[Archived] 40 Venky's Premises raided by Indian Tax Officials

[Bigdoggsteel]

A lot of talk on Twitter this morning that venkys are on the way out. Please be true... 

[sjsbrfc]

Just now, Bigdoggsteel said:

A lot of talk on Twitter this morning that venkys are on the way out. Please be true... 

None on my timeline. What's being said?

[Claytons Left Boot]

Just now, AAK said:

Myers said it's interesting two accountancy firms have come in as that's usually due diligence for a takeover. Said that fits in with what he's been told, a Chinese consortium have made a bid for the club.

If that's the case, we'll need a figurehead as the manager, someone like....well, Kenny Dalglish......some good people to run the show......well, like John Williams and Tom Finn. Now, have Southampton a good, up and coming striker......?

[Dunnfc]

Would love it if Salgado had clubbed a team together 

[Kamy100]

I could be completely wrong but my feeling is that this is has nothing to do with administration.

I think that they do not trust the people that they have employed to give them the best financial advice so they have hired the experts to come in, have a look and then provide them with advice on how they can take things forward.  The other scenario is that they are getting professional help to sort out the books so that if they sell the club the due diligence period can be more straightforward then it would be if the financial documentation side of the business is a complete mess.

[Roverall]

Well if the Bank of India instructed KPMG to go in then it can't be Venkys sudden desire for excellence and professionalism on the financial side of things.

[Bigdoggsteel]

Just now, sjsbrfc said:

None on my timeline. What's being said?

Basically that the auditors have not been sent for a purely accounting function. This would make sense as I don't see why they would spend close to a million pounds to just check the books. The fact that two separate companies are there looks as if someone, not venkys, is checking things out. 

Glenn Mullan tweeted that it's looking more and more unlikely that venkys will own the club come the start of the season. 

[Dunnfc]

Just now, Bigdoggsteel said:

Basically that the auditors have not been sent for a purely accounting function. This would make sense as I don't see why they would spend close to a million pounds to just check the books. The fact that two separate companies are there looks as if someone, not venkys, is checking things out. 

Glenn Mullan tweeted that it's looking more and more unlikely that venkys will own the club come the start of the season. 

Given pm m the local company do an auditreview every quarter then even stranger 

[DanielMB]

3 minutes ago, AAK said:

Has nobody watches the NYC Rovers video? Chap said he's spoken with Alan Myers, who said he'd contacted the club and said he would come back on a lesser salary but hasn't even had a reply.

Myers said it's interesting two accountancy firms have come in as that's usually due diligence for a takeover. Said that fits in with what he's been told, a Chinese consortium have made a bid for the club.

 

How ITK is that dude? 

[Brian-Potter]

The fact that two independent firms have been brought in could point to a potential sale - one working for Venkys and one working for the potential buyer. Each will produce their own projections, valuations and position with a view to reaching agreement. 

I was of similar view to Kamy on this but the more this develops I get the increasing feeling that there is more to this.

I just cannot see that Venkys would bear the cost of these two companies coming in if admin was to be the outcome. If that was the route being considered then you would expect them to appoint an administrator who will then order their own audits and assessments of the clubs position.

If it turns out that Venkys have ordered this as a way of taking advice on moving the club forward as they don't trust the resources they already have, and can't commit the time to it themselves that simply confirms then it's no wonder we are in the mess we are if they think spending £800k plus is a worthwhile exercise for someone to tell them what we all know.

Lets hope it's a potential sale.

[47er]

In two minds now. Ecstatic that Venkys might be leaving at long last but concerned that local involvement might not be involved in either a buy-out or in subsequent management of the club.

Enormous wealth in China these days and very keen on football but for all we know they could be as dopey and dodgy as the Raos.

Jumping the gun I know, its only speculation but we've been down so long I couldn't take another disappointment like the last 7 years.

I do think there is only one more chance to get this right.

[Bigdoggsteel]

Just now, 47er said:

In two minds now. Ecstatic that Venkys might be leaving at long last but concerned that local involvement might not be involved in either a buy-out or in subsequent management of the club.

Enormous wealth in China these days and very keen on football but for all we know they could be as dopey and dodgy as the Raos.

Jumping the gun I know, its only speculation but we've been down so long I couldn't take another disappointment like the last 7 years.

I do think there is only one more chance to get this right.

These may be famous last words, but could they be any worse? 

[RV Blue]

BOI getting these two in sounds like the most realistic reason to me, however would they really need two firms to tell them the prospects of getting their money back? And would they spend nearly £1 million to look at retrieving a £15 million unsecured overdraft? The £100(ish) million of other debt to them is secured against assets in India so there is no reason for them to be worried about that.

[Mike Graham]

55 minutes ago, Manchester Blue said:

Just to clarify I have no inside info or ITK however couple of points worth clarifying here.  Both KPMG & Deloittes carry out a multitude of functions, so all saying it they specialise in this or that is pointless.  I've worked at other firms struggling financially who have brought in a combination of EY, PWC, Deloiites or KPMG to pay them a fortune to advise them of the bleeding obvious.  However I've also been where 2 of the big 4 have come in for either a fixed fee and/or even for nothing with the intention of a quick review to try and gain a bigger piece of work around restructuring etc.

The fact that all of them can specialise in Admin, sales or any other element is not massively relevant given how many possible outcomes.  

I have come across KPMG in a number of employment situations.  Sometimes some great work and sometimes getting paid a fortune for 2nd rate advice.  It depends on the quality of the partner(s) involved.

My toes and fingers are crossed that the V's are on the way out.  It makes common sense to bail out but they don't appear to do common sense nor play by the 'rules'.

[RV Blue]

Nixon saying that it is Venky's not the BOI that has brought them in, I wouldn't usually trust him but he broke this story to be fair.

[Kamy100]

BOI are Venky's main bank.  Venky's will put hundreds of millions of business through them each year.  I very much doubt that BOI would want to jeapordise that relationship by ordering these accounting firms to be bought into Rovers, especially as the circa £40 million that has been taken out of the club over the last 18 months has been used to reduce the money owed to BOI by Venky's.

[arbitro]

There is some really interesting hypothesising on this thread and I am quite enthused by the possibility of that lot getting the hell out of our club. However that is tempered by the false dawns we have had in the past when excitement reached fever pitch only to be matched by the depressing reality that they hadn't gone.

This is one of the most interesting threads I have read so for those who kow the finance business please keep posting and everybody else keep your fingers, toes and anything else crossed for a joyous resolution.

[DE.]

Just now, Bigdoggsteel said:

These may be famous last words, but could they be any worse? 

I'm struggling to see how the club could be run much worse tbh, but there's certainly no guarantee they would be any better. 

I would be surprised if anybody is willing to pick up the £100m+ tab owed to Venky's by the club. The only way a sale goes through, imo, is if Venky's cancel this debt... but how likely is that?

[Brian-Potter]

I think Nixon may be right on this one, I don't think they have been appointed by BOI. Either both by Venkys or one by Venkys and one by a potential buyer.

Nobody has thus far mentioned Seneca in this. Could it be be them? I'm not convinced but you never know. The concern I always had about the Seneca option was exactly where the funds would be coming from and how they would be able to raise them. Now note that now sitting on the board of Seneca and also a director is a certain Richard Matthewman. Considering this,  and bear in mind I'm thinking out loud here and could be totally wrong, but if he is on board in some way then raising the funds to make the acquisition could be done with relative ease. Also a lot of the so called Walker investments in the UK are audited by...........KPMG

[Bigdoggsteel]

Just now, DE. said:

I'm struggling to see how the club could be run much worse tbh, but there's certainly no guarantee they would be any better. 

I would be surprised if anybody is willing to pick up the £100m+ tab owed to Venky's by the club. The only way a sale goes through, imo, is if Venky's cancel this debt... but how likely is that?

Sometimes you need to know when to cut your losses 

[DE.]

Just now, Bigdoggsteel said:

Sometimes you need to know when to cut your losses 

You're applying common sense to Venky's and Rovers. That's dangerous.

[Parsonblue]

Clearly something is going on but as this is the Rao family you can't tell one way or the other.  Looking at their share price today it seems to be moving upwards again and reading a few investment sites it's clear that Venky's shares are still seen, despite the raids, as a good investment - the move upwards of their shares this year would certainly support that.  I suspect that the arrival of Deloiites and KPMG suggests that they are looking at whether retaining the Rovers as part of their business portfolio is a valid long term investment.  I'm not sure how they can possibly increase revenue streams in League One, even with massive cut-backs, so hopefully they will opt to look for a buyer.  Unfortunately, this will put everything on hold for another few weeks with the future of the manager and next season's playing resources left up in the air.   

 

 

[Tyrone Shoelaces]

Just now, DE. said:

I'm struggling to see how the club could be run much worse tbh, but there's certainly no guarantee they would be any better. 

I would be surprised if anybody is willing to pick up the £100m+ tab owed to Venky's by the club. The only way a sale goes through, imo, is if Venky's cancel this debt... but how likely is that?

As far as I can see the £100m + has gone . Venkies will never get anything like that back. Anybody with half a brain would throw in their hand and walk away from the table.

[DE.]

Just now, Tyrone Shoelaces said:

As far as I can see the £100m + has gone . Venkies will never get anything like that back. Anybody with half a brain would throw in their hand and walk away from the table.

Do they have half a brain between them? 

[Dunnfc]

Just now, Kamy100 said:

BOI are Venky's main bank.  Venky's will put hundreds of millions of business through them each year.  I very much doubt that BOI would want to jeapordise that relationship by ordering these accounting firms to be bought into Rovers, especially as the circa £40 million that has been taken out of the club over the last 18 months has been used to reduce the money owed to BOI by Venky's.

They are one of 8 banking facilities what provide services to the VHPL businesses but you are correct on being the main/preferred institution. What you could conceivably have is KPMG being sent in by the bank and Deloitte by Venkys. Relationship or not no bank is going to let someone off the hook for these extrondairy amounts especially when the initial collateral offered as security (Land) is in a major dispute of who actually now owns it. 

40 million hasn't been taken out the club at all, it's there in black and white in the accounts of which has been used to fund operating losses (Expenses) for the last two years since SBOI stopped lending against those aforementioned securities, expect June's results of the football club to show the 10.8 million (Duffy & Hanley cash) to be used in funding ordinary activities. There is no taking money out on the accounts of any amount, you only need to go back to the VLL march accounts and see only the sums of repayment of short term loans which again are tracked through from Brfc to VLL accounts and paid to the outstanding Short term loan companies (2) and FA Premier League. Cheston confirmed these were made via 3rd tier financial institutions in the consultants supporters meeting whilst the rates of interests support the third tier lending argument.

The only way they'd lower the obligations to SBOI is the funding earmarked for Rovers has gone straight to SBOI leaving Rovers to run of proceeds and Short term loans to aid working capital and net negative cashflows.