Judicial review to consider legality of Coventry City’s £14m loan to Ricoh operator
A JUDICIAL review is to take place into the £14m loan awarded by Coventry City Council to the operator of the city’s Ricoh Arena.
Coventry City Council took out a loan in January so Arena Coventry Limited (ACL) could pay off bank debts.
However, the then owner of Coventry City FC – London-based consortium Sisu – urged a High Court judge to rule if the council had unlawfully used public funds.
The legal action was prompted as part of the row between Sisu and ACL over unpaid rent of more than £1m.
The club changed hands after lapsing into administration earlier this year and the ongoing dispute between ACL and the football club saw the latter abandon the arena in favour of a ground-share with Northampton Town, 35 miles away.
The club said in a statement that the High Court had ruled “there were good grounds for an investigation” into the legality of the loan and whether the city council had made the loan for an “improper purpose”, namely to force the owners of the club to sell the club below its true value.
The hearing will see the court review the council’s conduct and the legality of its actions. The court will consider what motivated the council to reject a deal by which Sisu would pay off the bank debt and leave ACL debt free, in preference to the council lending £14.4m of public money secured on an asset which it believed made the loan worth around £6m.
“The judicial review will finally allow all the facts behind this damaging saga to be revealed to fans and taxpayers,” said the club.
It added that club owner Joy Seppala had made it clear that the club had not ruled out a return to the Ricoh but the council’s stance had compelled the club to focus on progressing plans for a new stadium elsewhere in Coventry.
“The club needs to have control over its stadium in order to guarantee its future financially and make it free from all political interference,” it added.
The council has said it is disappointed by the decision to hold a judicial review but would defend the award of the loan.
