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The administrators of Leeds United, KPMG, has opened up the sale of the club to the highest bidder, leaving Ken Bates with a fight on his hand to retain control. KPMG has contacted a list of preferred bidders including the Leeds-based SR Morris Property Group and Redbus Group. Bates placed the League One club in administration in May and formed a new company to buy them back. Although creditors narrowly accepted the chairman's initial offer of one pence in the pound, Revenue & Customs, which is owed £7.7m in unpaid taxes, took up the option to appeal and challenged the Company Voluntary Arrangement, not appeased by a slightly improved offer of eight pence in the pound by Bates. Leeds will be able to start the new season in administration after a preliminary hearing in the High Court on Friday set a date for a new hearing of September 3rd. The worst case scenario for Leeds fans had been a fear that the Football League would not let the club start the season.
Simon Franks, the chairman of Redbus, has said that he will fight 'tooth and nail' to gain control of the club and is close to joining forces with SR Morris to prevent Bates from regaining control. 'It is an absolute travesty', Franks said, 'KPMG have asked us to submit bids by 5pm on Monday, but they are not giving us access to management accounts so we have no idea what we are bidding it. but we are not faint hearted and we will not be giving up. We want to get the club without damaging it.' Simon Morris, head of SR Morris, which proposed a £400 million package to purchase the club and redevelop Elland Road said, 'We have been contacted by KPMG and they are forwarding documentation to us. We remain very interested in bidding for Leeds United.'
Administrators KPMG are not expected to take an early decision on bids for Leeds United. It is believed that investment company Redbus and Simon Morris, a local property developer and former club director, may have come together in a consortium. Adam Pearson, the former chairman of Hull City, is also said to have put in a bid, backed by local businessman Peter Wilkinson. Ken Bates has also re-submitted his bid and has insisted that it should be the only one accepted. If another bid is accepted he is believed to be prepared to take legal action.
UPDATE: League Threaten Action Over Leeds Sale
The Football League is refusing to sanction the resale of Leeds United to Ken Bates and has launched an inquiry into the handling of the club's affairs by KPMG, its administrator. So angry is the League over KPMG's conduct that it is ready to take the matter to court and sue for breach of duty. The League said that it had failed to receive required documents and assurances from KPMG over Mr Bates's proposed second takeover. The League said that, without evidence to back the Bates offer, it was unable to transfer Leeds's 'golden' share which gives the club the right to play in the League. Nor would it do so until the Revenue's legal proceedings were resolved. Sources close to KPMG said that it was not obliged to pass documents to the league but the club had now done so. The League's dispute with KPMG is developing into a trial of strength, with insiders at KPMG claiming that without its prompt actions the club would be in liquidation by the start of the season. But the League believes that KPMG has acted with undue haste and there was nothing to stop the club from beginning the new season under administration.
Ken Bates won out against three other contenders in a new round of bidding for Leeds United. He is thought to have been prepared to offer creditors 13p in the pound. A consortium of investment company Redbus and local property developer Simon Morris is thought to have offered 30p. So too, it appears, did Adam Pearson, the club's former commercial director. The identity of the fourth bidder has not been disclosed. Mr Bates still managed to win because Astor, the largest of the creditors, told KPMG that it would waive its debts only if Mr Bates won the auction. Leeds MP Colin Burgon said that the case raised issues about football governance: 'Many of us now are looking seriously at the role of companies registered abroad, but having a decisive role in football clubs in Britain.' Ken Bates invoked the memory of Iraq's executed former dictator, Saddam Hussain, to justify the fact that he was still in charge. 'Ninety-nine per cent of the letters and e-mails are supporting us', he said. 'That's as good as Saddam Hussein did and he was fiddling the figures.'
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