Dick Knight betting scam on front page of Argus...........

[London Irish]

It's a personal embarrassment for Knight - but this story will have zero impact for us and the club.

This guy invested in the club and DK returned the favour by lending some sporting legitimacy to his business. That trust has clearly been utterly betrayed.

The only thing this episode will prove I reckon is how difficult it is to attract investors in the club that Dick Knight can trust.

Dick has done a great job rebuffing the advances into the club of some unwelcome characters, this one alas slipped through the net.

 

[London Irish]

The Argus report suggests that things were going tits up before Knight resigned. The company reported a £1 million loss in August 2003. Comments above suggest that Knight resigned a year after this.

Such losses for start-up dotcoms are utterly routine and would not necessarily have provoked alarm bells.

 

[The Large One]

Knight says in The Argus that he was there as a figurehead, to advise and to help get the company kick-started. If so, I'm wondering why he was still a non-exec almost 4 years later.

I read that the company was started in 2002 - that's only two years ago.

 

[Nwanko]

K Griffiths

Before we start building the gallows...

KG invested money in the Albion when the club really needed it, knowing him personally and his commercial background I'd be surprised if he was knowingly involved in anything illegal. He certainly isn't what you might call a 'dodgy geezer'.

I appreciate that the facts as reported look grim and there will be plenty of people wondering wtf has happened to their money, but I wouldn't be surprised if there is more to the story than has been reported so far. I hope there is anyway...

 

[Pavilionaire]

Companies House website says Sporting Options plc was incorporated 22nd November 2000, registered office Brighton, gambling activities. The company is 4 years old this week and is still trading, according to the website.

I accept that such companies usually incur start-up losses, but this is a £3.5 million black hole in the accounts we are talking about, all client monies.

Knight has some explaining to do, as it looks from where I'm standing he invited a crook to be an Albion director and was then involved with a dodgy company for the best part of 4 years.

 

[aftershavedave]

Originally posted by Pavilionaire I accept that such companies usually incur start-up losses, but this is a £3.5 million black hole in the accounts we are talking about, all client monies.

i'm not too sure how the trust accounting rules apply here, but tend to agree with your conclusions, to a degree at least, whereby there are some serious questions to answer.

btw non-exec chairmen don't "lend a hand": companies law doesn't discriminate between a paid favour and an unpaid one. dismissing this as nothing important at all (as london irish does) is in my opinion a little frivolous..

 

[n1 gull]

The only reason for being a non-exec director is to lend your name to the company, so other investors etc feel confident about your product/company, therefore if the company that is paying you money for using your name goes to the wall, so does your name. If it goes to the wall because of dodgy dealings it could really hurt your name and the other companies you're connected with.
I don't think this looks too clever for anyone connected to Sporting Options.

 

[Pavilionaire]

It worries me that the Albion chairman and a former director, handpicked by the chairman, are associated with a venture that has millions of pounds of client monies unaccounted for.

At the same time Albion fans are being asked to donate monies to the club with no strings attached, and yet we cannot afford to offer our club captain or manager long-term contracts.

It would be a terrible mistake for Knight to make light of this situation. I would hope the club will issue a full and frank statement on its website, setting the record straight and coming clean.

The fact is that Sporting Options plc is a public company in administration with huge losses but a website that is currently shut down, run by Albion board members past and present.

Any honest investor contemplating putting money into the club post-Falmer decision would expect this matter to be cleared up. I wouldn't put a penny into this club until I knew exactly what the hell went wrong at Sporting Options.

 

[caz99]

i'm not too sure how the trust accounting rules apply here, but tend to agree with your conclusions, to a degree at least, whereby there are some serious questions to answer.

btw non-exec chairmen don't "lend a hand": companies law doesn't discriminate between a paid favour and an unpaid one. dismissing this as nothing important at all (as london irish does) is in my opinion a little frivolous..

i have to agree with your last statement. i dont think we should all just sit and dismiss it as nothing.

 

[Ernest]

The point is that £3.5 million of punters money that was supposedly safeguarded has gone missing , now that is up to the relevant authorities to discover IF any wrong doing has been done and secondly who has done it and if they find any evidence of such behaviour then it will be up to them to deal with it as the law requires.
No point now speculating as who is to blame and who is not guilty and in the fullness of time if anyone is found guilty of anything and if it includes Dick Knight then that is something to be dealt with then.

 

[Pavilionaire]

Fair enough Ernest, innocent until proven guilty and all that, but the club MUST issue a full and frank statement, otherwise outsiders will think we're a club of spivs and we won't get the money for Falmer even if we get the YES vote.

 

[Icy Gull]

However this is dressed up......it doesn't do DK or the Albion any favours. It needs an official statement quickly or the rumours will escalate, as to use an old cliche, nothing travels faster than bad news.

 

[The Large One]

The fact is that Sporting Options plc is a public company in administration with huge losses but a website that is currently shut down, run by Albion board members past and present.

Not quite true - there are no Albion board members on the board of Sporting Options.

 

[Lord Bracknell]

This was posted yesterday on the Ask the Club forum:-

Dick has today issued the following statement to clarify the situation regarding his former connection with Sporting Options Plc.

"I was invited by Albion director Kevin Griffiths to be the Non Executive Chairman of a new venture called Sporting Options when it was established in 2002. My role was advisory, to act as a figure head and to advise on the launch of the new company. I took no part in the running of the company and never expected or received any payment for my role. I had no involvement in the company and have since resigned as Non Executive Chairman.

"Kevin Griffiths has resigned as a director of the Football Club. The club itself has never had any connection with Sporting Options."

 

[Ernest]

Daily business was 'artificially created'

by Graham Green


THE full horror story of the £3.6 million collapse of Sporting Options was revealed on Tuesday when it was claimed as much as 70 per cent of its daily business was artificially created at the request of directors.

The revelation came on the day that administrators for the stricken betting exchange confirmed that instead of the anticipated £3.6 million in clients’ money, the amount discovered amounted to less than £100,000.

It also emerged that in June last year the directors of Sporting Options had a firm offer from a group of Indonesian investors willing to buy the business for £10 million, only for talks to falter.

On a day when punters’ worst fears were confirmed that Sporting Options had folded, there was immediate solace for most in a rescue package offered by Betfair and approved by administrators.

Under the deal, put together with alacrity overnight, 95 per cent of the Sporting Options clients could be compensated in full within the next few days.

The speed of Betfair’s intervention - and the willingness of rivals Betdaq to mount a similar rescue operation - emphasised their determination to restore confidence in the betting exchange industry that threatened to be badly shaken with the discovery of a black hole in Sporting Options’s accounts.

There have been suspicions that the markets on Sporting Options were heavily ‘seeded’ - articificially created to give the appearance of strong liquidity - and it now appears punters’ betting accounts were being used for this purpose.

One source with a close understanding of Sporting Options’ business told the Racing Post on Tuesday night: “Not less than 70 per cent of business was seeded trades, put up on the website by staff to make it look as ifthere was good liquidity.

“It was up to 90 per cent in the evenings when the following day’s racing markets were being seeded.”

Although there has been no police involvement so far, they could be called in as Menzies Corporate Restructing,administrators of Sporting Options PLC, delve deeper into the disappearance of the money.

Joint administrator, Paul Clark, told the Racing Post: “We have 5,500 clients/creditors. They are owed a total of some £3.6 million. There are about 500 of them that are owed more than £1,000 so there are 5,000 or so owed £1,000 or less.

“Under the rescue package, which was negotiated by us, Betfair is going to pay everyone owed up to £1,000 in full, subject to them adhering to their conditions, and anybody owed more than £1,000 will get £1,000 or 20 per cent of their balance, which ever is the greater, with the rest being paid in rebates over a period.

“The amount of money in the client bank account is less than £100,000. If you do the simple maths, the company’s statement, website and other documentation suggests there should be £3.6 million, but it is less than £100,000.”

It is understood that the 20 staff at Sporting Options were unaware of the claim that ring-fenced funds were being used.

Clark added: “What we wanted to do was to get what we regarded was the best deal for the creditors, which with the Betfair deal we think we have achieved, and the second stage now is to get that information out to those creditors at the earliest possible opportunity.”

Neither Sporting Options founder Kevin Griffiths, nor director of communications Paul Cooper, were issuing any comment on Tuesday, while shareholder Tony Bloom admitted having heard nothing from the company to explain its collapse.

“I am afraid I am as much in the dark as you are, but I would imagine this leaves me high and dry as an investor,” said Bloom.

Betfair’s chief executive, Stephen Hill said: “Our rescue package reflects a commitment to the betting exchange punter and to the nascent betting exchange industry.

“The demise of Sporting Options shows why we urgently need the new Gambling Bill, not only to regulate online bookmakers, but also to update regulation for the wider betting industry so that all punters are properly protected.”

Hill pointed out that customer funds at Betfair are held in trust in a separate ring-fenced account which is audited by KPMG.

“Protecting customers funds should be a condition of a bookmaker’s licence and further, the new Gambling Commission should have the power to conduct spot-check audits of online and bricks and mortar bookmakers to ensure that this is the case,” he said

 

[Lord Bracknell]

Not quite true - there are no Albion board members on the board of Sporting Options.

The problem is, though, that up to about three months ago there were two Albion board members on the board of Sporting Options. And up until very recently there was one.

 

[aftershavedave]

doesn't look at all good does it! just what we don't need right now.

i'm afraid that dk's rather dismissive statement is as frivolous as london irish's....and in law it's of no help.

they've got a good insolvency man there btw, paul clark is a good man (for what that helps!)

 

[Lord Bracknell]

What we seem to have here is a company that was artificially trying to boost its value in order for it to be sold at a huge profit. But talks with potential purchasers floundered.

 

[SussexHoop]

What we seem to have here is a company that was artificially trying to boost its value in order for it to be sold at a huge profit. But talks with potential purchasers floundered.

But the issue is how they were doing it. It is being suggested they were using clients money, which was supposed to be ring fenced, to make the site seem busier and more popular than it actually was. In doing so, it looks as though they've lost their client's money, which they weren't supposed to touch to start with.

A company, Sporting Options (Clients) Limited, was dissolved in March 2004. IF this was where the clients' funds were ringfenced, someone has to answer for the whereabouts of the clients' funds in the last 6 months.

If the NIMBYs try to use this in their battle against Falmer, imho it shows how weak their initial objections are.

 

[Lord Bracknell]

If the NIMBYs try to use this in their battle against Falmer, imho it shows how weak their initial objections are.

I don't think there is much ammunition here for the NIMBYs. They are focussing on the Public Inquiry - which will deal with planning issues. This isn't a planning consideration.

My concern is that the Albion need to maintain political support for a new stadium. And that they need to put a finance package together to fund it.

DK needs to persuade the people that matter in these areas that they should continue backing the Club. He may now need to work a bit harder to achieve that.