EXCLUSIVE: Borough council to investigate concerns raised about chief executive's role in Northampton Town £10.25m loan

In a letter seen by the Chronicle & Echo, concerns that chief executive David Kennedy may have had a “conflict of interest” were raised by Northampton South MP David Mackintosh, who said he “understood Mr Kennedy had taken a holiday with a former director of Northampton Town two weeks before the loan was agreed”.

Mr Mackintosh said he was also concerned that Mr Kennedy was “effectively overseeing the inquiry into himself”.

The letter was addressed to the chairman of the borough council’s audit committee, Councillor Penny Flavell (Con, Rushmills).

Mr Kennedy was approached for comment and, in response, a spokesman for Northampton Borough Council said the allegations had been passed to the council’s monitoring officer and all the relevant bodies investigating the loan. He also said the allegations would be taken seriously and “fully investigated”.

The spokesman also said that the overall inquiry into the loan deal was being overseen by the leader of the council, not the chief executive.

The former director of Northampton Town referred to in the letter, David Jackson, strongly denied any suggestion that he had discussed the loan deal with Mr Kennedy. He also said they were “acquaintances” and that they had not gone on holiday together but Mr Kennedy was a guest at his wedding in Spain. He added that all negotiations over the loan deal had only involved former chairman David Cardoza, and not him as a director.

At a cabinet meeting on July 17, 2013, council chief Mr Kennedy was delegated the authority to approve “the amounts and terms” of any loan arrangement with Northampton Town Football Club, in consultation with the then leader of the council, Mr Mackintosh, and the chief finance officer.

The £10.25 million handed to the Cobblers over the next year was meant to fund a stadium expansion, and at least £8.75 million was passed on to the developers 1st Land Limited.

But as has been widely reported, only £441,917 was ever passed on to the builders Buckingham group, the East Stand was not completed and the football club defaulted on its loan repayments.

A number of investigations into what went wrong were launched in January this year.

The letter sent by Mr Mackintosh to Councillor Flavell raised his concerns about Mr Kennedy’s role in the loan handling and its subsequent investigation.

Mr Mackintosh said: “I have been told that the chief executive was on holiday two weeks before the loan was agreed by cabinet on 17th July 2013 with a then director of Northampton Town Football Club.

“I would like the auditors to investigate this claim and to query whether this should have been declared to cabinet as a conflict of interest by the chief executive and what issues arise from this, if correct.”

The MP also claims he was not “made aware” as then leader of the council of any concerns raised by senior officers when they checked whether Northampton Town had the financial capability to repay the loan in 2013.

He said the Conservative-controlled cabinet at the council were not made aware either.

He added: “I was not aware of of any concerns during the due diligence process but I hope the auditors are looking into this process.

“If concerns were raised at this stage then I would question why this information was not given to me as leader or to cabinet members who made the decision on the loan.”

In response to an inquiry by the Chron, Northampton Borough Council said it would look into Mr Mackintosh’s allegations.

In response to the allegations by Mr Mackintosh, a council spokesman said: “The circumstances around the granting of the loan to Northampton Town Football Club and what happened subsequently are being fully investigated, with reviews by internal and external auditors and by Northamptonshire Police.

“The review process was instigated by, and is being overseen by, the leader of Northampton Borough Council, Councillor Mary Markham.

“Allegations have now been made to the chair of the borough council’s audit committee, who has passed these to the council’s monitoring officer and to all the bodies currently reviewing or investigating the loan. The allegations will be taken seriously and these will be fully and appropriately investigated in accordance with normal policy.”

Former director of Northampton Town Mr Jackson told the Chron that he and Mr Kennedy had not “holidayed together” as suggested. He says Mr Kennedy was instead a guest at his wedding in Spain along with about 20 others on June 29, 2013.

He also says the two men never discussed the Sixfields loan as all negotiations from the football club’s side were handled by then owners David and Anthony Cardoza.

Mr Jackson resigned from the football club board in 2014, he says, because he was not kept in the loop by the Cardozas and because he “didn’t like what was going on” at the club.

Of his relationship with Mr Kennedy, Mr Jackson said: “We genuinely didn’t talk about it (the loan) – the Cardozas owned the football club. I didn’t have any loan conversations with anyone, not David Kennedy or David Mackintosh.”

He said he and David Kennedy were more acquaintances than friends, having first met in late 2011 to 2012. Though he said the two men were on the same trip to a food festival in Ireland in October 2013 also, along with “around 12 other people,” he said.