Carlisle United’s owners have signed a document which allows a situation in which a director may have a “conflict of interest” with the Blues.
A new CUFC Holdings filing at Companies House shows a document signed by co-owners Andrew Jenkins, Steven Pattison, John Nixon and CUOSC’s Billy Atkinson.
It approves a resolution which states: “That the directors of the company may authorise pursuant to section 175 (5) of the Companies Act 2006 a situation in which a director has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company.”
The ordinary resolution was circulated on October 16 last year, and signed on November 26.
It was shortly after that time that United’s Holdings board formally announced the end of takeover talks with parties linked to Philip Day / Edinburgh Woollen Mill.
Another CUFC Holdings director is John Jackson – who is also a director of Purepay Retail Limited, the company United owe £2.4m after the “novation” of debt to EWM, which went into administration last year.
Jackson is not named on the document, and nor is another CUFC Holdings director, Lord Clark of Windermere.
It seems possible that the resolution may relate to Jackson’s role both at United and with the company the club owes a seven-figure amount – but the Blues have not confirmed this.
They did not issue a comment in response to the News & Star’s invitation.
The matter may, though, be addressed in the latest Carlisle United Supporters’ Groups (CUSG) meeting taking place tonight, minutes of which are likely to appear later in the week.
Section 175 of the Companies Act 2006 (see below), regarding conflicts of interest, relates to "in particular the exploitation of any property, information or opportunity" but "does not apply to a conflict of interest arising in relation to a transaction or arrangement with the company".
It was in early December that United’s owners announced that long-standing takeover discussions had ended.
It followed closer financial links with EWM which began in 2017 with a loan facility in 2017, and involved associates of Day, such as Jackson, David Holdsworth and Kevin Dobinson, becoming involved with the club.
Blues chiefs, in December's statement, said potential takeovers in 2019 and a subsequent deal earlier this year had not been completed.
Supporters' trust CUOSC said the initial 2019 deal had faltered because of EFL's requirements of EWM, while a revised 2021 deal was knocked back by CUOSC because they said it would not have led to immediate change of control at the top of United.
United's owners said that negotiations would take place over the repayment of the £2.4m debt, and that potential new investors were now being sought.
Co-owner Nixon also said last summer that the club had “Plan B and C” if necessary when it came to “succession” talks, but no further detail on those has so far been announced.
CUOSC have said a number of interested parties are known, but told members in their latest briefing that they have had “no formal discussions at this stage” with any new individuals or groups keen to take over the club.
The News & Star has also invited CUOSC to comment on the Companies House filing.
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Companies Act 2006 Section 175 - Duty to avoid conflicts of interest reads as follows:
(1) A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company.
(2) This applies in particular to the exploitation of any property, information or opportunity (and it is immaterial whether the company could take advantage of the property, information or opportunity).
(3) This duty does not apply to a conflict of interest arising in relation to a transaction or arrangement with the company.
(4) This duty is not infringed—
(a) if the situation cannot reasonably be regarded as likely to give rise to a conflict of interest; or
(b) if the matter has been authorised by the directors.
(5) Authorisation may be given by the directors—
(a) where the company is a private company and nothing in the company's constitution invalidates such authorisation, by the matter being proposed to and authorised by the directors; or
(b) where the company is a public company and its constitution includes provision enabling the directors to authorise the matter, by the matter being proposed to and authorised by them in accordance with the constitution.
(6) The authorisation is effective only if—
(a) any requirement as to the quorum at the meeting at which the matter is considered is met without counting the director in question or any other interested director, and
(b) the matter was agreed to without their voting or would have been agreed to if their votes had not been counted.
(7) Any reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties.
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