New share probe at Chelsea

Nick Goodway|Patrick Sawer|Evening Standard

13 April 2012

The takeover of Chelsea football club is today at the centre of a major financial probe.

The City's top watchdog has launched an investigation into the ownership of Chelsea Village, the company which owns the soccer club.

The scale of the probe is said to be unprecedented.

This comes on top of an inquiry into possible insider dealing immediately before the £140 million takeover agreed between Russian billionaire Roman Abramovich and chairman Ken Bates.

The Financial Services Authority told the Stock Exchange today that it had been tipped off by a number of sources over some of the shareholdingsin Chelsea Village. There has always been a mystery about who actually owned the nine companies which agreed to sell their shares to Mr Abramovich, giving him a 50.1 per cent holding.

Mr Bates today angrily rejected any accusations of wrongdoing, claiming the FSA was acting on "rumour and innuendo" and should withdraw its statement.

He said the Chelsea sale was a "done deal" and accused parties who had been unable to match Mr Abramovich's offer of spreading rumours. The FSA and the Takeover Panel are investigating the relationship between the nine companies which make up a complex web of offshore trusts.

The FSA has the powers to levy unlimited fines and can launch criminal prosecutions.

The FSA said it is " conducting inquiries into the nature and status of certain shareholdings in Chelsea Village".

Today's probe, said the authority, "follows the receipt of information from a number of sources suggesting that the publicly disclosed shareholdings of certain parties may have been inaccurate".

The FSA said it was " concerned that as a consequence the market may have been misled as to the true nature of the ownership of Chelsea Village plc". The watchdog, headed by Sir Howard Davies, added: "The FSA attaches great importance to the timely and accurate disclosure of information to ensure that markets operate in an efficient, orderly and clean manner."

The City regulators today made it clear that the probe would not have any effect on the takeover by Mr Abramovich.

The Russian oil tycoon has already financed a £36.5 million spending spree on players.

Speaking from a hotel in Malaysia, Mr Bates told the Standard: "When Chelsea went public in 1996 both the Stock Exchange and the takeover panel were satisfied with the information provided to them, otherwise it would not have

taken place.

"The FSA made inquiries over a year ago and raised no objections or questions at that time, nor have they since. I believe they are running a wild goose chase based on anonymous troublemakers."

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