Venky’s v Indian Government (a) - 13/11/2024 - Re-Arranged Challenge Match

[Green Army 75]

Oh I see.  
They only think it’s worth 200 million due to the amount they spent on it.  
 

I now understand why no one else can buy the club. 
 

You’d have to be filthy rich and not care about being ripped off. 

[lraC]

This suggestion that the £200m spent, therefore means, that it’s classed as a £200 million asset is quite frankly nonsense.

I know there are a couple of accountants post on here and I’m sure they will confirm that it is the book value, not what’s  spent, on an asset that is it’s book value.

You can liken it to a company vehicle, as that will show as a written down asset in a set of company accounts each year, as most car values depreciate.

Buy a new vehicle at £30K and sell it after 3 years at £10k. The day before it sells, it will be an asset of £10k not £30K plus the cost of maintaining it. 

[arbitro]

3 hours ago, Green Army 75 said:

Oh I see.  
They only think it’s worth 200 million due to the amount they spent on it.  
 

I now understand why no one else can buy the club. 
 

You’d have to be filthy rich and not care about being ripped off. 

For somebody to buy the club it has to be put on sale. The Punekars won't even entertain any offers which leaves many of us to think there are illegalities they don't want getting out.

I can't speak for everyone but their refusal to sell is probably my biggest frustration (although it's a pretty extensive list).

[Herbie6590]

2 hours ago, lraC said:

This suggestion that the £200m spent, therefore means, that it’s classed as a £200 million asset is quite frankly nonsense.

I know there are a couple of accountants post on here and I’m sure they will confirm that it is the book value, not what’s  spent, on an asset that is it’s book value.

You can liken it to a company vehicle, as that will show as a written down asset in a set of company accounts each year, as most car values depreciate.

Buy a new vehicle at £30K and sell it after 3 years at £10k. The day before it sells, it will be an asset of £10k not £30K plus the cost of maintaining it. 

The car example is spot on but I don’t believe it's treated the same as in investment in a subsidiary*.
Venky’s convert their debt to shares at the end of each season so the capital invested in VLL is growing each season. The worth of that investment & how it’s shown in the ultimate parent accounts is then between them & their auditors in reality. The accounts are supposed to show a true & fair value of course…

The only time they definitely have to face facts is when VLL is actually sold. At that point, if the actual sale proceeds are less than the written-down value in their books, then the difference is their loss. 

 

*if a practising accountant with knowledge of global accounting wants to chime in, please add to the discussion…👍

[philipl]

12 hours ago, Herbie6590 said:

No, nobody in the real world does but the accountants in India might want to avoid a massive write off through their P&L until the last possible moment. 

Even accountants in India have to apply international general accepted accounting standards. That means every asset has to be shown at the lower of economic value (usually historic cost of purchase plus enhancements at cost less depreciation) and current net realisable value ie what can it be turned into cash for today?  

Given that Rovers are in the family's personal portfolio, it really has no consequence whether they have written down the costs of Rovers or not. Who apart from the Indian taxman is ever going to see their "true" personal financial state of affairs?

I would be amazed if the net book value of Rovers in the Rao family accounts isn't a big fat round zero or even made negative by provisions.

These accounting arguments on here are spurious in the extreme... 

 

Edited July 27 by philipl

[tomphil]

Whatever the accounting process it has certainly suited them for a good while now so if they can't use it to soak away profit, avoid some tax or whatever then what is the point in it all.

Advertising is limited in the Championship and almost non existent in league 1 so we are back to just a plaything to keep certain siblings occupied or a gremlin that needs keeping in a box for fear of what'll be known if it gets out.

The future under these lot is now as bleak as it has ever been at least with the '20 mill a season' there remained faint hope some manager would suddenly deliver one lucky season.

[lraC]

14 minutes ago, Herbie6590 said:

The car example is spot on but I don’t believe it's treated the same as in investment in a subsidiary*.
Venky’s convert their debt to shares at the end of each season so the capital invested in VLL is growing each season. The worth of that investment & how it’s shown in the ultimate parent accounts is then between them & their auditors in reality. The accounts are supposed to show a true & fair value of course…

The only time they definitely have to face facts is when VLL is actually sold. At that point, if the actual sale proceeds are less than the written-down value in their books, then the difference is their loss. 

 

*if a practising accountant with knowledge of global accounting wants to chime in, please add to the discussion…👍

The share price reflects the underlying value of the assets I think and when you look deep inside the club, that’s worryingly low. 

[lraC]

12 minutes ago, tomphil said:

Whatever the accounting process it has certainly suited them for a good while now so if they can't use it to soak away profit, avoid some tax or whatever then what is the point in it all.

Advertising is limited in the Championship and almost non existent in league 1 so we are back to just a plaything to keep certain siblings occupied or a gremlin that needs keeping in a box for fear of what'll be known if it gets out.

The future under these lot is now as bleak as it has ever been at least with the '20 mill a season' there remained faint hope some manager would suddenly deliver one lucky season.

I am pretty sure the club is not an accounting tool.

There is something deeper than that and the fact that they are under investigation, adds fuel to this, in my opinion. 
 

What Philip said about a big fat zero, is very interesting and may prove to be their undoing at the hearing In August, given their reason for pumping funds in, is to protect their investment 

[tomphil]

I think originally it was bought as a personal plaything with a global advertising platform for the company.

Since then imo things had to change because rather than being self financing with the odd few million chucked in it became a financial black hole that needed filling so in order to keep it going they had to find a way to sit it in the books.  Just my opinion based on what we've seen and of course it still remains a plaything to some but seeing as it's company money not personal that keeps it going it has to be referred to as an investment.

Though what exactly they are investing in is up for debate because the chances of any return are virtually non unless they have a way of running transfer income back towards India ?

Doesn't appear the case though and it seems the Indian authorities are now wise to the 'investment' line being a red herring.

Edited July 27 by tomphil

[Roverthechimp]

Companies fail regularly - investments prove to be unwise and new markets/branches/ventures are ended with associated losses being reported somewhere in the accounts/balance sheets. It is not uncommon for a business to incur additional costs short term to end their involvement in a business/market/country.

In short to have been wrong/stupid/misguided is rarely a crime but lying about it usually is as it tends to indicate something has/is not entirely pukka…

[tomphil]

3 hours ago, philipl said:

Even accountants in India have to apply international general accepted accounting standards. That means every asset has to be shown at the lower of economic value (usually historic cost of purchase plus enhancements at cost less depreciation) and current net realisable value ie what can it be turned into cash for today?  

Given that Rovers are in the family's personal portfolio, it really has no consequence whether they have written down the costs of Rovers or not. Who apart from the Indian taxman is ever going to see their "true" personal financial state of affairs?

I would be amazed if the net book value of Rovers in the Rao family accounts isn't a big fat round zero or even made negative by provisions.

These accounting arguments on here are spurious in the extreme... 

 

The accounting arguments and assumptions are largely based on known facts and they are that the VH group is the ultimate parent company. It owns and funds VLL which in turn owns and funds Blackburn Rovers so obviously it is all tied in within a giant accounting process of the VH empire.

Quite how it sits in there and if it serves a purpose or not nobody knows but it's there it's all in black and white and official,documents.

Nothing spurious about that.

Edited July 27 by tomphil

[philipl]

1 hour ago, tomphil said:

The accounting arguments and assumptions are largely based on known facts and they are that the VH group is the ultimate parent company. It owns and funds VLL which in turn owns and funds Blackburn Rovers so obviously it is all tied in within a giant accounting process of the VH empire.

Quite how it sits in there and if it serves a purpose or not nobody knows but it's there it's all in black and white and official,documents.

Nothing spurious about that.

Not saying there is.

What I am saying is speculation about the book value of Rovers within Venky's accounts is spurious. 

[Exiled in Toronto Mk2]

On 24/07/2024 at 06:24, philipl said:

…These are probably both Balaji doings when he was hanging around with Tantric Jerome and convinced his siblings and in-law to buy Rovers .

I’ve thought for a while the house thing was an example of ultra-rich 2nd gen Balaji thinking laws are things that only apply to little people.

”I want to buy Gary Neville’s house, take a shit in the hallway then lock it up”

“Certainly Mr. Balaji Sir, that can be done. From where should I transfer the funds over to the UK?”

“I send plenty over already, take it from that!”

”Mr. Balaji Sir, that is not possible, our tax laws prohibit the  redirection of such funds from their stated purpose”

”Why are you still here?? You want cattle prod up your jacksie again????”

”But…” BZZZTTTTTT

 

[tomphil]

4 minutes ago, philipl said:

Not saying there is.

What I am saying is speculation about the book value of Rovers within Venky's accounts is spurious. 

Well yeah 250 million investment over 12 years and worth about 25 million now in real terms.

Still it's a 2 million profit on the original purchase price before debts i suppose !

[Old Codger]

Mods, please could we have a countdown timer to the court case in August - it would be great if we could, and it was displayed / pinned to the landing page of the BRFCS website, as I think it is quite likely to be a watershed in the club's history and future fortunes.

G'waan now, ye know yis want to.. G'WAAANNN !

[Green Army 75]

23 hours ago, arbitro said:

For somebody to buy the club it has to be put on sale. The Punekars won't even entertain any offers which leaves many of us to think there are illegalities they don't want getting out.

I can't speak for everyone but their refusal to sell is probably my biggest frustration (although it's a pretty extensive list).

So, are they so rich that they’re happy to lose millions each year with (respectfully) little chance of promotion to the Premiership?  
 

What’s in it for them?  Businessmen don’t normally like loss making businesses!

Has anyone made an offer to buy?

I know our chairman, who will sell to the right people who have the funds to take us higher up the league, says he gets one or two contacts a week from interested parties.  I’m sure your owners would as well? 

 

[Green Army 75]

Imagine if, 12 years ago, the owners had said we will invest 250 million in the next decade with the lion share going toward setting up the best academy in the land. 
 

Blackburn will become the hotbed of young talent with the best resources and the best coaches.  
 

That would have been pretty cool now. 
 

We’ve just invested £20 million in a new academy with the aim of producing high quality youth players.  The fanbase are arguing whether this is money well spent (when we are in danger of relegation and don’t go into debt) but, the vast majority now see it as the right choice.  
 

[wilsdenrover]

2 minutes ago, Green Army 75 said:

Imagine if, 12 years ago, the owners had said we will invest 250 million in the next decade with the lion share going toward setting up the best academy in the land. 
 

Blackburn will become the hotbed of young talent with the best resources and the best coaches.  
 

That would have been pretty cool now. 
 

We’ve just invested £20 million in a new academy with the aim of producing high quality youth players.  The fanbase are arguing whether this is money well spent (when we are in danger of relegation and don’t go into debt) but, the vast majority now see it as the right choice.  
 

We already had one of the best academies before they turned up.

[Green Army 75]

8 minutes ago, wilsdenrover said:

We already had one of the best academies before they turned up.

Ah.  Has it become a bit run down now?

[arbitro]

17 minutes ago, Green Army 75 said:

So, are they so rich that they’re happy to lose millions each year with (respectfully) little chance of promotion to the Premiership?  
 

What’s in it for them?  Businessmen don’t normally like loss making businesses!

Has anyone made an offer to buy?

I know our chairman, who will sell to the right people who have the funds to take us higher up the league, says he gets one or two contacts a week from interested parties.  I’m sure your owners would as well? 

 

I don't know for certain but rumours abound that they have rebuffed any interest to buy the club from them. There isn't and rational explanation for them still being here.

[Ricky]

4 minutes ago, Green Army 75 said:

Ah.  Has it become a bit run down now?

Well it produced a player in both squads of the Euro finals this year so it’s done something right. 

[KentExile]

49 minutes ago, Green Army 75 said:

Imagine if, 12 years ago, the owners had said we will invest 250 million in the next decade with the lion share going toward setting up the best academy in the land. 

 

37 minutes ago, Green Army 75 said:

Ah.  Has it become a bit run down now?

It was already one of the best, and the academy is not particularly run down, they just pay the minimum amount to keep it at category 1.  Much like they pay the minimum amount possible to keep the lights on

[Hasta]

2 hours ago, Green Army 75 said:

What’s in it for them?  Businessmen don’t normally like loss making businesses!

You’ve finally got to the $250million question.

Nobody knows. They have no interest in it, don’t attend and yet are happy to rack up loss after loss.

This leads to speculation on nefarious accounting activities they don’t want uncovering.

Remember these are the people who bought a club, sidelined one of the best functioning boards in the premier League, and gave  the agent that brokered the sale of the club free reign to run the football side of the club (after said-agents own client Steve Kean had been put in charge of the first team)

Edited July 28 by Hasta

[Moptop1]

I’ve put this on a few Rovers sites and to the talk show that bellend Jim White does. Pretty much every Rovers site has deleted it.

Says it all, are Waggott and the owners getting people blocked on their comments against them?

 

 

Edited July 28 by Moptop1

[tomphil]

2 hours ago, Green Army 75 said:

Imagine if, 12 years ago, the owners had said we will invest 250 million in the next decade with the lion share going toward setting up the best academy in the land. 
 

Blackburn will become the hotbed of young talent with the best resources and the best coaches.  
 

That would have been pretty cool now. 
 

We’ve just invested £20 million in a new academy with the aim of producing high quality youth players.  The fanbase are arguing whether this is money well spent (when we are in danger of relegation and don’t go into debt) but, the vast majority now see it as the right choice.  
 

Jack Walker set our academy up about 25 years ago and its paid for itself and has recently been producing players sound enough for a championship squad.

The ONE and ONLY thing Venkys have got right is keeping it going and as a cat 1 set up though how long that will last now is debatable. The CEO has also born the hallmarks of someone who would;ve cut that back years ago given half the chance.

There's no sense in spending 100's of millions on one though that would be pointless and defeat the object.

Ours has cost 2 to 3 mill per year to run and a third of that comes from grants.