• Robert Gammon

Charlton Athletic are at Breaking Point

The last few days looked positive for Charlton Athletic, talisman midfielder Jonny Williams and goalkeeper Ben Amos both renewed deals at the club despite relegation. There were even hints at transfer deals being made. But reality has come crashing down with the latest EFL (English Football League) statement.

The Statement

The statement says that three individuals have not passed the Owners and Director’s Tests (OADT) 'following a full and comprehensive appraisal'. It also has been confirmed elsewhere that transfer deals for other players have been rejected as Charlton are under a transfer embargo.

What does this mean. Well in the latter case it shows what most people knew, that Charlton only had the ability to renew current deals and are likely to have a depleted squad next year.

As for failing the OADT this is what we know.

The Three Individuals

The three individuals that were rejected by the EFL have not been named by any official source, neither have the reasons for why they were rejected. Two of the names have been leaked but have not been confirmed. The names are as follows.

  1. Paul Elliott - Public face of ESI since July

  1. Chris Farnell - Club lawyer - oversaw Bury’s expulsion from league football

  1. Unknown

The fact that we are not sure of the three individuals and only have been hinted at is a concern in itself. Furthermore, when the face of ESI (East Street Investments - owners of Charlton Athletic) cannot pass these tests that is extremely worrying. It means that the EFL are not satisfied that either he hasn’t failed any criminal matters, has had business history that rejects his possibility or he is subject to any disciplinary matters. The other option is that he fails to be a ‘Relevant Person’ and doesn’t have a big enough stake in the club to be considered.

Chris Farnell has also been touted as a rejected person. He is currently working for Charlton as club lawyer and was previously a director of ESI under Nimer. If this sounds confusing, that is because it is. The EFL are likely to be just as confused and could have rejected him due to this back and forth of ownership. It also could be because he is being investigated by the Solicitors Regulation Authority and a Relevant Person fails the OADT if they are subject to suspension or ban ‘(ii) by a professional body (including, by way of example and without limitation, The Law Society, Bar Council or the Institute of Chartered Accountants, equivalent bodies in any other jurisdiction’ - EFL Regulations OADT.

The Implications

So what does this actually mean and what happens if Charlton fails their appeal on this matter?

To make a complicated situation clear. The EFL cannot stop a business dealing, therefore they can not stop a football club changing hands. ESI’s business dealing are not able to be reversed by the EFL. What the EFL can do is put sanctions on that club if its business is not up to its standards.

So with the club not meeting these regulations by failing the Owners and Directors test, Charlton are in a precarious position. Looking at EFL regulations, Charlton is guilty of misconduct. The penalty of which could likely be expulsion from the Football League. I have broken down why this is the most likely possibility in another article.

Going Forward

The options Charlton has available to avoid such a fate is for ESI to win its appeal, which with the complexity of the mess that Charlton are in at the moment seems unlikely.

The other option is for ESI to sell the club to individuals who meet that criteria. Fans know of at least one credible would-be owner in the form of Andrew Barclay, fronted by trusted former CEO Peter Varney, so this is also a viable option.

You would think that the solution to the problem would be to sell the club to these owners (remember ESI bought Charlton for £1). However there is a worry that Charlton is being held for ransom, ESI using the threat of expulsion to force affected individuals to pay over the odds and get ESI personnel a pay day. If not let the club sink and strip it of its assets such as a football stadium sized plot in London.

This happened to Bury, with the same Lawyer.

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