HM Revenue & Customs (HMRC) is challenging the administration of premier league football club Portsmouth FC.
At a hearing in the High Court this morning, Gregory Mitchell QC, for HMRC, told Norris J that although, “in principle”, it supports the administration, it wants answers to its “necessary and reasonable” questions before it will abandon its own winding-up petition against the club over a disputed £7.4m VAT liability that arose from player transfers and a £4.75m liability for unpaid PAYE and national insurance.
Mitchell said that HMRC and the public had the right to ask how, according to a statement of financial affairs produced by Vantis, this “once great club” now has liabilities exceeding its assets by £65m.
“We say serious questions arise that need investigating as to what financial dealings there have been between different owners of the club and between the club and its owners… which at the moment are entirely shrouded in mystery”, he said.
He said that HMRC was concerned as to whether the administrators had been validly appointed and called for a full investigation into transactions between the club and its current owner Balram Chainrai in order to ensure that the administrators will act with complete independence.
He also raised concerns over whether an administration was feasible at all as even in administration the club will need £7m to take it to the end of March and £14m to the end of May.
“We say that if there is no proper evidence of funds to meet the clubs needs, there is a real danger that the administration will fail to achieve its proper purpose,” he said.
