David Conn- 23 August 2012 Reading's new owner Anton Zingarevich, left, and Sir John Madejski, who sold the club to his company for an eventual £25m.

Reading's promotion under the new ownership of Anton Zingarevich has meant that this season a majority, 11 of the 20 Premier League clubs, are owned by overseas individuals, with several, such as "the Royals", now held ultimately in tax havens. Reading, formed in 1871 at a public meeting in the town's Bridge Street Rooms, are owned by Anton, the 30-year old son of the St Petersburg-based pulp and paper billionaire Boris Zingarevich, via Thames Sports Investments (TSI), registered in Gibraltar.

Siting the shares of companies, including football clubs, in offshore locations such as Gibraltar or the Cayman Islands (the Glazer family's newly registered base for Manchester United) means owners avoid UK capital gains tax and stamp duty, when they sell the shares at a profit in the future. Such havens also offer to investors a guarantee of secrecy, about who owns or is involved in companies registered in them. John Christensen, a director of Tax Justice Network, which campaigns against the vast draining of money from tax-paying countries such as Britain, says tax havens should more justifiably be known as "secrecy jurisdictions".

The key figure at Reading in enabling the sale by the outgoing owner, Sir John Madejski, to Zingarevich, agreed in January and finally approved by the Football and Premier Leagues in May, was Christopher Samuelson, a veteran manager of funds in offshore locations. Samuelson is a director of Mutual Trust SA, an investment firm based in Switzerland, which also operates a low tax regime and long tradition of secrecy about banking and financial ownership. On its website,, undergoing reconstruction, Mutual Trust carried the assurance: "Our challenge is to provide our clients with their fundamental rights to privacy of their information and to protect their assets from attack and confiscation … We will not use jurisdictions that do not respect and uphold the fundamental right of clients of confidentiality. Your information is safe in our hands, for always."

Given the intense scrutiny as the game's profile has soared, and the clubs' continuing claims to be at the heart of their local communities, more information about ownership is now revealed than about companies operating less in the public eye. Madejski, who made his own fortune in printing and with the Auto Trader second-hand car catalogue, had long been looking to remove himself from the financial burden of owning a club whose new stadium he built 14 years ago. In the year to June 30 2011, the latest for which accounts are available, Reading made a £5m loss in the Championship and Madejski had personally loaned the club £26m.

Samuelson was approached to see if he could find a buyer and finally he concluded a deal with echoes of the mooted one for Everton in 2004. Then, Anton Zingarevich, 21 at the time, was involved in talks to take over the club, with the money to come from a fund managed by Samuelson based in Brunei. Boris Zingarevich, an industrialist who his representatives say has built a paper company, Ilim, from scratch over 20 years, rather than becoming a billionaire through favourable state sales of assets, like Russia's oligarchs, said he was not interested in English football.

This time Samuelson did deliver a deal to buy Reading, and both Madejski and Samuelson's TSI vehicle have been open about the terms of the deal. TSI bought 51% of the club for £12.7m, and has an option to buy the other 49% for £12.3m. That is £25m to buy a well-run club with a new stadium, now in the Premier League. The deal was one in an increasing tendency for overseas buyers to target clubs in the Championship, where they pay less than for those in the Premier League, and aim to grasp a financial jackpot if they win promotion. Leicester City, bought by the owners of the King Power duty free franchise in Thailand; Cardiff City, owned by Malaysian investors, and Nottingham Forest, bought this summer by the Kuwaiti Al Hasawi family, are in the vanguard of that process.

Madejski agreed his sale, at what many believe is a bargain price for the club he rebuilt, with Reading still in the Championship; he completed for the same figure despite Brian McDermott's side triumphantly claiming promotion, although Samuelson has said Madejski was paid a £5m bonus.

After sundry mishaps, collapses and scandals, both the Premier League and Football League have developed new rules and procedures before approving new owners, and the Football League led the four-month process at Reading. The requirements for owners and directors of clubs, formerly known as the "fit and proper person test", are that anybody on the board or owning more than 30% of a club must not have unspent criminal convictions for dishonesty, be bankrupt or have been involved in the insolvency of two football clubs since 2004. Both leagues now also require proof that the money is there, as committed, to buy the club, and to see a business plan which shows the club will be able to remain solvent and fulfil its fixtures for the season ahead. Both leagues now employ corporate intelligence companies to gather information, mostly from public sources and press coverage, about prospective owners. The Premier League also makes inquiries of the Home Office and Foreign Office to ask whether the government has relevant information about prospective owners.

At Reading increased scrutiny was prompted by the collapse of Portsmouth, where the owner from 2005, Sacha Gaydamak, a Russian in his 20s, always denied his billionaire father, Arkady was involved or had provided the funds. Anton Zingarevich, who has repeatedly described owning Reading as "a dream", and pledged to run the club responsibly, has said the funds to pay Madejski came from "family money".

Artem Savko, a spokesman for Ilim, Boris Zingarevich's pulp and paper firm, : "Ilim has nothing to do with Reading, nor football," and a source close to Zingarevich said he has nothing to do with the Reading acquisition. Anton is understood to be involved on the construction side of his father's personal businesses, and not to work at Ilim in any capacity.

Ultimately the Football League took the view that the millions for Anton to pay Madejski via Samuelson's Gibraltar vehicle could not wholly be separated from his billionaire father. So Boris Zingarevich, while not a director of the club or TSI, was required to certify his suitability under the owners and directors test, which applies to anybody who could be said to exercise "control" over a club. Samuelson, and Andrew Obolensky, a director of TSI, have also been certified.

Samuelson's son John is the other director on the board of TSI. "The Premier League's financial criteria seek to ensure responsible and sustainable ownership," a league spokesman said, explaining that it is examining whether further regulations are required. "Each club's ownership model is compliant with UK company law."

That is true. The clubs, as ever, reflect their times and country, in which so much is up for sale and use of offshore havens to avoid tax has become routine.{jcomments on}

The Guardian

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