Why is Usmanov’s Red & White Holding buying up all these shares now? The answers

Many people have been asking this question and also will he take over at when he gets to 30% share holding in Arsenal. Well below should hopefully answer whys he’s buying and what 30% means to Arsenal now.

• ·         Premier League rules regard someone with 30% or more of the voting shares of a club as in control.
• ·        So if you have 30% you are deemed to be in control, and if you are in control then you are deemed to be acting as a Director, even if you’re not actually on the Board.
• ·         So Premier League rules state the responsibilities of Directors are reporting all “material transactions” to the Premier League (a material transaction is one of £25,000 or more) in respect of pretty much anything including agents fees “third party payments” (bills and such),  players wages.

So if,

·         Usmanov gets to 30% he is treated by the Premier League as a de facto Director and Directors have a duty to sign off reports to the Premier League as correct these  reports include most transactions over £25,000.

So how is a Usmanov supposed to sign off the books if he doesn’t have full access to the them? This will be the argument that Usmanov will be use!.

§  If he is allowed access, he will get all the details of who is paid what, where all the income comes from and where the expenditure goes.

§  This knowledge will allow him to judge whether the business is being run well much better than by reading the published accounts that are available to anyone. There is a wealth of detail that can be hidden in ‘overall wages’ and ‘miscellaneous expenses’.

What else does a 30% shareholding mean?

§  Nothing anymore at Arsenal. When there are a group of small shareholders with no single person in majority control, 30% is the magic figure at which a shareholder has to make a bid for all other shares in a company.

§  This is designed to stop shareholders avoiding responsibility. It stops them building a big stake in a company without taking on any of the duties of ownership.

§  Remember that Kroenke bought enough shares to take him to just below the 30% threshold, then stuck on that level until it suited him and the rest of the Board to make his move. At that point he agreed a price with Danny Fiszman and the other Board members, and was obliged to make an offer for all the other shares.

§  Now that that there is a majority shareholder, there is no rule that says Usmanov getting to 30% obliges him to do anything. He does not have to make an offer to Kroenke if and when he reaches 30%, and this is not his reason for wanting to get there.

§  30% doesn’t entitle Usmanov to a seat on the Board. The Board is voted for by the shareholders and votes require a majority, 50% plus one share. As Kroenke has about 67% his vote wins. So Usmanov would not join the Board.

When can Usmanov make an offer for the club?

§  Anytime he wants to today, tomorrow whenever.

@thearsenal49ers & @AngryOfN5