Laundered money ‘may have been invested in football club’

FEARS that cash from money laundering may have been invested in Blackpool Football Club have emerged.

Concerns were raised in front of a High Court registrar in a preliminary hearing in a bitter legal wrangle between owners of the League Two club, the Oyston family, and its president, Latvian millionaire Valeri Belokon.

The Oystons’ legal team said it had been informed Latvia’s financial regulator, the Financial and Capital Markets Commission, recently fined Baltic International Bank, which Belokon owns, the equivalent of £780,000.

It was imposed for “repeated violations” of money laundering rules and “transactions that subjected the bank to a significant money laundering risk”, said Eric Shannon, representing the club owner, Owen Oyston, and his son Karl, the chairman, and their company Segesta.

VB Football Assets, also owned by Belokon’s, is pursuing a claim for “unfair prejudice” against the Oystons and accusing them of stripping the club of funds.

Shannon told registrar, Sally Barber at the case management hearing in London that an application to postpone the proceedings might have to be made to amend the Oystons’ defence as funds put into Blackpool by Belokon “one way or another were the proceeds of crime, or probably the proceeds of crime”.

The suggestion was refuted by Fraser Campbell for Belokon, who said: “They are making wild and extremely serious allegations which we have responded to in a detailed letter setting out precisely the source of the funds involved.”

Campbell said a stay was opposed because of the delay it would cause, adding: “We are very keen they should put up or shut up. We do not wish to have another month of having wild allegations thrown about before being brought before the court while the respondents sit on information.”

Refusing to order a stay, Barber told Shannon: “If you are going to take this anywhere you should get on and do it. There is an element of grand-standing.”

VB Football Assets paid £1.8m in 2006 for 20% of the club shares and then caused £2.7m of loans “on highly generous terms” to be advanced to Segesta and the Oystons.

It was anticipated the loans would in due course be converted into a further 30% of shares for the company after tax losses had been used by Segesta.

Belokon made available further substantial sums to buy players, on the understanding that both sides would enjoy an equal quasi-partnership.  Blackpool were subsequently promoted to the Championship and then, in 2010, to the Premier League.

Documents submitted to the court say: “Promotion to the Premier League produced unprecedented revenues for the company, particularly in respect of television rights.

“However, instead of investing those funds in, for example, a strengthened playing squad, or using them to pay dividends to shareholders, the respondents [Segester and the Oystons] caused enormous sums to be transferred to themselves and their associated companies.

“Perhaps the most egregious example was a payment to [83-year-old Owen Oyston’s] personal service company of £11m in the 2010-2011 financial year as ‘director’s emolument’.”

Segesta and the Oystons are fighting the claims and deny unfair prejudice.

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