The Facts
The Extraordinary General Meeting of Chelsea Pitch Owners took place in the Harris Suite at Stamford Bridge on Monday 23 July 2012.
Before the meeting was called to order, CPO’s lawyers objected to one shareholder distributing copies of a leaflet detailing the identities of shareholders who made substantial purchases between 3rd and 20th October 2011 and making a number of claims in respect of the original Prospectus of Chelsea Pitch Owners.
This objection was on the grounds that the leaflet had not been circulated to the other shareholders not present, and the only thing to happen within the meeting should be discussion of the points on the agenda and a vote (NB the distribution of leaflets outside the venue cannot be controlled).
Chairman Steve Frankham called the meeting to order at 11am and declared a quorum, although he advised that Dennis Wise had sent apologies as he was absent due to business matters, and that the meeting was being taped as a matter of record.
The first question from the floor came from Kimberley Richardson who asked what relation the motions before the meeting had to the current constitution of CPO. It was explained that the board needed authority from the shareholders to recommence sales of shares.
A question was raised as to why sales of shares could not be limited to Chelsea FC season-ticket holders and members. Rick Glanvill responded by saying that the board were aware that touts held memberships and season tickets and there was a possibility that they might come into possession of shares if this condition were imposed. There were also data protection issues to consider as CPO would not be allowed to access CFC membership data. A shareholder protested from the floor that data protection had not prevented CFC from identifying and holding meetings with bulk shareholders in the run-up to last October’s EGM.
Clarification of Bob Sewell’s absence from the meeting was sought and Steve Frankham simply stated that Mr Sewell had been “unable to make it”.
Mr Trevor Crosse asked why, with the loan date not due for completion until 199 years after agreement, there was suddenly pressure to raise revenue by putting shares on sale again. Director Gray Smith advised that CPO had a specific obligation to meet payments, and CFC, having given them a breathing space while shares were suspended, were now no longer prepared to wait. Steve Frankham advised that the board were looking into alternative revenue streams to provide funding, a subject to which the meeting returned later.
Shareholder Paul Todd made an offer of £50,000 to immediately purchase the lease from the board of CPO, given that CBRE had valued it at £20,000 in the run-up to last year’s EGM.
At this point, with many shareholders seeking to make themselves heard, the meeting almost descended into uproar. Dave Spring of Say No CPO accused the chair of having done nothing to address the issues surrounding the so-called concert party shares, and Paul Todd read from the leaflet in circulation relating to bulk shareholders and the original prospectus of CPO.
Gray Smith was asked to state before the meeting the recommendations of his report to the board in respect of the concert party shares, which in essence were that the company had no income other than share sales, and that they were currently holding 200 applications for shares. He also recommended looking at other income streams, and the vetting of any applications which came before the board. He added that the board had no obligation to accept any application to purchase shares, he intended to vote yes to recommencing sales, and that it was the fault of company law that the disputed shares sold last autumn were valid.
Shareholder Charles Rose raised the point that if shareholders in possession of the disputed share had registered false addresses, they would not receive the meeting documentation to enable them to vote. Gray Smith responded that one of his recommendations was that the company should write to these shareholders asking if they would consider relinquishing their shares.
Kimberley Richardson raised the issue of rent paid by the football club and asked if they were getting use of the ground free. Steve Frankham confirmed that the club paid a peppercorn rent.
Clint Steele of SNCPO stated that CPO generated no revenue in 2009, and put it to the board that the possibility of liquidation was scaremongering. He also asked Gray Smith how much notice CFC would need to give CPO in order to wind up the company. Mr Smith advised that the club would need a reasonable case in order to do so.
Mr Steele raised the issue of the club’s motives with regard to CPO and maintained that the danger of a ‘land grab’ persisted. He questioned why Roman Abramovich had placed the loans owned by him into a holding company. Another speaker suggested that CPO should investigate the possibility of obtaining an independent loan from a financial institution which would mean that CPO would no longer be answerable to the club in terms of repayment.
James Greenbury, a founder member of SNCPO expressed the view that the chances of holding on to the freehold were diminishing as the club were clearly determined to obtain the ground and, in a comment which raised a laugh in the sometimes fraught proceedings, said that Mr Frankham had “the look of a man taken into a dark room by Roman Abramovich’s heavies”. He went on to suggest that shareholders should assemble a register of friends who would be willing to buy a share in order to ensure that they would end up in the hands of genuine fans.
Long-standing shareholder Kim Holdaway stated that to her recollection there had previously been changes to the Articles of Association and she remembered one AGM in the 1990s when the late Ron Hockings had been so angry at the changes imposed that he had resigned from the board. Her view was, however, that she wasn’t totally against putting shares on sale.
Clint Steele put a point of order that given the vote on Resolution 3 should take place immediately as the result of this would potentially affect all the other votes. Steve Frankham responded that this was not possible as all the votes were on one ballot paper. Pleas from the floor for an adjournment were declined by the board.
A pertinent question regarding the £265,000 raised in share sales was raised. Mr Frankham explained that these had been swallowed up in legal fees. At this stage an accusation was levelled against Mr Frankham that he had misled shareholders.
Charles Rose spoke to the meeting that he had become more and more sad at seeing the meeting descend into a slanging match. He expressed his disappointment that a vision for CPO had not been laid before the shareholders and wanted a vision that shareholders could buy into, particularly referring to the model of Barcelona/numerous German clubs being owned by supporters.
Mr Jim Cowan stated that he was a strategy consultant, founder of the Race for Life and had raised a quarter of a million pounds for charity. He offered to help the board develop fund raising strategies, and Tim Rolls referred to the recent Chelsea Football Fancast when a number of people had expressed a willingness to help in this regard.
Mr Alan Rowe asked Mr Frankham if he ever spoke with Roman Abramovich. Mr Frankham responded that he hadn’t and his dialogue was with the club’s Chief Exective, Ron Gourlay.
Dave Spring once again expressed his frustration that Mr Frankham, who had helped in raising record amounts of money for CPO, now appeared to be saying he was now unable to so. Clint Steele pointed out that Chelsea FC should be responsible for the legal costs incurred.
At 12.00pm, Mr Frankham called for a vote and asked the ERS representative to explain the voting protocol.. The meeting was adjourned until 12.30pm, however, it was almost 1.00pm before the meeting was recalled.
The results of the vote were as follows:-
Ordinary Resolution 1 – authority to sell shares in the company up to a value not exceeding 100,000 pounds (1,000 shares)
For: 3,347
Against: 952
Resolution passed
Special Resolution 2 – authority to sell shares to new shareholders
For: 3,294
Against: 979
Resolution passed
Special Resolution 3 – to restrict the number of votes an individual shareholder can pass to ten, irrespective of number of shares held:-
For: 2,067
Against: 2,200
Resolution defeated
Special Resolution 4 – making it a requirement that each Director of CPO must own at least one share in the company:-
For: 3,755
Against: 255
Resolution passed
Ordinary Resolution 5 – to authorise the Board to look into ways of preventing “carpetbagging”
For: 2,973
Against: 958
Resolutions passed
Steve Frankham immediately declared the meeting closed upon announcing the results, and the meeting ended in uproar as shareholders demanded that the board provide answers with regard to the shock defeat of Resolution 3, pleas which fell on deaf ears. The meeting concluded at approximately 1.15pm.
The Opinion
Firstly, an apology. In the newsflash article published on TheChels.net following the meeting on Monday, one of the headlines read “Chair uses proxies to vote down Resolution 3”. In an effort to discover exactly what happened at the meeting on Monday, I had an exchange of correspondence with Steve Frankham in which he clarified matters. He used all his personal votes together with the 103 proxy votes at his discretion to vote in favour of the resolution. It is certainly not the intention of this column, or indeed TheChels.net, to cause deliberate distress or offence and I’m happy to take this opportunity to apologise to Steve for my error and retract the comment.
With regard to the meeting, I sensed that many in the room on Monday were unhappy that only three members of the board attended an important EGM. Notwithstanding the fact that the meeting was re-scheduled, people do have other business commitments. However whilst many shareholders re-arranged these, it was a shame that Dennis Wise was unable to attend, especially as he is perceived as being a link with the fans. It’s also disappointing that he failed to attend the last two board meetings.
Whilst Bob Sewell has announced his attention not to stand for re-election to the board at the next AGM, he remains Company Secretary, and although his absence was a disappointment, this may have been covered by his advices to Steve Frankham (CF chelseafc.com/page/ChelseaPitchOwnersNews 03/07/12) that he he did not “…. think it advisable to participate in board meetings or any decision-making that will affect the future of CPO.”
Unfortunately, as is usually the case with CPO meetings, they tend to descend into noise and chaos. Whilst shareholders have real and abiding concerns with regard to issues surrounding the “concert party” shares and the affect they have on voting, personal abuse directed towards others is not helpful and may have the effect of alienating fellow shareholders/supporters who might otherwise be sympathetic to their views.
On a more positive note, it was great to hear so many shareholders express their willingness to assist with fund-raising initiatives for CPO. It’s to be hoped that they respond to the Chair’s invitation to contact him with these. Also, and as suggested at the meeting, it would be great if any such events weren’t just restricted to shareholders. All fans should be encouraged to attend functions and prices set to reflect a range of incomes, other than being marketed to those with a few bob in their pocket.
Of course, the real low point of the meeting has to be the defeat of Resolution 3. This means that the “concert party” shares will continue to enjoy the benefits of voting rights to a maximum of 100 shares, which has the potential to materially affect all votes taken by CPO in future. Whilst Gray Smith’s report has proved that the shares are valid in law, it doesn’t mean that fellow shareholders can’t hold the view that they are ethically dubious. For me, the bottom line is that Chelsea Pitch Owners shares should be owned by genuine Chelsea fans – whether resident in the UK or abroad.
There is of course a way to address this. To date, 17,000 shares have been sold in CPO. However, only 4,000 votes were cast at the EGM. Whilst this represents huge progress from the nadir of 2010 when only 26 people attended the AGM, both the board and the various groups interested in CPO must do whatever they can to make those “dormant” shareholders become actively involved in CPO, whether this means getting out and attending meetings or just sending proxies in.
However, if you are reading this, don’t have a CPO share and would like to purchase one, now is your opportunity. With the passing of Resolutions 1 and 2, the board of CPO now have authority to sell 1,000 shares before the next Annual General Meeting. Whilst 200 applications are already with the club, this means that 800 are available. You can apply for a share by e-mailing cpoinfo@btconnect.com and more details are available at the CPO website www.chelseafc.com/page/ChelseaPitchOwners. The board of CPO gave an undertaking at the meeting that all new applications would be scrutinised prior to completion of sale, so hopefully this will ensure that new shares are sold to bona fide supporters, and not applicants with a hidden agenda who provide false addresses.
Work to update and maintain the shareholder database must also be progressed so as to ensure that shareholders don’t miss out on receiving crucial meeting information.
As Chelsea fans we are incredibly lucky that Chelsea Pitch Owners exists to prevent our ground being picked over by property speculators. As fans we have a responsibility to get behind the organisation and support it as much as we can. Hopefully all groups involved with CPO can work together instead of tearing each other apart.
I’ll be back ahead of the new season with a look at the demographics of football support in the 21st century, and what it means to be a fan.
In the meantime you can follow me on Twitter @BlueBaby67
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