Hornets' High Court battle: Football financier 'turned blind eye to rules breach', judge told (From Watford Observer)
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Football financier behind Watford FC loans, Nigel Weiss, 'turned blind eye to rules breach', judge told
The football financier behind the Watford FC loans, which were later found to be in breach of Football League regulations, knew former Hornets owner Laurence Bassini was “up to no good”, according to the club’s barrister.
At the High Court battle over the funds, Nicholas Randall QC said Nigel Weiss “deliberately turned a blind eye” when Mr Bassini asked him to hide the transactions from the Football League.
However Mr Weiss, whose company Good For Sport helps football clubs with specialised financial “products”, argued at the time he did not feel the transactions breached the regulations.
Watford FC’s legal team argued Mr Bassini did not have the authority as a director to make the deals as he was not acting in the best interests of the club.
Taking the stand on Monday and into Tuesday, Mr Weiss told the court he met with Mr Bassini in July 2011 for a general discussion as “he was keen to have a number of different forms of financing” for the club.
They then started work on a form of financing called “forward funding” where the club would be loaned cash ahead of payments due to it.
The initial transaction was based on money due to Watford FC from the £3.5 million transfer of Danny Graham to Swansea. At the time the Welsh club still owed the Hornets around £1 million for the striker.
The judge was told Mr Bassini later said he also wanted to include cash coming from the Football League pool money in the forward funding deal.
Mr Weiss told the court he helped line up LNOC, a company owned by Nicholas and Lesley Francis, as funder for the transactions.
Emails read out in the court showed Mr Weiss had reminded Mr Bassini and his advisor, Angelo Barrea, they needed Football League approval for the Danny Graham future financing deal.
According to the Football League hearing over the breaches, LNOC paid £951,041 to Mr Bassini’s company Watford FC Limited on September 21, 2011 in relation to the Danny Graham money, and were due £1 million in return.
Danny Graham in action for the Hornets against Swansea, who he later joined for around £3.5million.
Repayment was meant to be made directly from Swansea to LNOC and a letter and promissory notes were drawn up and held “in escrow” by third party Mr Weiss. They were to be released to the Football League if Watford defaulted on the payments. This breached Football League Regulations 44.2 and 48.1.
A similar loan agreement was devised for the Football League pool money.
The Football League hearing heard LNOC paid £1,660,596 to Watford FC Limited on September 26, 2011 and expected £1.8 million in return.
Mr Randall said there was nothing unusual about the transactions until September 19, when Mr Bassini had a conversation with a Football League solicitor who told him forward funding was not allowed in relation to pool money, which breached Football League Regulation 19.
He was told the club was heading for a transfer embargo if it went ahead with the forward funding deal in relation to the pool money.
Questioning Mr Weiss on Mr Bassini’s reaction to the conversation, Mr Randall said: “I think in your words ‘he went ballistic’. Can you recall what he (Mr Bassini) said?”
Mr Weiss replied: “He was annoyed because the Football League said they may impose a transfer embargo. He did not think that was acceptable. He said he wanted the funds quickly as he had promised a payment to a contractor and that I should find a method of financing that did not involve the Football League.
“He said to me he thought the reason they (the Football League) wouldn’t allow him to go ahead without a transfer embargo is they didn’t want him to be director of the club when he took it over. He formed the opinion, rightly or wrongly, they were trying to make life difficult for him.”
Mr Weiss said following the conversation, no changes were made to the documents regarding the transfer funding, just that they were not sent to the Football League. He said this was not a breach as there was no formal process for declaring the transaction.
Mr Weiss said it was agreed with Mr Bassini the money would be repaid early so there would be no need for other parties to be alerted to the transaction. However the money was not repaid to LNOC and the Football League then learned about the transactions.
Former Watford FC owner Laurence Bassini.
Later Mr Randall said: “You knew Mr Bassini was up to no good when he wanted you to hide this transaction.”
Mr Weiss replied “That’s not true. Even in the restructured deal we completed notification to the Football League.
“All we were doing was giving him some time as he had fallen out with the Football League and believed they would do anything to obstruct him.”
Mr Randall argued the forward financing deal relating to the Football League funds was in breach of the rules as it was an “assignment” of the club’s incoming money to another party.
Mr Weiss, a Cardiff University law graduate who had a successful career in the City, said at the time the deal was drawn up it was an “inchoate [uncompleted] assignment” and would only become an assignment of funds if the agreement was breached.
Mr Randall later argued: “What I suggest to you is Mr Bassini told you on the 19th he wanted the matter kept from the Football League, to avoid the relevant sections, and you knew that was outside his capacity and authority as a director, and clearly not in the interest of the club.
“You did not ask him any questions at all to ascertain what the true position was even though you knew he was going to embark on this reckless and dangerous course of action. You deliberately turned a blind eye.”
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