EFL Verdict

[Spanish]

Just now, Ghost of Clough said:

Which screams incompetence from those at the EFL.

Not just that that they "didn't get it" but because it took 3 years for them to notice, despite the noise from the likes of KM.

The terminology (residual values) and finer details (6 monthly reviews) were off and we may not have been certain. But, we 'got it' on this forum before they even started looking at it prior to the charge.

Yep really odd we all got it and the so called professionals didn’t 

[ck-]

54 minutes ago, Spanish said:

The way in which the treatment was explained in the accounts was misleading and wrong

There's a difference between the way in which it was explained being wrong and it actually being wrong.

So I think it's not really in dispute that our explanations were less than clear. And for that we're rightly (IMHO) punished.

But then, the separate point is whether that accounting treatment is WRONG as opposed to just not what EFL would like. There is a lot of evidence that it isn't wrong from an accounting practice, although our implementation of it may have been poor as we apparently couldn't show any systematic approach to valuations.

So, moving on to the EFL position: it isn't unreasonable, because the purpose of their rules is to ensure everyone is judged by the same criteria. If we had clearly explained what we were doing, they might have been able to say "OK, it's not against the rules, but that's not what we intended. We're going to amend the rules for next year".

We can argue that the EFL should have checked our submission, but they'd only have cause to do that if we had actually given them a reason to do so. Otherwise there is an element of trust in place.
 

In short, we tried to be too clever, and while there is nothing accounting wise that is wrong, in a competition that is trying to create a level playing field we stretched things too far and didn't signpost it well enough.

I don't think either party is coming out of this too well.

[BramcoteRam84]

2 hours ago, kevinhectoring said:

Angie Ram Angie Ram

there are 2 versions of this, one comes from the DC, one from the LAP. One version is: the EFL had no clue what was going on with our accounts and that’s the fault of the EFl. That version was (sort of) supported by the DC. The other version is: the EFL had no clue what was going on and that was because they were misled by the club. That was where the LAP ended up. 

what is not in doubt is that the EFL did not understand what we were doing. They hadn’t even ‘got it’ days before the DC hearing. So the suggestion they approved what we were doing is cloud cuckoo land. 
 

unfortunately the evidence indicates we misled them. Our auditor basically admitted the notes explaining the changes were non-compliant. An accident? Perhaps. This led to the DC finding us ‘guilty’ on a minor count. More troubling is that when the club was asked to disclose documents relating to the accounting issue, they claimed to have none - this was clearly incorrect and the word mincing LAP did not mince their words on this. They called us liars. 
 

We are very far from squeaky clean. 
 

I am guessing that I love our club just as much as you do. But the blind loyalty shown on this forum is foolish, not least because the club’s decision makers keep an eye on what we all think about these things. And the fans’ support of the club’s foolish squabble with the EFL perpetuates it. We will do better next season if we stop this fighting with them and focus on the squad and the pitch. 
 

it all comes back to Mel. He has spent a lot of his money to find that the deck is stacked against him, that the system is unfair. So he has pushed the envelope. We should thank him for that. But it has not worked so we need to take our medicine and focus on next season (in the championship). 
 

 

No one is saying we are squeaky clean. We have bent the rules and we have got a sanction. What’s the correct punishment to fit the crime? If we submit our accounts and are within the spending limits we haven’t gained an advantage. So on that basis why should we be further penalised.

The fair and just way to proceed here is for the EFL to accept the sanction, and if on re-submission we’ve breached spending limits then we should be deducted points. At that point blame should be very much pointed at Mel and Stephen Pearce on this specific issue. But right now it seems like a witch hunt and we continue to be put at a disadvantage to our competitors by the actions of the EFL.

Yes there are many things Mel needs to answer for but on this the EFL are bang out of order so far. 

[Rev]

I also think the £100k will be the end of it.

The EFL get their win, we accept our punishment, the dual fixtures show the EFL would love to pursue it, but no one wants this hanging over the first post Covid season, so let's all move on.

[kevinhectoring]

1 hour ago, JfR said:

Can you point to this bit in the document? If I'm looking at the correct section (Section S), I read it differently to how you have. My interpretation is that the LAP do seem to accept that there are no documents formally evidencing the club's approach to ascertaining an ERV, but are critical of the non-existence of these documents. Their position, as far as I can see, is that this gave the EFL sufficient grounds to believe that the Club's approach was not "reliable and systematic", and that, had they been asked to hear the case de novo as the EFL requested, they may have come to a different conclusion to the original DC. However, the important thing to remember is that the the LAP declined the EFL's request to have the hearing held de novo, and that the original DC's decision on any factor that isn't overturned still stands as the definitive conclusion. Indeed, the LAP sets out the reasons for why this should be in their decision to decline the EFL's appeal to have the hearing held de novo. 

I think we are on slightly different points. I was on about disclosure and I was talking about this statement below. What the LAP is saying here (in their prissy code) is: it is inconceivable that the club has no documents relating to the accounting treatment. But they claimed they did not and that was a porky pie.

28. The DC made disclosure orders in relation to documents in the Club’s control relevant to the accounting treatment. However, the Club did not produce a single document evidencing or relating to the accounting treatment adopted and confirmed that none existed.

[Steve How Hard?]

4 minutes ago, Rev said:

I also think the £100k will be the end of it.

The EFL get their win, we accept our punishment, the dual fixtures show the EFL would love to pursue it, but no one wants this hanging over the first post Covid season, so let's all move on.

I think you may be right. They did a similar thing with Birmingham if my memory serves me right. Pursued it until they got the moral high ground. My only concern is that they do seem more vindictive with us. 

[Rev]

2 minutes ago, Steve How Hard? said:

I think you may be right. They did a similar thing with Birmingham if my memory serves me right. Pursued it until they got the moral high ground. My only concern is that they do seem more vindictive with us. 

I think that concern may be soothed by possible new owners that the EFL are in dialogue with.

[kevinhectoring]

14 minutes ago, Ghost of Clough said:

Which screams incompetence from those at the EFL.

Not just that that they "didn't get it" but because it took 3 years for them to notice, despite the noise from the likes of KM.

The terminology (residual values) and finer details (6 monthly reviews) were off and we may not have been certain. But, we 'got it' on this forum before they even started looking at it prior to the charge.

I'm sure you 'got it' before the EFL because it's your club and you're all over the numbers. Quite a different question is whether the EFL has the responsibility or the manpower to check the methodology underlying the numbers (which are presumably pulled from the audited accounts). I don't know the answer to that question 

[Steve How Hard?]

8 minutes ago, Rev said:

I think that concern may be soothed by possible new owners that the EFL are in dialogue with.

I hope you're right but that just proves their vindictiveness. We should be dealt with the same, regardless of who our owner/onwners are. They(the EFL) will hopefully self implode one day. 

[Topram]

22 minutes ago, Rev said:

I think that concern may be soothed by possible new owners that the EFL are in dialogue with.

Are any new owners in talks with them though?

[jono]

12 hours ago, Spanish said:

3 lawyers and a professor are probably better than me and maybe you. We might as well close this thread down if that is all you have.

The only expert before the DC was Professor Peter Pope, who is a Professor of Accounting at Bocconi University in Milan, and an Emeritus Professor at the LSE.  Not one to be dismissed in such a manner

Look I'm not arguing their case but I feel there is too much blinkered EFL are totally at fault approach by some posters who clearly haven't bothered to read the findings.  I keep going back to the LAP and DC deliberations and find something I have missed or forgotten every time.   Here is another gem that you might want to dismiss as they are merely the ramblings of 3 lawyers and a professor;

18.22 Amortisation begins when the intangible asset is available for use, ie when it is in the location and condition necessary for it to be usable in the manner intended by management. Amortisation ceases when the asset is derecognised. The entity shall choose an amortisation method that reflects the pattern in which it expects to consume the asset’s future economic benefits. If the entity cannot determine that pattern reliably, it shall use the straight-line method.”

we are slowly running out of options.  The EFL have run the figures and tried to admit them to the LAP so there must be some risk that the straight line method will breach.  I hope not and all this has been a terrible dream but I am not convinced that the corporate governance at our historic club has been particularly first class.

I've no axe to grind with fellow members of the forum and I really enjoy debating the facts as I see them.  Eyes wide open not blinkered

I think the issue over amortisation is somewhat a joke. There is no perfect amortisation procedure for anything at all. Only that which is agreed between parties or as specified in a set of rules. Write down machinery, tooling, company vehicles, your personal lap top or player values. It doesn’t matter whether it’s 25% Pa level or some sort of graduation or funny maths. Thing is you just have to agree a system. This isn’t an empirical formula governed by the rules of physics. It’s a specification .. you either meet it or you don’t, or as seems to be the case here, the allowed procedure wasn’t clear or unequivocal. Did we exploit this or were the rules badly drawn ?  .. now that’s a valid question 

[Gee SCREAMER !!]

39 minutes ago, kevinhectoring said:

I'm sure you 'got it' before the EFL because it's your club and you're all over the numbers. Quite a different question is whether the EFL has the responsibility or the manpower to check the methodology underlying the numbers (which are presumably pulled from the audited accounts). I don't know the answer to that question 

If such draconian measures are attached to any deviation from policy, it most definitely needs to be their responsibility and definitely shouldn't be revisited after 3 years. A firm and direct policy as to calculation should also have been in place from the get go.

[i-Ram]

1 hour ago, ck- said:

There's a difference between the way in which it was explained being wrong and it actually being wrong.

So I think it's not really in dispute that our explanations were less than clear. And for that we're rightly (IMHO) punished.

But then, the separate point is whether that accounting treatment is WRONG as opposed to just not what EFL would like. There is a lot of evidence that it isn't wrong from an accounting practice, although our implementation of it may have been poor as we apparently couldn't show any systematic approach to valuations.

So, moving on to the EFL position: it isn't unreasonable, because the purpose of their rules is to ensure everyone is judged by the same criteria. If we had clearly explained what we were doing, they might have been able to say "OK, it's not against the rules, but that's not what we intended. We're going to amend the rules for next year".

We can argue that the EFL should have checked our submission, but they'd only have cause to do that if we had actually given them a reason to do so. Otherwise there is an element of trust in place.

In short, we tried to be too clever, and while there is nothing accounting wise that is wrong, in a competition that is trying to create a level playing field we stretched things too far and didn't signpost it well enough.

I don't think either party is coming out of this too well.

A good, well reasoned post. It’s unlikely to be noticed.

[Eddie]

1 hour ago, i-Ram said:

I don’t think too many people look to self harm on a pedestrian crossing?

It's not a black and white matter.

Oh, wait...

[The Scarlet Pimpernel]

Is there a time limit on any appeal? 

[hintonsboots]

27 minutes ago, The Scarlet Pimpernel said:

Is there a time limit on any appeal? 

48 hours ?

[RadioactiveWaste]

28 minutes ago, The Scarlet Pimpernel said:

Is there a time limit on any appeal? 

There will be, but I don't think that's been communicated yet, that'll be stated in the report when it is released.

 

[JuanFloEvraTheCocu'sNesta]

The EFL will 100% appeal, if only to save face with the clubs that have already decided we are worse than fascists.

If they don't appeal the rent-a-gob's from Boro and Wycombe will be on at them asking why, so they'll cave in and appeal regardless of if they actually want to or expect anything to change.

Edited June 27, 2021 by JuanFloEvraTheCocu'sNesta

[RadioactiveWaste]

Just a hunch,

But,

Suppose the EFL appeal, could the LAP rule a deduction (say 3 points) suspended pending any breaches due to the restated P&S figures?

[B4ev6is]

39 minutes ago, JuanFloEvraTheCocu'sNesta said:

The EFL will 100% appeal, if only to save face with the clubs that have already decided we are worse than fascists.

If they don't appeal the rent-a-gob's from Boro and Wycombe will be on at them asking why, so they'll cave in and appeal regardless of if they actually want to or expect anything to change.

Since efl failed twice oh I know let try a third once found not guilty first time that should be it and they cant go back.