September 25, 2020

Fears grow over Coventry City FC going bust as Cayman Islands link revealed

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Fears that Coventry City could be close to going bust are growing – following a Telegraph investigation into owner Sisu’s offshore business dealings in the Cayman Islands.

Our investigation has prompted Coventry City Council leader John Mutton to call on the football club’s hedge fund owners to be fully “open and transparent” if it wants to lodge any serious bid for a half share of the Ricoh stadium and surrounding development land.

We investigated a business arrangement set up by Sisu in March, which appears to give first call on any of the football club’s existing or future assets to a Cayman Islands operation – called Arvo Master Fund Ltd.

In response to our questioning, Sky Blues chief executive Tim Fisher said Arvo was now the investor in Coventry City Football Club, which is propping up its finances.

The Arvo “debenture” examined by the Telegraph – effectively a mortgage arrangement – was lodged with Companies House in March 19 and lists assets as security against lending by Arvo – down to the last grass mower and gym equipment at the club’s Ryton training ground.

Crucially, it also lists as “fixed security” any property the Sky Blues acquires in future.

Coun Mutton said our findings added to his concerns that, if Sisu was to acquire half of the Ricoh stadium company, it could be used to pay off Sisu and its investors – rather than supporting the struggling football club’s finances.

Brendan Guilfoyle, a leading UK expert in football finance and an insolvency practitioner, claimed our findings alongside other recent developments all suggested Coventry City could soon be heading for administration – unless a Ricoh rescue deal is struck quickly.

But Coun Mutton has re-iterated the council is in no hurry, and would want to go through Sisu’s business dealings, and any future business case, with “a fine-toothed comb”.

Mr Guilfoyle, who has previously been appointed administrator for Leeds Utd, Crystal Palace, Luton Town and Plymouth Argyle, added: “Hedge funds are routinely domiciled in the Cayman Islands for the purposes of tax minimisation and to retain a higher level of confidentiality.”

Coun Mutton said such concerns would be fully examined by the city council and its lawyers, in taxpayers’ interests, “if Sisu were to put forward what looks like a viable business case”.

On March 19, a company called Arvo Master Fund Ltd, based in Grand Cayman, Cayman Islands, registered debentures against the Sky Blues operating company and its holding company to secure amounts owed to it by the Sky Blues.

Read More: www.coventrytelegraph.net/news/coventry-news/2012/05/23/fears-grow-over-coventry-city-going-bust-as-cayman-islands-link-revealed-92746-31025287/#ixzz1vhhq5UKY

Note: Coventry City Football Club is an English football club based in Coventry. Nicknamed the Sky Blues owing to the colour of their strip, Coventry City were formed in 1883 as Singers F.C., and they joined the Football League in 1919

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