Exclusive: European Commission seek explanation on Celtic land deals
- 08 January 2014
Celtic representatives have been in Brussels as part of a preliminary investigation by the European Commission into land deals between Celtic and Glasgow City Council. The probe relates to question marks over the purchase of various plots of land, including their Lennoxtown training complex, which it has been alleged constitute State Aid.
In recent months, the European Commission Directorate General for Competition State Aid has announced several formal investigations into allegations of State Aid involving Spanish and Dutch clubs - including Barcelona, Real Madrid and PSV Eindhoven. The latest club to become embroiled in an investigation, over an arrangement with their local council regarding the Liberty Stadium, is Swansea City.
The situation with Celtic is not yet at the same stage as the Spanish and Dutch investigations, but preliminary meetings have been held and information has been requested by the European Commission. When contacted by the Rangers Standard, an EC spokesperson said:
"We have indeed received complaints about alleged aid in land deals between Glasgow and Celtic and we have requested and received detailed information from the UK authorities, lastly in December 2013."
"There is no legal deadline to conclude a State aid investigation; the duration depends on a number of factors, including the complexity of the case".
It is understood that both Celtic and Glasgow City Council are extremely concerned at the possibility of the preliminary investigation leading to the type of full investigation which has been initiated in respect of Spanish and Dutch clubs.
Celtic have purchased several plots of land from State organisations, which have historically been Labour controlled, at low prices. These include the purchase for only, £497,000, of the land their Lennoxtown training ground was built on. It is believed that the recent sale of London Road Primary School may also now fall under examination.
If you are interested in more forensic detail on the various purchases and valuations then you should visit the excellent http://footballtaxhavens.wordpress.com/2014/01/01/state-aid-assembling-the-case-for-the-eu/
The European Commission has wide ranging powers if there is found to have been a breach of the regulations. The Commission can require the Member State to recover the aid with interest from the beneficiary (in this case Celtic). This could lead to a potential bill of over £30m for Celtic, which would have to be repaid over a maximum period of ten years. Any finding of guilt would put pressure on the SFA to probe any sporting advantage that discounted deals brought. It may also fall foul of new UEFA Financial Fair Play regulations.
This news comes only a day after the announcement that the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are to examine the conduct of Co-Op Bank officials over allegations of tie ins with the Labour Party.
Celtic, who can count former Labour Minister, John Reid and former Labour MP, Brian Wilson amongst their former and current directors, were the recipients of extremely favourable loan deals from the Co-Op Bank and those are almost certain to be examined as part of the investigation. It is believed that the State-owned land obtained by Celtic was used as security for these loans.
The European Commission probe is separate to this however and Celtic will potentially have to fight on two fronts to show that they have not been the beneficiaries of either State Aid or politically motivated, favourable loans secured against the land purchased. Last year Celtic employed a lawyer with litigation experience as their Company Secretary.