The Solicitors Regulation Authority will examine this week’s damning Premier League report on Manchester City and investigate any potential solicitor misconduct as more information is made public.
An independent commission found the football club guilty of all charges related to serious breaches of the league’s financial rules over a nine-season period, a decision that will have far-reaching consequences for sports governance. The commission found that City arranged ‘sham’ contracts with several commercial partners and sponsors which were part of a disguised funding scheme. The remainder was funded by Abu Dhabi United Group Investment & Development Ltd (ADUG), which owned the club.
Premier League rules limit how much money clubs can spend on their squads.
Manchester City’s top lawyer was, for a brief period, a director of one of the companies found to be ‘little more than a front’ for the football club’s owner to hide its true investment, it has emerged. The commission’s redacted ruling refers to ‘Project Longbow’, launched in the third quarter of 2012 to explore how the club might boost its revenues and reduce its operating losses. While many strands of Project Longbow were legitimate attempts to achieve those aims, the commission found that the so-called Fordham Arrangement was not.
In essence, this was a ‘closed-circle’ arrangement entered into by the club with a third party called Fordham, ‘which in reality was little more than a front for ADUG’. The owner’s funds were used to enable Fordham to acquire from the club ‘at a sizeable, artificially inflated price’ the club’s entitlement to benefit financially from its players’ image rights. The Fordham Arrangement was a device by which ADUG funds could be paid into the club ‘in a manner that concealed their true origin and which enabled the club to pretend that such funds represented operating income in its financial statements’.
The part of the ruling identifying who knew about the reality of the Fordham Arrangement is redacted, as is the list of individuals who approved it. These are both included in an appendix to the ruling that has yet to be published.
Fordham refers to a company now known as Fordham Sports Image Rights Ltd, which was called Manchester City Football Club (Image Rights) Ltd from October 2012 to July 2013. Companies House records show that Simon Cliff was appointed a director of the company in June 2012 and remained in that position until July 2013.
Cliff, admitted as a solicitor in 2002, was general counsel for Manchester City Football Club from 2009 to January 2013 and is now general counsel for the City Football Group, which is the club’s parent company and owns a stake in other clubs across the world. There is no suggestion in the commission ruling that Cliff is one of the names redacted or that he had any knowledge of the Premier League rule breaches.
Cliff has previously been named in media coverage of investigations into Manchester City. German news magazine Der Spiegel reported in 2018 that Cliff had coined the term ‘Project Longbow’.
The Solicitors Regulation Authority is understood to be monitoring the situation and will examine the unredacted ruling when it is published. A spokesperson said: ‘We will be considering the content of the Premier League’s report to see if there are any issues arising which we need to look into further. If, and where, we identify any suggestions of potential misconduct by solicitors or law firms, we will consider them carefully before deciding on potential next steps.’
It has also been suggested that City could be forced to pay the Premier League £50m in legal costs.
In a statement, Manchester City said: ‘The club is innocent of the accusations made by the Premier League and a comprehensive body of irrefutable evidence exists in support of all of its positions, relating to this case. The club will therefore be relentless, and where necessary proactive, in any and all appropriate regulatory and legal forums. The Premier League process remains ongoing, with significant elements uncompleted. Manchester City FC will now pursue the appeal avenues open to it, on the basis that the opinion contains clear material errors of law, principle and fact, and is unsafe.
‘The club has diligently respected due process for eight years on the basis that the Premier League board and executive would behave as an independent, impartial and fair-minded regulator, free from partisan influence.
‘The club is obviously restricted in what it can say further until all future proceedings are complete.’
