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Belokon v Oyston Court Case


Reserve Team Regular

Jun 13, 2017, 7:14 AM

Posts: 694

Post #1 of 9 (4418 views)
Belokon v Oyston Court Case Can't Post or Reply Privately

From Day 1 (original is on the AVFTT site)




Original negotiation was for 50% of the shares for £4.5m but this was changed at the request of Owen Oyston because his opportunity to recoup tax losses would be lost.

Consequently VB paid £1.8 for shares and soft loans for £2.7m on an informal understanding the loans could be converted to equity to achieve parity.

There was an understanding that save for loans to OO and Segesta there’d be a clean break with the past i.e. OO’s previous investment in BFC.

There was an agreement that BFC can use the stadium rent free. Major feature of Respondents case re BFC loan to Segesta was club’s use of the stadium rent free.

The loans – £2.7 plus £1.8 comes to £4.5m originally discussed. VB says this is compelling evidence the loans part of overall agreement not stand alone. Loans a mechanism by which balance of £4.5 m for parity of shareholding was paid. Once tax losses utilised additional shares would be issued to achieve parity.

Respondents case loans separate commercial investments once VB decided not to invest more than £1.8m in BFC.

Interest free and unsecured and might not ever recover full amount. Made no commercial sense as free standing agreement rather part of a wider transaction and method of providing balance of price originally discussed.

Second loan of £1.7m interest free and unsecured. Also £850k would be transferred to BFC as a gift with balance being used for south and south west stand. So VB guaranteed to lose £850k again so can’t be regarded as a free standing agreement.

Segesta failed to comply with order in the Manchester proceedings. Appealing but no stay agreed.

Trust agreement £1.5m for players. Originally 70/30 split in favour of VB and he was carrying all losses. VB voluntarily agreed to reverse the split. Generous approach by VB consistent with quasi partnership.


Not unusual for stadium to be held in a separate company from the football club. So not unusual for money to pass from club to holding company.

Bread and butter of the club is the gate money by attracting fans. Improve the stadium.

Club virtually bankrupt when OO took it on.

VB experienced businessman; could have used UK lawyers to advise.

Loans separate from the shares: if they’d been repaid couldn’t be used to convert into equity.

VB pleaded case flawed.

No binding agreement re additional shares.

No enhanced rights for VB that you’d expect in a quasi partnership.

When untold wealth came into the company VB wanted additional shares. OO refused “as he was entitled to do”. VB very upset. Wanted to exit the club as he considered “trust irrevocably broken down between us”.

Club always run on prudent grounds £60m spent on players and wages since 2010 season.

After 2011 VB’s goal was to get out of the club with maximum amount from the Os. Wanted £24m for shares and interest under the investment agreement.

To the Press and fans VB held himself out as knight in shining armour and suggested he wanted to take over the club. But no offer ever made. When asked if he wanted to buy the Os shares he wasn’t interested.
Money taken out was spent on football projects. £4.2m to Protoplan: VB amicable afterwards.

Also looking for businesses to produce non-football revenue for the club.

VB wanted dividends. Do the fans know?

Complaints re new articles contrived.

Compared with old articles that VB accepted. Claimed dividends not permitted.

VB encouraging media and fans. Wining and dining them in Latvia. Led to pitch invasions and boycott. Aim was to pressure the O’s to buy him out.

Zabaxe payment. Had effect of reducing tax bill. Dividends would have had adverse tax effect.

O’s felt morally entitled as compensation for 20 years support.

VB offered £2m div in 2011 but no response. Os would also have been entitled but suggested they would have waived.

Zabaxe would have lent money back to the club.

Payment approved retrospectively by Normunds Malnacs.

Couple of days after board approved it was leaked to the Daily Mail. Only VB or NM could have done it. Deliberately leaked.

Only £1.6m or £1.7m used on non-football projects.

BFC have a state of the art stadium.

Application for valuations to be dealt with in a separate trial. Declined. Will try to deal with everything in one hearing but will keep under review.

VB giving evidence 10.30 start tomorrow (Tuesday).

Reserve Team Regular

Jun 13, 2017, 7:41 PM

Posts: 694

Post #2 of 9 (4289 views)
Re: [MrTangerineMan] Belokon v Oyston Court Case [In reply to] Can't Post or Reply Privately

Day 2



VB gave evidence via interpreter.

Witness statement confirmed and cross examination started.

O's QC questioned VB on alleged contradictions between the pleadings and his witness statement. Involved his understanding of whether there was an agreement or just a common understanding that his loans would convert to additional equity and achieve parity once tax losses utilised.

VB said his understanding was it would be 50/50. O's case is that it was only a possibility the conversion might happen.

VB pressed on price to be paid for 50%. £4.5m less the £1.8m already paid for 20%. VB felt he'd already paid for the shares.

Loans by Vlada (VB's daughter). Also talk about Natalie becoming involved.

VB said he'd have gone ahead even if BFC hadn't been promoted.

When pressed on alleged discrepancies between various documents VB said he wasn't sure he'd read them before signing.

Put to VB that there was no reference to this agreement in the legal documents. VB said That would have resulted in loss of tax losses. The agreement was "private to private between gentlemen".

Counsel suggested this was potentially a fraud on HMRC if had an agreement not included in the legal documents.

Judge interrupted. Counsel making subtle points "Witness neither skilled in English law nor is English his first language".

VB pressed about whether when the agreement was reached other people were present. VB said he wasn't sure but both teams understood the intention.

There were several meetings in English without an interpreter present. Counsel suggested VB may have misunderstood.

VB didn't keep notes.

In Manchester case he gave evidence he didn't make informal agreements. VB said that was his practice with foreign clients.

VB pressed on when and where meetings occurred and who was present. He couldn't recall details.

Common ground that the initial discussions were for a 50/50 split via a new co. Not possible for tax reasons and EFL rules.

After a break VB questioned about the arrangements re running of the club pending conversion of the loans to equity. Were profits to be shared equally? VB replied

"Not just profits but also losses"

Counsel referred to early draft of subscription agreement which recorded 50/50 split and 50% split of profits. Put it to VB that this is what he was thinking of and he was confused.

"I don't agree"

It wasn't clear whether VB properly understood the question. Judge stepped in and emphasised the importance of the question. VB said he understood it was 50/50.

Counsel referred to correspondence from VB's in house lawyer and references to various draft documents (letter of intent and option) which recorded the 50/50 deal.

Counsel said proposals and counter proposals made. Usually look at the final signed agreement for definitive position. No references to 50/50 in that paperwork.

Counsel made the point the loan agreements made no reference to the equity conversion. They were stand alone agreements.

Counsel confirmed the option failed for tax reasons.

References in correspondence to a hand written agreement that no one has been able to find.

Counsel referred to a letter from VB in house lawyer that separated the shares from the loans - take it step by step. There would be further discussion about increasing his holding to 50 percent. VB was concerned the club wasn't doing well and was changing his mind. VB said that wasn't the case.

This step by step approach was reflected in the documents signed.

Break for lunch.

Restart after lunch
Brief continues questioning of VB.
Details of whether VB understands the difference between believe and understand in the document are asked. Did VB have the understanding as Oyston?
VB claims OO did have the same understanding. There were discussions of how they would work together.
VB wanted to be a partner with OO.
Brief: Equal partners?
VB: Yes, the future would be based on common understanding.
Brief: Parity? What do you believe by that?
VB: We should be 50/50 partners.
Brief: Are you certain about that?
Brief: You can't remember the exact words used?
VB: I believe 50/50. We would be together for 1000 years.
Brief: Did you understand that no decisions could be made by BFC directors without the consent of your company?
VB: Yes. We were supposed to discuss everything. If not we go to court.
Brief: What if there's a disagreement about who chooses the team manager?
Would the Os be able to appoint if you said no? Did you have a right of veto?
VB: Yes
Brief: Nothing has been written about this. Nor has anything been written about shares.
B: Re Subscription agreement. Questions about the two days of negotiations follow. E.g. Provisions made to protect BFC but not VB's company.
VB: We don't have it on paper.
B: Why didn't you protect your company?
VB: I don't know
B: No clause for you to have a representative on the Board of D at BFC
However a doc from OO states that you will be a director at BFC but with far fewer responsibilities than a usual director.
Judge intervenes to clarify the point re appointment of director.
VB gives the appearance of either being remarkably trusting of OO or rather naive about the details of the agreement between them.
Judge asks if VB went through agreement.
VB: Somebody read it for me.
J: Who
VB: probably my lawyer.
VB says he doesn't quite remember the detail.
B: Is your memory of these events faulty?
VB: Possibly. Some things I don't remember
B: Did you mix up, after such a long time, the details?
VB: No. I understand what the partnership meant.
Detailed review of agreement follows.
VB shrugs his shoulders when asked about the detail of the agreement with OO. VB appears to be struggling with the detail of the B's very close questioning. He remembers discussions but not the detail. His team did not have the ability to make notes on the agreement. Segesta did take detailed notes. VB claims that it was only an oral agreement but Segesta wrote the agreement on paper.
O's brief building a case to suggest that any idea of parity does not appear on paper. Segesta always intended to remain majority share holders in BFC.
- A considerable amount of time is being added to the length of the case due to VB's frequent need for translation. -
B questions VB as to why his daughter, Vlada, was involved in dealings with BFC. £1m loaned to daughter for her to lend to Segesta. VB suggests that it was done due at OO's suggestion.
B: Do you have a loan agreement with your daughter?
VB: Yes
B: Where is it?
VB Struggles to provide written details.
Brief enters a period of close questioning of VB regarding his daughter's involvement in the development of the South Stand at Bloomfield Road. VB loaned her £4.5m to invest in the club. The financial situation changed very quickly over the loan with VB's daughter signing to loan back to VB's company. O's brief seems to hinting at money laundering on VB's part.
B: Where did the money come from to fund the South Stand?
VB: My private [bank] account.
Brief goes on to ask about the company that was set up by VB. The biggest shareholder was VB's Baltic International Bank. However, VB declines to name a substantial shareholder in the new company as to do so would break Latvian law.
Three rows of barristers and solicitors attended on their clients, Owen Oyston and Valeri Belokon. The entire afternoon saw the brief representing Mr Oyston question VB. He was supported by a team of advisors who were surrounded by small walls built of files containing what must add up to thousands of pages of documents relating to the dispute from both sides. Mr Belokon's assistant earned her fee as she worked tirelessly translating almost every question put to him.
Throughout the case both Owen and Karl Oyston remained impassive. Father and son sat either side of their representative, Karl on the row of seats behind and Owen on the one in front. No gestures or words passed between them.
Time and again VB claimed that he could not recall the details of agreements between the two men. The issue of a verbal agreement between Mr Oyston and Mr Belokon over the latter's claims to a 50% share of the club saw VB appear uncertain as to the details of the proposed deal.
VB struggles when it comes to the financial arrangements for funding the South Stand.
At 16:15, during counsel's questioning, the judge intervenes and brings to a close the day's work.

So not too promising from VB...

kirby knitters
Qatar World Cup bid member!

Jun 14, 2017, 9:43 AM

Posts: 18508
Location: Kirby Muxloe
Team(s): Hinckley United FC.

Post #3 of 9 (4226 views)
Re: [MrTangerineMan] Belokon v Oyston Court Case [In reply to] Can't Post or Reply Privately

Tell you what Tango Man I'm really enjoying these posts and hopefully what is coming out in open Court will force their hand to do the right thing but with the arrogance and hostility that they have shown to decent people over the years somehow I doubt it.

Man City Transfer Target!

Jun 15, 2017, 9:58 AM

Posts: 7911
Location: Northampton
Team(s): None

Post #4 of 9 (4079 views)
Re: [kirby knitters] Belokon v Oyston Court Case [In reply to] Can't Post or Reply Privately

No one seems to have mentioned that Belokon is suspected of money laundering in France, according to the BBC website.
This seems to me to be two crooks fighting over the ownership of a football club.
A pity Tango isn't able to update us anymoreSmile


kirby knitters
Qatar World Cup bid member!

Jun 15, 2017, 10:01 AM

Posts: 18508
Location: Kirby Muxloe
Team(s): Hinckley United FC.

Post #5 of 9 (4076 views)
Re: [jrev61] Belokon v Oyston Court Case [In reply to] Can't Post or Reply Privately

Why can't Tango update us anymore?

Mr. T
Chelsea Transfer Target

Jun 15, 2017, 11:55 AM

Posts: 5383

Post #6 of 9 (4056 views)
Re: [kirby knitters] Belokon v Oyston Court Case [In reply to] Can't Post or Reply Privately


kirby knitters
Qatar World Cup bid member!

Jun 15, 2017, 12:56 PM

Posts: 18508
Location: Kirby Muxloe
Team(s): Hinckley United FC.

Post #7 of 9 (4032 views)
Re: [Mr. T] Belokon v Oyston Court Case [In reply to] Can't Post or Reply Privately

In Reply To

Thats a shame. Ways around it as a member was posting from the grave a few years ago before resurrection.Sly

jon b
Chelsea Transfer Target

Jun 16, 2017, 11:54 PM

Posts: 3068
Location: Dronfield
Team(s): SUFC, SWFC etc

Post #8 of 9 (3893 views)
Re: [kirby knitters] Belokon v Oyston Court Case [In reply to] Can't Post or Reply Privately

He worked hard at getting himself sin-binned. Crazy Maybe a severe dose of the Oystons led to over cynicism.

(This post was edited by jon b on Jun 16, 2017, 11:55 PM)

Man City Transfer Target!

Jun 17, 2017, 11:11 AM

Posts: 7429
Location: Bishop's Stortford
Team(s): Bishop's Stortford & Cambridge United

Post #9 of 9 (3826 views)
Re: [kirby knitters] Belokon v Oyston Court Case [In reply to] Can't Post or Reply Privately

I always assumed he was a reincarnation of a previous poster, anyway.


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