HEARTS received a stay of execution from the Scottish Premier League yesterday and remain a top-flight team. League officials decided that the club’s parent company, Ukio Bankas Investment Group, being named on a list of insolvent companies in Lithuania last Thursday did not breach SPL rules on insolvency. Consequently, the Edinburgh club avoided a points deduction which would have relegated them to the First Division.
The SPL are certain to act if and when UBIG are formally declared bankrupt by a Lithuanian court. That could mean a 15-point deduction for Hearts by the start of season 2013/14. For now, all concerned must await UBIG’s next move. The group controlled by Vladimir Romanov – and which holds a 79 per cent stake in Hearts – told the Lithuanian Economy Ministry that they are insolvent last Thursday, prompting concerns for the future at Tynecastle. The SPL had to decide if that constituted an insolvency event and if an immediate points penalty should be applied. Their conclusion for the moment is ‘no’ on both counts.
If that brought huge sighs of relief along Gorgie Road yesterday afternoon, the reprieve is tempered by the fact the matter is not over. Any punishment Hearts now suffer will be less severe than relegation unless new information comes to light. First, UBIG must submit a formal application for insolvency to Lithuanian courts within 30 days of Thursday’s announcement. During that period, they can withdraw the application at any stage and return to normal trading. The SPL, therefore, could not deduct points from Hearts now for an event which has not yet happened – and theoretically may never happen. Doing so would leave the league body open to serious legal action.
An SPL statement released last night read: “The SPL Board met today to consider reports from Lithuania in respect of Ukio Banko Investicine Grupe (UBIG). The Board are not satisfied, on the basis of information currently available to it, that an Insolvency Event (as defined by SPL Rules) occurred in respect of UBIG during Season 2012-2013.”
Expanding on the verdict, the SPL chairman Ralph Topping said: “We acted on the information that was available to us. That’s not to say that other information will not come forward in the next few days or weeks ahead, but we can only deal with what we have got at the moment and on that basis there is no insolvency event under our rules. We will need to see what develops on this situation, if indeed anything develops. You can appreciate the issues that are involved. We are dealing with Lithuania, we are dealing with Lithuanian law, we are dealing with interpretation of what’s happened over there, and looking at it from the perspective of our rules. It’s good news at the moment. With everything in Scottish football, there is temporary respite.”
Prior to yesterday’s SPL board meeting, the St Mirren chairman Stewart Gilmour offered a supportive view of Hearts’ predicament. “How do I see it at the moment? They’re not in administration,” he said, “but I don’t know enough about it to make an absolute decision.
“Scottish football needs strong football clubs and Hearts are a big football club and a traditional football club and we need clubs like that. It is always commercially damaging. Football, like every industry, is going through a very hard time just now. The commercial economy of the country is not good just now and football is no different to many other businesses.”
Realistically, it would seem just a matter of time before UBIG are officially insolvent and the SPL call Hearts to order under new rules put in place last summer following Rangers’ collapse. The ideal option for the Tynecastle club would be a change of ownership before that happens. Several parties are monitoring the situation but time is against them given the 30-day window explained above and the fact Romanov’s assets remain frozen.
Angelo Massone is one potential investor lurking in the wings as he prepares another attempt to gain control. The Evening News revealed in January that the Italian was preparing a second bid for the Edinburgh club after his initial offer of £4.5million was rejected in November. Hearts are not keen to deal with Massone due to his antics at Livingston in 2009, which left the West Lothian club on the brink of extinction. However, he sees an opportunity to seize Romanov’s shareholding and is likely to make another move if and when UBIG enter administration.
Other interested parties include an unnamed American consortium and the Edinburgh MP Ian Murray, who represents the six key Hearts fans’ groups – Federation of Hearts Supporters’ Clubs, Foundation of Hearts, Heart of Midlothian Shareholders’ Association, Heart of Midlothian Supporters’ Trust, Hearts Youth Development Committee and Save our Hearts.
Further developments on the matter could yet stem from Tayside, where Dundee are considering whether to challenge yesterday’s SPL verdict on Hearts. Scot Gardiner, chief executive at Dens Park, said his club is preparing to play First Division football next season after finishing bottom of this year’s top flight. Privately, though, there are questions being asked over whether the SPL should have punished Hearts for suffering an insolvency event during the season just ended.
The Scottish Football Association will not intervene on this issue, but their chief executive Stewart Regan lamented more monetary problems within the game. “It is damaging because Hearts are a big club,” he said. “It’s another example where finance is getting in the way of the game making progress. And, again, the people you feel sorry for are the fans at the end of the line who are desperate just to watch their team and watch good football.”