Trouble in the boardroom

December 19th, 2008

arsenal_logoStrange things are afoot at the Grove.

With a share of the club of over 20% between them, the future ownership of the club is in doubt as reports surfaced yesterday that Lady Bracewell-Smith and Richard Carr have left the Arsenal board. [1]

So what exactly is going on behind the scenes at Arsenal?

In times of increased overseas ownership and investment in English Premiership clubs, Arsenal have been one of the few top clubs to resist foreign ownership.
However this started to change last year when Russian billionaire Alisher Usmanov started buying up shares in the club.

Usmanov’s millions

alisher_usmanov_arsenal_putin

Usmanov meeting with Vladimir Putin

Usmanov’s investment led to the departure of long time Arsenal vice-chairman David Dein, as the boardroom was divided on the issue of whether to accept or resist this foreign investment.

Usmanov created an investment company called Red and White Holdings in his attempts to take ownership of Arsenal, and, having purchased David Dein’s stake of 14% of the club, appointed Dein as his head of investment.

Usmanov’s dealings led to the current Arsenal board of directors creating a ‘lock-down’ agreement, with chairman Peter Hill-Wood announcing that current Arsenal directors would only sell their stake to persons approved by the other board members before April 2009, and would give first refusal on share sales to other board members until October 2012.

Usmanov has since increased his holdings of the club to over 24%,  over-taking Danny Fiszman to become the club’s largest shareholder. Under Rule 9.1 of the British Takeover Code [2], Red and White holdings would be required to make a mandatory takeover bid for the club once their ownership reaches 30%.

The ousting of Bracewell-Smith

lady_bracewell-smith_arsenalQuoted in the Daily Mail today [3], Bracewell-Smith commented on her removal from the board by unanimous decision:

‘I’m in total shock and very upset about the appalling way I have been treated, the board have no manners whatsoever and my views were ignored on many occasions.

‘I can’t understand why I have been removed in such a ruthless fashion. I had no intention of selling my shares and was no threat to the lockdown agreement between the directors. I have also had no proper explanation as to why they wanted me out so much.

‘It is very difficult to accept, especially after what my family has done for Arsenal for so many years.

‘I am extremely upset at what’s happened and the way it has been done.’

‘There is no way Richard (Carr) would have agreed to this, he’s family. I’ve never had a thought of selling my Arsenal shares, and I still don’t.’

Despite Bracewell-Smith’s assertions in that interview that she does not intend to sell her shares; her removal from the board, and therefore the lockdown agreement, leaves the future ownership of the club in doubt. Her 15.9% share of the club, said to be worth £75 million, would be more than enough to trigger an Usmanov takeover if he were to buy her shares.

Bracewell-Smiths departure, said to be orchestrated by Danny Fiszman [4], raises questions not only about Fiszman’s intentions, but also the future ownership of Arsenal.

So what do you think? Would you like to see Arsenal stand firm and remain British owned and controlled, or would you like to see the club go the way of the the other top clubs with large amounts of foreign cash to buy players?
Have your say in the comments.

Tags: boardroom, ownership, shares

2 Responses to “Trouble in the boardroom”

  1. Arsenal draw Roma in Champions League | Arsenal Online Says:

    [...] Director Danny Fiszman spoke about the draw, [...]

  2. samsuel Says:

    hi i want u to try asmuch to qualify for chanpion leag next season bcos is not propert for arsenal. the whole big club

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