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Jimmy Russo: £3.6m Bassini cash were loans to help Watford FC
The Russo brothers have argued that £3.5million they transferred to Laurence Bassini’s lawyer weeks before he bought Watford FC was an interest-free loan meant as a “working capital facility” for the club.
Taking the witness stand at the High Court this week, former Hornets chairman Jimmy Russo said the money was meant to be held by Mr Bassini’s solicitor, Angelo Barrea, and not accessed without his permission.
The Italian businessman said he was later annoyed to find the money had been released days after it was transferred in February 2011.
Mr Russo’s testimony came at a trial this week as he and his brother Vince sue Mr Bassini for a total of more than £3.6 million they say they loaned him before and during his reign at Watford FC.
Mr Bassini denies the money was loans and claims it was the cost of the Russos secretly becoming joint owners of the club.
During his evidence, Mr Russo, who runs a salad company with his brother, also said £135,000 transferred to Mr Barrea in April 2011 was requested by Mr Bassini to help with “cash flow” problems at Watford FC.
He maintained they were simple loan deals and not part of a “sham” to help him secretly gain 50 per cent ownership of Watford FC.
He also told the judge a later agreement to add interest to the sums in April 2012 came about as Mr Bassini had not made any repayments. Mr Russo said by this time he was getting “incredibly suspicious” about Mr Bassini as he believed around “£10 million” had come into the club in transfer and other fees.
During the hearings, the judge was told during winter and autumn of 2011 Mr Russo had provided “sham” letters making offers for Watford FC, valuing the club at first £20million and then £25million.
Mr Russo said these letters had been requested by Mr Bassini to help him get a better price from prospective buyers for Watford FC. He said he had provided them as he was becoming desperate to get his money back.
The court heard the Russos, Mr Bassini and their representatives first met around Christmas 2010 and had a series of meetings in January 2011 about the Stanmore businessman’s ambitions to buy Watford FC.
Mr Russo said the meetings came about as a friend had “strongly recommended” Mr Barrea to him. “He said he [Barrea] was an upstanding citizen,” said Mr Russo. “In the Italian community if you get a recommendation you usually think this is okay.
“But it wasn’t okay. He gave me many assurances he had worked with the defendant (Mr Bassini) through his divorce and the defendant was a good guy and had a family trust of £100 million.
“I took comfort in that trust. He said he could not access the trust of £100 million. The defendant later stated it was not true and that he didn’t have a family trust of £100 million.”
Mr Russo later added about Barrea: “I found Mr Barrea a very interesting character. He is one of those guys you can ring on many occasions and he will very rarely pick up the phone and when you do ring him on occasion you can’t leave a message as his voicemail is full up. I would say he is the most disorganised individual acting as a lawyer I have ever met. One time he came to my house and his road tax was out of date by eight months.”
The court was told the Russos’ due diligence research on Mr Bassini came up with little more than that he had previously been bankrupt and changed his name from “Bazini”.
Former Watford FC owner Laurence Bassini.
The court heard throughout January 2011 the parties negotiated and later three documents were produced for the deal. A loan agreement for the £3.5million, a deed of trust that said Mr Bassini would hold 50 per cent of shares for the Russos in trust, and a share purchase agreement.
Giving evidence, Robin Williams, the secretary of the Russos’ company Valley Grown Salads, who conducted their negotiations, said they rejected the idea of holding shares in trust due to financial advice they received.
He said the deed of trust was a comfort document that meant if Mr Bassini did not repay the loans they would be recouped from sale proceeds if he sold Watford FC.
Mr Crystal later pointed out the £135,000 the Russos lent to Mr Bassini was the same figure they received in the buyout from their shares in Watford FC’s former parent company, Watford Leisure PLC. He suggested this was because they were really joint owners of the club with Mr Bassini and squaring the deal.
Mr Russo said that was not true and the money had been requested by Mr Bassini as the club was at that time struggling financially and he knew the Russos had just received the sum.
He added: “I learned he (Mr Bassini) had done very little due diligence and he said to me it was a lot worse than he had thought. I would say he had very little comprehension about the mechanics of how that industry (football) works.”
When questioned about why he had supplied Mr Bassini letters on Valley Grown Salads paper, making sham bids for the club, Mr Russo said: “I was always looking for the recovery of my loans. That was paramount.
“Laurence had contacted me. He was excited and said ‘I might have a buyer for the club’. He had previously said to me he could sell the club 100 times over. He said I need you to write to me a letter to leverage the price.”
The court heard in April it was agreed by Mr Bassini and Mr Russo that interest of 5 per cent should be paid on the two sums loaned.
Mr Crystal produced emails between Mr Russo and Mr Williams discussing the fact HM Revenue and Customs had queried loan transactions on the Valley Grown Salads balance sheet that same month.
Mr Crystal said: “I will suggest the basis of the query was that HMRC did not accept these (the Bassini loans) were proper loan transactions.”
Mr Russo said he employed an accountant to deal with that side of the business but usually he had multiple loans on his balance sheet as he advanced cash to produce growers.
Watford FC striker Marvin Sordell was sold to Bolton Wanders in 2012.
He added: “Let me explain. The January (transfer window) came and went and the club in the last day of the window sold Marvin Sordell – I understand for £3 million. Now I am thinking to myself they can start to repay my loan. But Mr Bassini decided to speak about rearranging the loan and as a form of appeasement he offered to pay me interest, which he did.
“During that period of Mr Bassini’s tenure at the club I was getting incredibly suspicious as I believe circa £10 million came in the club through transfers.
“There was Marvin Sordell and Danny Graham [for £3.5 million]. There was a million for that lad [Will Buckley] who went to Brighton, there was money paid for a sell-on clause for Ashley Young, which I believe was for about £1.4million, and there was around £600,000 compensation paid by Cardiff for the services of Malky Mackay.
Former Watford FC manager Malky Mackay with his then assistant Sean Dyche.
“And the defendant could not pay any money back and wanted to pay interest as appeasement and wanted to pay me back when the club was sold.”
The judge is due to return is judgement on the case in the next few weeks.
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