EC, Lillie Bridge, the residents fight on and those dodgy shares

A long blog this week in order to cover two interesting aspects of the EC development.

In recent weeks, we have drawn attention to the Lillie Bridge depot, in particular blogs by The Guardian's Dave Hill and other bits and pieces suggesting that the necessary sale of the depot to CapCo for the larger EC development was not a foregone conclusion.

In March last year we wrote in this blog;

" Boris, in his capacity as Mayor, is the largest landowner of the site as he owns Lillie Bridge through TfL and the Earls Court Exhibition Centre (ECEC) freehold which is leased to CapCo. Reference to Lillie Bridge Depot as being a critical issue has come to our attention before and this is a strong hint as to why that nugget was placed before us."

We have also been recently drawn to an appearance before the London Assembly by Graeme Craig, commercial director of Transport for London. He was questioned about the current TfL business plan.  According to Craig;

"Lillie Bridge depot – there are assumed revenues in the business plan. Not £200m, as it happens, from development at Earls Court." Craig explained. "But the business plan doesn't assume any disposal of Lillie Bridge depot. That's in part because we haven't yet carried out the work on – or the work hasn't been completed – on the feasibility of removing the operational infrastructure and the stabling at Lillie Bridge Depot. So there's work underway on Lillie Bridge Depot and we should know by the end of this year as to whether it will be developable as part of the wider Earls Court Masterplan."

So the long standing nod and wink (we were first given a steer as to the criticality of Lillie Bridge well over a year ago) is starting to form into an interesting reality. The difficulty is in predicting what it means or what will happen. It is our instinct that TfL will eventually sell but that they are determined to squeeze as much value as possible from its sale. It is clear they themselves don't consider that to necessarily be as part of the EC Masterplan. CapCo are having to wait until the end of this year to know whether Lillie Bridge is going to be made available to them and how much it will cost which is presumably a pretty alarming prospect; or maybe it is an opportunity?

We can think of one or two scenarios emerging here....but even in a positive light, it might appear like a conspiracy theory so, for now, we will allow our readers to speculate alone...

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Still at EC, residents of Gibbs Green and West Ken estateshave had a knock back in their latest application for judicial review but won something of a moral victory when the council's application for costs was firmly rejected by the judge.  Residents return to the High Court on July 17th for a substantive hearing to consider their challenge to the Council's planning policy that underpins the Earl's Court scheme. However, in this case, the judge makes some profoundly interesting comments.

"At an oral hearing on Tuesday 23 April, sitting as a deputy High Court judge, Clive Lewis QC refused permission for judicial review of Hammersmith & Fulham Council's decision to sell the West Kensington and Gibbs Green estates to Earl's Court developer Capco. At the same time he dismissed the Council's application for costs.

 In his judgment, the Judge said:

The Claimant is Mr Greatwood. He is a secure tenant on the West Kensington estate. He has lived there for 20 years. It is his home. It is not surprising he is concerned and worried about this proposal. It is not surprising that he has brought the matter before this Court. He is supported by a number of other tenants who are also concerned, as you would expect, about the impact on their homes and the places where they live. Mr Greatwood, has, if I may say, put forward his arguments carefully and moderately.

I pay tribute to Mr Greatwood and his supporters for the careful, considered and moderate way in which they have put these arguments in this Court.

Firstly, I take on board the point that this is a matter of very great importance to Mr Greatwood and his friends. He is a secure tenant on these estates; he has lived there for 20 years. This is his home. He was perfectly entitled, in my judgment, to challenge the lawfulness of the decision. Secondly, the way he has conducted himself, in my judgment, is exemplary. He has done everything he can to assist this Court by focusing his arguments and taking points that appear sensible. He has done everything he can to marshal quite difficult material and papers. In my judgement, his conduct cannot be criticised in any way whatsoever.... So, in my judgment, it would be inappropriate to order the costs of the Acknowledgment of Service. So, whilst I fully understand the application made by the London Borough of Hammersmith & Fulham … the application for costs is dismissed.

Upon advice, the Claimant has decided not to appeal the Judge's decision. Harold Greatwood said:

I'm not going anywhere, and I know that the majority of my neighbours shall also be staying put. We're back in court this summer. It's far from over: we fight to the bitter end.

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And finally.....

A little birdie tells us that the number of shares still in dispute after the s793 letter farrago is fewer than 100.... Considerably fewer in fact.

Section 793 letters

And so the much heralded and expensive process to "out" "fraudsters" has been more or less concluded with the following statement from the CPO board;

"Further to our statement after the deadline for replies had passed, we can confirm responses were received in respect of 42 of the 47 shareholders who were contacted. Of these 42, one shareholder is now deceased, two disclosed an interest of their children in the shares, one parent responded on behalf of a child and the remainder did not disclose any interest of any other person in their shares.

We can also confirm that we are chasing responses from the five remaining shareholders and are taking legal advice as to what action, if any, to take."

There was much glee and anticipation of fireworks when the initial statement mentioned that the board were seeking legal advice and we ourselves were accused of trying to cover up something dramatic. We preferred to wait until we knew precisely what the legal advice was being sought for. Now we know; not much at all as it turns out.  However, it is necessary to examine what we know of this process.

Let's remind ourselves first of all that letters were sent to those holding ten or more shares. Ironically, we are pretty certain that some of those throwing most mud will themselves be in control of a few hundred of the shares in question but we digress. The majority have responded appropriately  - in which case, the matter is essentially closed in relation to them. Five people have not responded, so there are now anything between 50 and 500 shares "unaccounted for". We don't know the precise figures. 

Let us assume for the sake if argument that five hundred shares are now in question (logic dictates it will be far less than that but, anyway..) it would be wrong to presume that these shares are actually used to vote or would be used to vote in a way that supports the club's desire to move to a new stadium. One could inspect the documents as laid out for scrutiny by the CPO board to determine some facts but we would support the board's very firm warning on harassment, abuse and contraventions of data protection (how very sad that such a bleak warning had to be issued). 

We hope the board are able to track down the five individuals and get an answer from them. It would also be helpful to know how many shares are held by these people. The most dramatic outcome will be the removal of voting rights for 500 shares, which isn't, actually that dramatic when you consider the SayNo mantra about 2500 "dodgy" shares. But such action is costly and fraught with dangers.

We would expect the cost of this exercise to have been high and it might have been worth it if we felt it would finally close the matter. We find it bewildering that those who insist on such processes are those who both complain about how much the board spend on legal fees and at the same time attack the board for their efforts to raise funds. A cruel and perverse irony for sure. 

They also object to the selling of more shares - and we have a pretty good idea why - but raising funds and selling more shares is precisely what the board must focus on now. It is difficult to fathom why some people would pursue agendas that could lead inexorably to one outcome; the demolishing of CPO by the club. If they so fervently believe that the club have been trying to influence the work and process of the company, why on earth do they insist on creating the conditions where the club could in fact simply penalise it for not paying its dues?

As we said, it would be nice to think that this exercise will end, once and for all, the toxic share topic but it is inevitable that new theories will emerge. But we will hope nevertheless.

CPO Fundraising Dinner

We have been sent the following.  We are happy to help promote the event. CPO needs money.

WRITTEN IN THE STARS

A Celebration of Chelsea's 2012

Champions League Triumph 6.30pm for dinner @7.30pm

17th May, 2013 Harris Suite, Stamford Bridge

One year on, come and relive all the thrills of our magnificent 2011/12 UEFA Champions League Campaign at a fundraising event for Chelsea Pitch Owners plc

Join the reunion dinner at the Harris Suite, Stamford Bridge on 17th May, 2013 in the

company of special guests, including a question and answer session with our skipper on that glorious night in Munich FRANK LAMPARD

Hear personal recollections and enjoy video replays of the glorious victories over Valencia, Napoli and Benfica, that unforgettable epic with Barcelona and, of course, the incredible final in Bayern's own back yard.

They said: UNSERE STADT, UNSER STADION, UNSER POKAL

We said: YOUR CITY, YOUR STADIUM, OUR TROPHY!

Tables for 10 @ £1,100.00 (inc VAT) per table

Includes a three-course meal and one CPO Share per table,

to be raffled during the evening

To book your table email pat.saville@frankham.com or call 020 8309 2705

Just SayNo.

It is hard to work out just where our old friends at SayNoCPO fit in these days. Reduced to a rump of about two and a half people (the rest have decamped to establish the Chelsea Supporters Trust for a bit of mainstream politicking) their cheerleader in chief drones on in his typically inflammatory, pub-lawyer style on CFCNet this month. This time it is in relation to the letters that were sent to multiple shareholders and no doubt they are beginning to realise it might not produce the results they want. Here is a selection of phrases pressed into action;

"Weeding out the fraudsters"

"Obvious deception in progress" 

"CFC's web team has been trying to meddle with the facts again"

...and so on. It's like a wet weekend in a Pyongyang press office.

Whilst everybody else appears to be trying to move forward, SayNo want to keep us all mired in the share issue. They even want to have access to Electoral Reform records to see how people voted! We find all this deeply sinister; reveal an individual - any individual- to have voted in favour of something SayNo don't like and use it to smear them in some perverse way. 

Almost everybody else has realised that selling more shares to fans is the way ahead.

Surprisingly, SayNo don't seem to support the efforts to raise much needed funds either;

"We must also seriously doubt if anyone will be willing to help a Chairman raise funds for CPO as he now pleads, when he has done so little during his 17 months at the helm to cleanse the company of fraudsters and profiteers?"

This strikes us as a little spiteful and counter-productive. Frankham has said he would try to get things going on the fundraising front and as far as we know, three meetings have been called but not all have been well attended. Either people want to support the idea or they don't. The fact is that the cub require CPO to pay back the loan - it is that simple - and if they don't, the club could fold CPO.

And here is a thing; a very significant number of people are beginning to think that this may well be the best thing to happen. We ourselves frequently receive emails to this effect. 

With EC in all sorts of trouble (the latest being a serious doubt over TfL's readiness to release their land to CapCo) and with all eyes on the bullish, tries-so-very-hard UK boss of the BPS development company, to see if he can deliver his bold claims for his wary Malaysian bosses,  it is essential that CFC is not hamstrung. If CPO continues to be used as a device for those wishing to attack and denigrate, we can only imagine that the club will see benefits in CPO failing to pay off the debt. As such, we would suggest everybody does what they can to help the fundraising effort.

Chelsea Football Club is trying to get a billion pound project off the ground and we can hardly expect them to be too tolerant. We suspect for PR's sake that the club will be reluctant to crush CPO but they won't take much persuading should all of this nonsense continue and the board fail to meet financial obligations. That is undoubtedly the reality we face as shareholders.