why on earth would Sarb be willing to do that? Surely anyone would want the club as Cheaply as possible.

Assuming it isn't some kind of con/scam, there are potentially lots of reasons.

When buying a business, there are many ways of buying/funding it. It's not like a house where you just pay a lump sum in exchange for the keys. Though that is a possible method. More likely when bigger money is involved are "paper for paper" swaps, earn-outs based on future performance, etc, or a mixture of different ways. Paper for paper swaps or earn outs are always going to potentially give a higher value than a simple "cash for keys" deal.

Different buyers also have different motives, often tax-based. If the buyer is facing a big tax bill on the previous sale of a business or business assets, he may be in a rush to "buy" a business to use the proceeds to claim tax relief, or if he has high income, he may wish to buy it via a tax incentive scheme such as Enterprise Investment Scheme (or Small enterprise investment scheme) which give both income tax and capital gains tax reliefs. Such tax reliefs are often very significant, so someone may well be happy to pay more for a business because they may get, say, half of it back from tax relief/refunds, compared to someone else who hasn't got a big tax bill and won't get tax relief on buying the business. I believe it's a big motive for professional investors such as Dragons Den, Alan Sugar etc., i.e. there's a kind of "need" to buy into businesses to reduce their tax bills!

So it may well be that our fabled "local consortium" are offering a simple "cash for keys" deal and don't have tax reducing motives, hence offering half of Sarb. Whereas, maybe, Sarb's deal is "paper for paper" and maybe including "earn outs" too., all with tax relief/reduction behind it, meaning his actual "net" cost could be similar or even less than the local consortium, but with higher risks for Dellboy & Rodney as it may not be as much "upfront" cash. No one knows outside the inner circle between buyer and seller, probably not even the Board!

[Wild Bill]

I have been in touch with Niyah Smith via twitter and to be fair, he has been pretty open. I spoke with him on Feb 25th and he told me that Sarb had sent The FA everything they needed to and it was all in The FA's hands. Sarb were waiting to be called to a meeting.

Feb 25th still very sloppy on their part to hand it in, given the amount of time this has been going on for. And the fact that the EFL still aren't happy with it (takeover would have been approved otherwise) raises serious doubts about the legitimacy of their funding.

Something more generally to add - there are other interested parties. A few may have missed this as it's behind a paywall, but Matt Slater (very good and reliable journalist) from the Athletic reported it and the issue being that Sarb are willing to pay well over any reasonable valuation, apparently double what other bidders are offering.

Now, was Mr Grumpy Sarbjot or Jason?

Why on earth would Sarb be willing to do that? Surely anyone would want the club as Cheaply as possible.

I once had a car for sale that nobody was interested in. Perhaps its was priced too high, was unpopular or had too many faults. Someone then emailed me and offered to pay the asking price and arrange a courier to collect the following day. The said they'd pay me the courier's fee on top. If what you say is correct, I'd be very concerned as this sounds similar.

[Wild Bill]

Assuming it isn't some kind of con/scam, there are potentially lots of reasons.

When buying a business, there are many ways of buying/funding it. It's not like a house where you just pay a lump sum in exchange for the keys. Though that is a possible method. More likely when bigger money is involved are "paper for paper" swaps, earn-outs based on future performance, etc, or a mixture of different ways. Paper for paper swaps or earn outs are always going to potentially give a higher value than a simple "cash for keys" deal.

Different buyers also have different motives, often tax-based. If the buyer is facing a big tax bill on the previous sale of a business or business assets, he may be in a rush to "buy" a business to use the proceeds to claim tax relief, or if he has high income, he may wish to buy it via a tax incentive scheme such as Enterprise Investment Scheme (or Small enterprise investment scheme) which give both income tax and capital gains tax reliefs. Such tax reliefs are often very significant, so someone may well be happy to pay more for a business because they may get, say, half of it back from tax relief/refunds, compared to someone else who hasn't got a big tax bill and won't get tax relief on buying the business. I believe it's a big motive for professional investors such as Dragons Den, Alan Sugar etc., i.e. there's a kind of "need" to buy into businesses to reduce their tax bills!

So it may well be that our fabled "local consortium" are offering a simple "cash for keys" deal and don't have tax reducing motives, hence offering half of Sarb. Whereas, maybe, Sarb's deal is "paper for paper" and maybe including "earn outs" too., all with tax relief/reduction behind it, meaning his actual "net" cost could be similar or even less than the local consortium, but with higher risks for Dellboy & Rodney as it may not be as much "upfront" cash. No one knows outside the inner circle between buyer and seller, probably not even the Board!

Very good response. Perhaps there may be some legitimacy in the purchase. We can only hope.

[KenH]

Very good response. Perhaps there may be some legitimacy in the purchase. We can only hope.

Personally, I'm on the fence, but I am swayed by Graham sounding very positive about Sarb, and after all, they must know each other well by now as he's been coming to games since early December and has been putting money into the club (which is more than Diego and Cala ever did!) so it looks like he does have money. Main problem for me is where that money's come from - I don't want the club to be built on money generated from scams or cons (cryptocurrency), or to be a money laundering front! Got to hope the EFL are checking out the source of funds properly (and of course all the solicitors and accountants involved who are likewise bound by the money laundering laws to check the source of funds is legal!).

[Wild Bill]

Yes, I think this is where we are at and these are the concerns. I suspect he may have a healthy bank balance but without published accounts showing its been earned from a legitimate source it may be difficult to get EFL approval. The EFL could be more transparent with what's been going on too.

Had the original application been rejected or did the request further evidence? What is the timeframe for a final decision and will this be made public? This is all very important to keep the fans spending money on MFC.

[BerlinWaller]

Very good response. Perhaps there may be some legitimacy in the purchase. We can only hope.

Personally, I'm on the fence, but I am swayed by Graham sounding very positive about Sarb, and after all, they must know each other well by now as he's been coming to games since early December and has been putting money into the club (which is more than Diego and Cala ever did!) so it looks like he does have money. Main problem for me is where that money's come from - I don't want the club to be built on money generated from scams or cons (cryptocurrency), or to be a money laundering front! Got to hope the EFL are checking out the source of funds properly (and of course all the solicitors and accountants involved who are likewise bound by the money laundering laws to check the source of funds is legal!).

I wouldn't read too much in to statements regarding Sarb, I have a feeling that they are being stage managed by JW and Johal. The last one issued after Sarb came to rescue after JW was unable to pay the wages confirmed it for me.

[Little Shrimp]

Yeah I wouldn't be reading too much into the statement from Graham, I'd wager that both the ones he's made have been as part of some sort of agreement for the money coming in.

The fact that Sarb have been interested since September but until the end of February at least, were not able to get documents together to prove a legitimate source of funding is massively concerning. I think it's fair to assume he has money given how intent Jason seems on forcing it through, but it's essentially a moot point if he can't prove its legitimacy to the EFL.

[Keith]

Yeah I wouldn't be reading too much into the statement from Graham, I'd wager that both the ones he's made have been as part of some sort of agreement for the money coming in.

I agree. Or, even more simply, what else can he say, other than be positive? Any negativity could sink the deal, so until the EFL decide one way or another, the club representatives have to speak positively.

I'd imagine the board are finding this incredibly frustrating too, as they will want to be planning for the future.