Venkys London Ltd accounts

[Herbie6590]

13 minutes ago, McClarky said:

The debt is real, let’s have no doubt about that.  We may not have to pay interest on the majority of our debt but it is debt whichever way you look at it.  

It’s debt to the extent that it demonstrates how much we are overspending compared to income, but it’s not debt like your mortgage or credit card bill. It’s more akin to borrowing off your parents. It’s debt, but all parties accept the reality...they’ll not ask for repayment & you’ll never be able to afford to repay ?

[arbitro]

Just now, Herbie6590 said:

It’s debt to the extent that it demonstrates how much we are overspending compared to income, but it’s not debt like your mortgage or credit card bill. It’s more akin to borrowing off your parents. It’s debt, but all parties accept the reality...they’ll not ask for repayment & you’ll never be able to afford to repay ?

Thanks for your input which helps the likes of me who doesn't really understand the finances.

Could they write off the debt, walk away and leave us debt free (albeit with unsustainable overheads)?

[Stuart]

Just now, Herbie6590 said:

The only way Venky’s debt is repaid is if one of the following happens :-

1. Club income increases to such an extent that expenses are fully covered by income leaving a surplus which can be used to reduce that debt...so realistically PL TV money is probably the only way t/o increases to that extent

2. Venky’s find a buyer who values the club at a price which would cover their debt - so north of £250m. The only way Blackburn Rovers will be worth that sort of money is if diamond mines are discovered in the Riverside and oil deposits are unearthed in the car park behind the Blackburn End

 

if Venky’s want out, those loans are gone, they ain’t getting it back save for putting the club into liquidation & selling the land at Ewood & Brockhall but even then, this would barely dent the sums owed, they still stand to lose a fortune.

If there is something to worry about, it is them stopping to fund the weekly shortfall of £300k, because then we would have a distress sale of our players and we’d be operating like Accrington Stanley. Now there is a an argument that at least this would be sustainable and “honest” & to be frank, I have a sympathy with that view. But forget ever returning to the PL.

So why do they keep throwing their money into the pit. As you say, they are never getting that money back.

The only way this works for them, to my mind, is if our losses are tax deductible for the group.

[tomphil]

7 minutes ago, arbitro said:

Thanks for your input which helps the likes of me who doesn't really understand the finances.

Could they write off the debt, walk away and leave us debt free (albeit with unsustainable overheads)?

Of course they could and as I pointed out on another post then it would need someone coming in with say 50 million in surplus cash just to get us through the next couple of seasons whilst things were restructured.

Very unlikely of course but it's only similar to some other clubs and their takeovers that's why it's a billionaires playground these days not a millionaires but it is possible.  It would all be about the depth of a new owners pockets although if Vs just pulled the plug overnight then we'd be up the creek and have to take some of the drastic action pointed out obviously but a takeover needn't be so drastic as it's being portrayed for some reason.

 

Edited March 23, 2019 by tomphil

[blueboy3333]

16 minutes ago, Herbie6590 said:

It’s debt to the extent that it demonstrates how much we are overspending compared to income, but it’s not debt like your mortgage or credit card bill. It’s more akin to borrowing off your parents. It’s debt, but all parties accept the reality...they’ll not ask for repayment & you’ll never be able to afford to repay ?

They can sell assets to get the money back if they can find a way to legally flog Brockhall. 

[The Axe]

23 minutes ago, Stuart said:

So why do they keep throwing their money into the pit. As you say, they are never getting that money back.

The only way this works for them, to my mind, is if our losses are tax deductible for the group.

Absolutely no way can these losses be tax deductible.

[tomphil]

If they pay the wages etc every month out of their company bank account in India ?

[Stuart]

39 minutes ago, The Axe said:

Absolutely no way can these losses be tax deductible.

They have a loss making business within a corporation. Doesn’t seem that far fetched.

[Herbie6590]

1 hour ago, arbitro said:

Thanks for your input which helps the likes of me who doesn't really understand the finances.

Could they write off the debt, walk away and leave us debt free (albeit with unsustainable overheads)?

Yes

[Herbie6590]

1 hour ago, Stuart said:

So why do they keep throwing their money into the pit. As you say, they are never getting that money back.

The only way this works for them, to my mind, is if our losses are tax deductible for the group.

Stuart....I’ve absolutely no idea ?‍♂️ I guess the original intention was to improve brand awareness ahead of a business launch in the UK. They’ve DEFINITELY increased brand awareness globally but I suspect not in the way they intended.

Why do they stay ? That depends on your viewpoint - you could argue a sense of loyalty reflecting the mistakes they made & a sense of duty to put it right; you could argue it’s small change & the brand awareness has been worth the investment; you could argue it’s such a small part of their empire, as long as losses are contained, it’s no big deal.

I’d bet it’s a combination of all three to varying degrees...and yes, the losses can be offset against global profits in other subsidiaries so it doesn’t cost them the full up figures...but it still costs them...

 

[Herbie6590]

54 minutes ago, The Axe said:

Absolutely no way can these losses be tax deductible.

You couldn’t be more wrong if you had sat down & tried. Ask yourself why all the major accounting firms have global presences and advise their clients on how to minimise their tax bills across multi national tax regimes. ?‍♂️

[Herbie6590]

2 minutes ago, tomphil said:

If they pay the wages etc every month out of their company bank account in India ?

Irrelevant to be blunt...all subsidiaries will be grouped up into the ultimate parent undertaking in India...that’s where the final tax computation will take place.

[Herbie6590]

1 hour ago, blueboy3333 said:

They can sell assets to get the money back if they can find a way to legally flog Brockhall. 

I covered this higher up the thread...the extent of the debt dwarfs what they could ever hope to get from a liquidation.

[Herbie6590]

I’ll post this under the heading of “item I never ever thought I’d post on a Blackburn Rovers fan site” ? & I accept that it’s not likely to bring people flooding into the site but regarding the tax benefits of owning multi national corporations...

 

https://www.bbc.co.uk/news/business-20580545

[Vinjay]

3 minutes ago, Herbie6590 said:

Irrelevant to be blunt...all subsidiaries will be grouped up into the ultimate parent undertaking in India...that’s where the final tax computation will take place.

People don't do the most basic of research. I just had to correct someone who said they were amazed Venkys hadn't taken legal action (they did) against Kentaro, Anderson, etc and was completely ignored. Level of ignorance accustomed to on here I'm afraid. 

Venkys LONDON Ltd how the hell does that lead to tax breaks in India? ?

Edited March 23, 2019 by Vinjay17

[HowieFive0]

Just now, Herbie6590 said:

I’ll post this under the heading of “item I never ever thought I’d post on a Blackburn Rovers fan site” ? & I accept that it’s not likely to bring people flooding into the site but regarding the tax benefits of owning multi national corporations...

 

https://www.bbc.co.uk/news/business-20580545

God I hate international breaks ...

 

(only kidding Herbie ..thank you)

[Herbie6590]

Just now, HowieFive0 said:

God I hate international breaks ...

 

(only kidding Herbie ..thank you)

Me too ?

[tomphil]

18 minutes ago, Vinjay17 said:

People don't do the most basic of research. I just had to correct someone who said they were amazed Venkys hadn't taken legal action (they did) against Kentaro, Anderson, etc and was completely ignored. Level of ignorance accustomed to on here I'm afraid. 

Venkys LONDON Ltd how the hell does that lead to tax breaks in India? ?

It belongs to the VH group in INDIA and the VH group funds it, one arm of a company financing another out of its own resources/income/bank facilities - how would it not be offset against tax for the parent company ?

[Vinjay]

Just now, tomphil said:

It belongs to the VH group in INDIA and the VH group funds it, one arm of a company financing another out of its own resources/income/bank facilities - how would it not be offset against tax for the parent company ?

...but they have referred to private family funds funding VLL AKA Blackburn Rovers. Pretty sure it was part of the reason why shareholders in Venkys/VH Group didn't get onside when approached by fans about damage to their brand's reputation. Unfortunately as we know (other than clearly halting Venkys outlets opening in the UK and they certainly had intentions at one point) it hasn't exactly hurt their core business.

Edited March 23, 2019 by Vinjay17

[tomphil]

VLL run and fund Rovers and VH group own and fund VLL so it all comes under the parent company finances i'd wager.  The may have had to resort to putting in private funds or whatever but i'd be amazed if they fund it all privately in fact i'd be gob smacked.

Using it as a loss leader against other profits is the one and only thing that makes any grain of sense in their ownership.

 

[The Axe]

1 hour ago, Herbie6590 said:

You couldn’t be more wrong if you had sat down & tried. Ask yourself why all the major accounting firms have global presences and advise their clients on how to minimise their tax bills across multi national tax regimes. ?‍♂️

If I could not be more wrong then explain "The concept of group taxation (in India) does not exist in either direct or indirect tax laws." I can quote the source if you want.

[The Axe]

1 minute ago, The Axe said:

If I could not be more wrong then explain "The concept of group taxation (in India) does not exist in either direct or indirect tax laws." I can quote the source if you want.

And if you need specific confirmation. "There is no concept of tax grouping rules in Indian Tax Law and therefore there is no relief for losses of overseas subsidiaries."

[Herbie6590]

Just now, The Axe said:

And if you need specific confirmation. "There is no concept of tax grouping rules in Indian Tax Law and therefore there is no relief for losses of overseas subsidiaries."

Then I stand corrected...

[Stuart]

Just now, The Axe said:

And if you need specific confirmation. "There is no concept of tax grouping rules in Indian Tax Law and therefore there is no relief for losses of overseas subsidiaries."

So, assuming they haven’t got around this somehow (through use of parent/subsidiary companies) then there is no reason for them to continue pumping money in.

How long can they continue to powder their nose to save face?

It’s promotion or bust in slow motion.

[darrenrover]

The VH Group has subsidiaries worldwide, including Switzerland. There's no way that our losses aren't tax beneficial somehow.