Is 'Fit and Proper' fit for purpose?

Since 2004, the FA and Premier League have introduced a ‘Fit and Proper Persons Test’, which anyone owning over 30% of any football club under the FA’s jurisdiction has to undertake. This is intended to ensure that any businessperson taking over, or heavily investing in a club has the correct credentials to do so.

The original test’s rules are:

A person shall be disqualified from acting as a director and no club shall be permitted to have any person acting as a director of that club if:

· Either directly or indirectly he is involved in or has any power to determine or influence the management or administration of another club or Football League club
· Either directly or indirectly he holds or acquires any Significant Interest in a club while he either directly or indirectly holds any interest in any class of shares of another club
· He becomes prohibited by law from being a director
· He is convicted on indictment of an offence set out in the Appendix 12 Schedule of Offences or he is convicted of a like offence by a competent court having jurisdiction outside England and Wales.
· He makes an Individual Voluntary Arrangement or becomes the subject of an Interim Bankruptcy Restriction Order, a Bankruptcy Restriction Order or a Bankruptcy Order
· He is a director of a club which, while he has been a director of it, has suffered two or more unconnected events of insolvency
· He has been a director of two or more clubs or clubs each of which, while he has been a director of them, has suffered an Event of Insolvency

So basically, you can’t own over 30% of a club if you’re financially involved with another club, banned from running a business, declared bankrupt or guilty of one of the criminal offences the FA has listed (the part about Appendix 12) in their rulebook. You can have run other businesses into the ground, as long as they weren't football clubs.

Last week, the first person failed the test. The ‘winner’ was Stephen Vaughan of Blue Square Premier side Chester City. Vaughan has admitted taking part in a £500k VAT fraud. He now has 21 days to reduce his 100% stake in the club to 30% or they could be expelled from the league.

Some people are viewing Vaughan as something of a sacrificial lamb. This is because some of the people who have passed the ‘fit and proper persons’ test have been accused of horrific crimes.

In the close season the current tests were improved upon after they were much maligned for passing former Manchester City owner and Thai PM Thaksin Shinawatra. Shinawatra has been accused of corruption, embezzlement, fraud and human rights violations. The Human Rights Watch describes Shinawatra as ‘a human rights abuser of the worst kind’. He was declared a ‘Fit and Proper Person’

Another person to pass the test was former Portsmouth owner Sasha Gaydamak. There is nothing to suggest that he has done anything that would violate the test conditions personally, but there were questions about where his money was coming from that were never totally answered.

The suspicion was that Gaydamak’s father Arkady Gaydamak had put the money up. This would be a huge problem as he has been convicted, in absentia, of arms trafficking in the Angola Civil War.

A group called Munto Finance bought Notts County in the summer of this year. It’s still not exactly clear who they are exactly, where their money has come from, and crucially, where the money is going to. Remember, this is the club that signed Sol Campbell, got Sven Goran-Eriksson on board and persuaded Kasper Schmeichel to drop down to League Two from Manchester City.

Now County have informed the Football League of who their owner (or owners) is/are. County’s chief executive Peter Trembling “wishes to re-iterate that at all stages we fully co-operated with the Football League,” which isn’t necessarily compatible with the League’s view that they were only “in a position to confirm” their satisfaction with what is going on at Notts County “following greater co-operation from the club more recently”

The Football League isn’t talking though, due to Data Protection laws and County aren’t making it public, so we may never know who’s in charge. Two candidates have been outed by the media but one of them has denied any involvement in the club. County have complained about the press speculation, but it shouldn’t be a surprise if they’re not giving any information out.

Most fans of clubs whose ownership is not all that clear are not concerned about where the money is coming from. Sven-Goran Eriksson has said, “Money comes in and everything is good,” he proclaimed, adding: “I don’t know where the money comes from and I’m not interested in that. The important thing is that the money comes”. Many fans would agree with him.

While I’m not condoning Stephen Vaughan’s crimes, tax evasion is a serious matter, to punish him for that whilst allowing others, with equally or more serious allegations, to pass does seem unfair.

Where things could get interesting is that Vaughan may be able to just sign the shares over to his sons, which would render the rules a bit pointless as they would carry no real weight. He would have to show the FA he was not ‘directly or indirectly’ involved in the running of Chester though. Also, if Flavio Briatore of Queens Park Rangers fails to get his ban by Formula One’s governing body the FIA overturned; he would no longer be a ‘fit and proper person’. Briatore has said he will sue if forced to give up his stake in QPR.

We were promised a tougher version of the test this season. This includes more criminal offences being added to the list of offences that would exclude someone from running a club and forcing clubs to name all shareholders who own 10% of a club. The FA’s Chairman Lord Triesman, has called for even ‘more robust’ testing to be done, calling for complete transparency by clubs and to stop the process of the FA and then the Premier League of Football League, depending on the club involved doing separate tests.

These new rules have passed Sulaiman Al-Fahim as Portsmouth owner. He was forced to sell the club 41 days later because he didn’t have the money Portsmouth needed to pay transfer money and taxes owed, as well as player wages. It seems that though the Premier League looked into his past, they didn't look to see if he had the means to run Portsmouth.

Until the FA are finally in a position to stand up to the Premier League and Football League, Lord Triesman’s ideas of total transparency in terms of ownership seem to be wishful thinking.