A representative from LOFT recently met with The Football League to discuss matters relating to the League's Owners & Directors Test and insolvency rules.
The League's Owners & Directors Test is naturally one of interest to LOFT, given the arrest warrant issued in Albania several months ago against Orient president Francesco Becchetti. In outlining the purpose of the test and the way in which it operates, the League were keen to stress that it is solely based on objective criteria and contains no element of subjectivity.
As such, it is not a judgement of an owner being 'fit and proper' as it is often referred to; rather it is a set of criteria that define whether an individual is suitable to be involved in professional football. It applies to directors, managing executives and those holding more than 30% shareholding, so the test applies equally to the ownership structure at Leyton Orient as it does to single owners.
The test is a self-certification scheme that has to be renewed every season, and includes financial as well as criminal criteria. New owners also have to demonstrate the source and sufficiency of their funding and then operate under their respective division's FFP rules going forward.
In instances where an individual becomes subject to a disqualifying condition (at 'a court of competent jurisdiction' if outside the UK), the club is required to notify the League of how it intends to satisfy the regulations. This can lead to owners being barred from running a club, as has been seen at other clubs.
We also discussed transfer embargoes, given the reported imposition of one at Orient in the summer for late registration of accounts at Companies House. While the League doesn't disclose or publicise individual cases, it was made clear that such sanctions are not unusual and that embargoes - which have become the main policing mechanism for football's financial governance regulations - happen more often than is publicised elsewhere. Embargoes can be in place for as little as hours or even minutes; at any one time an embargo is usually in place somewhere in the League.
Finally, we also discussed the League's new rules on insolvency events. If an administration occurs at a club, the League takes back its share, and it will only give that share to the new owner if the League is satisfied that it's requirements have been met. These now include requiring the administrator to demonstrate that he has met with the club's Trust, provided it with information about the administration and invited it to bid in a minimum 21-day process.
This was a useful meeting in setting out the basis for any future dialogue LOFT have with the League over any matters relating to Leyton Orient.
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