SPECIAL REPORT: Public inquiry must be held into how Northampton Town got to the edge of football abyss

Sixfields Stadium, the home of Northampton Town, and the unfinished East Stand in the background

Sixfields Stadium, the home of Northampton Town, and the unfinished East Stand in the background

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Northampton Town – formed by a group of teachers and a solicitor in a Wellingborough Road pub in 1897 – has stood on the verge of many a dangerous ledge during its 118 years. But few would argue that the last weeks and months have been its darkest days.

Kelvin Thomas and his consortium of backers remain Northampton Town’s best hope for survival and across the town people will be hoping he can complete an 11th-hour deal to lift the club away from the brink.

Chairman of Northampton Town, David Cardoza

Chairman of Northampton Town, David Cardoza

As the Chron reported earlier this week, there is speculation that a deal is very close to being completed. However, it is understood that there are still legal agreements to be reached.

Even if new owners come in, the fans, those people who stood for eight hours collecting change outside of the Ricoh Arena on Saturday; those people who offered to pay Cobblers staff wages this week; those people who have bought tickets, bought replica shirts; who have

stood in away terraces on blustery weeknights deserve an answer as to how we got to this stage.

With much fanfare, Northampton Borough Council agreed to loan Northampton Town Football Club Limited up to £12 million on September 18, 2013, to develop Sixfields.

Borough Council Leader, David Mackintosh, and Chairman of Northampton Town FC, David Cardoza, look over the new plans for Sixfields. ENGNNL00120130810121502

Borough Council Leader, David Mackintosh, and Chairman of Northampton Town FC, David Cardoza, look over the new plans for Sixfields. ENGNNL00120130810121502

Few could have foreseen how what lay ahead, but there were certainly concerns raised at the time.

The decision to loan the money was questioned by opposition councillors, who were critical that the discussion around approval of the loan took just 10 minutes, a loan that equated to about 25 per cent of the overall

budget of the borough council.

At the time, and more recently, the council says that all due diligence was followed. David Mackintosh MP, who was then leader of the borough council, says he has nothing to hide and that proper process was followed. He says he would welcome an inquiry. He is not alone.

The unfinished East Stand at Sixfields Stadium

The unfinished East Stand at Sixfields Stadium

Earlier this year, the Chronicle & Echo obtained a copy of the loan agreement between Northampton Borough Council and Northampton Town Football Club, dated September 18, 2013.

Among the many clauses, one states: “The borrower shall use all money borrowed under this agreement for the redevelopment and improvements to Sixfields stadium (excluding the development of and any preliminary works required

for the development of hotel accommodation at the Mortgage Property), Northampton.”

The reference to Mortgage Property relates to the land surrounding Sixfields Stadium.

Flags on the East Stand. NNL-151027-151356009

Flags on the East Stand. NNL-151027-151356009

The club appointed an outside company, 1st Land Limited, to manage the development.

The arrangement was simple on the face of it. The football club would be able to draw down amounts of the loan from the council in up to

five stages; 1st Land would enlist a firm to survey the site and would draw up plans with an architect; while a set of builders – Buckingham Group Limited – would be sub-

contracted to build the stadium.

The sole director and shareholder of 1st Land was Howard Grossman, according to his legal representative.

Searches at Companies House show Mr Grossman has been either a director or a shareholder of 41 companies in his career, 30 of which are listed as no longer operating, some of which he has resigned from and some of which are currently in business. A representative of Mr Grossman said it was entirely normal practice to set up a ‘special purpose vehicle’ for each project and at the end of that project either liquidate or sell the company. The representative said this did not therefore indicate failed ventures and said the companies were, in fact, successful.

In March, 2014, the first sod was cut with the obligatory smiling photographs of all those involved, and Buckingham Group workers moved onto the site.

The building firm has an impressive stadium building curriculum vitae, with stadium:mk among its large portfolio. Buckingham Group was also the builder for

the new Barwell Stand at Northampton Saints, which started construction work in May and is completed, welcoming fans for the first time on Saturday. It took just six months to finish. No delays, no legal wrangles, just a straightforward job.

Initially at Sixfields, things appeared to be going to plan with West Stand improvements concluding swiftly.

But the first problems started to appear in October 2014. Workers downed tools and the East Stand development ceased.

Builders Buckingham Group Limited has since claimed it has only been paid £442,000 by 1st Land for the work done.

A spokesman for Buckingham Group said: “Our original Contract Value with 1st Land Limited for the construction of the new East Stand was £4.151m.

“But by the time we pulled off the site in October 2014, we were owed a total of £ 1.85m by 1st Land Limited,” the spokesman added.

As of today, it is still not fully known why the situation arose. Whenever the question is asked of 1st Land or Mr Cardoza, all parties cite a “legal agreement” gagging them from speaking in public.

At the time, David Cardoza explained that a “contractual dispute” had occurred between the football club and 1st Land.

What is known is that Northampton Town itself, and indeed a number of fans, were not happy with the initial plans drawn up for the stadium.

Back in June 2014, the chairman admitted there were issues with the initial designs.

The issues concerned how the East Stand would have a batch of seats with a restricted view due to the new design, that the work did not seem extensive enough for the money being spent, and that the attendance was only being increased by a few hundred as opposed to the 2,000-plus that was announced when the plans were originally made public at the end of 2013.

This original scheme had a contract value of £8.2 million and incorporated conference facilities, a banqueting suite with ancillary corporate hospitality facilities, new kitchens and a gymnasium.

But in the summer of 2014, it appears they were scrapped.

Plans for a reduced scheme – which Buckingham Group has described as a “bog standard stadium plan”, were then submitted in August 2014.

The new design had a revised contract value of £4.151m.

On January 7, 2015, with work stalled for three months, 1st Land, the company originally set up to manage the development went into administration.

The company claims it had ceased to have any dealings with the stadium development from August 2014.

Administrators Mazars LLP were called in to divide the company’s assets and compiled a report in which a statement of affairs listed 1st Land as owing 18 creditors a total of £2.6 million – the biggest of which being Buckingham Group at just over £2 million.

Listed as an asset of 1st Land’s is a company called County Cemeteries, which the administrator’s report states has an asset value of £233,306 - meaning effectively 1st Land had invested that amount in it.

County Cemeteries is understood to have been set up with the intention to bring to market a memorial wall product. Listed as shareholders for County Cemeteries were members of the Cardoza and Grossman families. It has since stopped trading.

Company director Howard Grossman was paid £314,128 in salary and expenses, the report states.

A company called County Homes (Herts) Limited was listed as a £1.47 million asset for “premises and infrastructure,” while David and his father Anthony Cardoza were listed in the statement as “£2.65 million” assets estimated to realise an “unknown” amount.

As for the administration report reference to the Cardozas, it goes on to say that 1st Land claims this was a “loan” to the Cardozas and that 1st Land is trying to recoup those monies. The report also adds that the Cardozas argue this £2.65 million was a “joint venture fee”. The Chronicle & Echo understands that the reference is disputed and that the chairman says he did not receive any money from 1st Land.

To further confuse matters, the report also suggests “Northampton Town Football Club” is disputing the statement of affairs, claiming to be owed a figure around £7 million.

Recent information obtained by the Chronicle & Echo claims that 1st Land was given a total of £8.75 million by the football club for the stadium development. A total of £1.5 million was held back by Northampton Town for works to the North Stand and a new big screen.

Both 1st Land’s directors and David Cardoza have again declined to comment on the record about any of the issues connected to 1st Land, citing the legal agreement.

The Chron has, throughout the investigation, put dozens of questions and evidence to both parties, but neither have said anything on the record.

By March 2015, work had stopped on the East Stand for around six months.

But there was some cause for optimism when, on March 25 this year, an announcement was made that workers would be returning to the site.

David and Anthony Cardoza assumed control of a company called County Developments (Northampton) Limited and took on contracting builders Buckingham Group directly.

Work did resume at the start of April 2015 and it was predicted a seated, completed East Stand would be ready for the new season in September.

But that optimism did not last long.

A spokesman for Buckingham Group gave its side of the story in a statement released last month.

He said: “When we returned to resume work on the East Stand on April 13, 2015, under a new JCT Contract with County Developments (Northampton) Limited, we were assured that funds were available to pay for completion of the East Stand. “Our first payment under the new contract was due on May 8, 2015 but was not forthcoming. On May 20, 2015 we issued a formal Notice to CDNL’s Agents to suspend works.”

Barely more than a month after the work resumed, workers were off site again and according to Buckingham Group, it was simply because they were not being paid, not because the Indian consortium of businessmen were looking at taking over the club and redesigning the stadium again. Mr Cardoza had said in a statement released on the club website and to the media that this was the reason for the ceasing work on the East Stand.

Speaking to the Chron at the time, director of Buckingham Group, Paul Wheeler, said the announcement that a consortium, led by Enfield businessman Ravi Rach, were interested in buying the club “could be seen as extremely convenient”, as it came a few weeks after Buckingham Group builders moved off site in June and acted as a distraction from the halted stadium development.

Mr Wheeler also told the Chron that he thought the consortium’s bid was “extremely unconvincing”. Mr Cardoza said that he had no reason to doubt the veracity of the Indian consortium and that it was intially seen as a genuine bid.

It was not until September 25 when the cracks really started to show in the club’s finances. An investigation by the Chron revealed that Northampton Town Football Club Limited had not been meeting repayments of the £10.25 million loan to the borough council – even though leader of the council, Councillor Mary Markham (Con, Park) had previously told the BBC that payments were up to date. She later said that she had not been briefed ahead of what was an impromptu interview and the payment had been missed just prior to the interview.

The Chron story was the first time any information had been given on the record about issues with the loan.

The council gave Cobblers 21 days to repay the loan in full or face legal action. That payment was never made despite the assurances of the chairman that it was “their intention” to meet the deadline.

Then days later it was revealed that the football club had not been meeting its tax payments. It currently owes the HMRC £166,000 in missed VAT and PAYE payments and faces a winding-up petition at the High Court in London on Monday unless the situation can be resolved before then.

The further extent of the club’s financial predicament slowly emerged, with news players and staff had not been paid while the club’s bank accounts were frozen. While the players were paid by the Professional Footballers Association last week, the backroom staff, most of whom have given many years of service to the club, still have not received their October pay packet.

Then on October 22, a High Court judge approved Buckingham Group’s petition to wind up County Developments Northampton Limited for what it claims was £2.989m worth of work completed on the East Stand.

The Cardozas decided not to contest the hearing, telling the Chron it was the best way forward to resolve the outstanding issues and sell the club.

It meant they lost the rights to develop the land around Sixfields.

That land – 33 acres worth – has planning permission for a retail park, conference centre, a hotel and up to 255 homes. Developing that land was how the Cardozas intended to repay the loan to the council. That option no longer exists, but it leaves the door open for the council to speak to other parties.

As the deadline moves closer, national media have shone a spotlight on the plight of Northampton Town.

In an article on Friday, the Guardian made a number of allegations regarding invoicing of plans by architect Stuart Loxton. It is understood that all parties dispute the allegations made.

The latest announcement from the borough council should buy the club time to confirm a deal with Mr Thomas and the consortium.

The priority this week is finding a deal that will save the club.

But the question of how the club finds itself on the edge of the abyss remains.

There must be a public inquiry into the situation and one that is open and transparent and gives everyone involved the opportunity to have their say.