British sports and entertainment company ENIC will still pursue legal action against the Czechs it says illegally ejected it from management of Slavia Prague — this country’s most famous Czech football club — even though it has finally closed the chapter on its ownership battle over it.
“We said in the statement [about the settling of the ownership issue] how disappointed we were about the events at Slavia, and the legal proceedings involving those people who ejected us from the club will continue,” ENIC director Matthew Collecott told Czech Position. “This is a legal matter and I do not want to say anything more about it.”
His comments followed a statement earlier this week by Natland Group, the Czech investment and development company, announcing the end of a bitter ownership battle over control of Slavia Prague and the creation of a new company tasked with returning the club to its glory days.
“We sold out our entire stake, which amounted to almost the whole club,” Collecott said. He declined to say the sale price but confirmed that an overdue debt of Kč 110 million dating from its previous investments had been settled.
Confusion over share stake
‘There is only one correct version of the ownership and that is ours.’ ENIC, which also owns English Premier League high fliers Tottenham Hotspur, maintains that it owned 99 percent of Slavia before the deal announced this week. But Natland Group, the new majority owner, said it already had a 50.8 percent stake in Slavia, with billionaire Czech and former Transport Minister Aleš Řebíček owning 33 percent and the remaining 16 percent in the hands of ENIC. “There is only one correct version of the ownership and that is ours,” Collecott said when asked about the disparity.
No details of the share stakes or price paid by Natland and Řebíček to close the ownership battle were given in the statement announcing the deal. Natland says it will have a 70 percent stake and Řebíček 30 percent in Viscontia, the newly created company that will own Slavia.
Collecott declined to identify the targets of its ongoing court action aimed at punishing the individuals it blames for undertaking a coup at Slavia Prague, which ejected it from management of the club. To do that, it will have to get to the bottom of an extremely murky and complicated scam.
At one stage earlier this year, Slavia’s management put forward a former chauffeur living in a modest flat as the club’s owner. The opaque ownership, unpaid debts and players wages, and threat that the Football Association of the Czech Republic (ČMFS) would relegate the club to the third division, prompted a pitch invasion by fans in early May.
Illegal capital increase
ENIC says it was fraudulently squeezed out of Slavia in 2008. A general club meeting in January 2008 agreed on a Kč 618 million increase in the registered capital to Kč 1.04 billion, carried out by the company Key Investments, which became the controlling shareholder with ENIC allegedly prevented from taking part in the decisive general meeting.
The controversial brokerage, which has since lost its trading license, is currently facing a police investigation for failing to return investors’ money. Investors include a series of Prague district councils that placed hundreds of millions of crowns with the company as well as councils in other parts of the country. ‘We would like to help. We are involved in European football and would react positively if we were called to help.’
Amazing as it might seem, the cash for the capital increase was based on the maximum insurance that might accrue from the life insurance of the Slavia football players with the use of this so-called nonmonetary benefit agreed to by a Czech judge. In essence, that judge gave the go ahead for a theoretical sum, which might be regarded as virtual money, to underwrite a real life capital increase and ownership coup.
Despite the Slavia episode, which severely soured ENIC’s view of the Czech business environment and encouraged it to quit the club, Collecott says it is willing to help the new owners get Slavia back to winning ways on the pitch. “We would like to help. We are involved in European football and would react positively if we were called to help,” he said.