Irish seek support for action over United dealings
Wednesday 28 January 2004
John Magnier and JP McManus are moving closer to effective control of Manchester United by shoring up support among other shareholders to ensure crucial votes go their way. Insiders are increasingly confident that the pair will be able to emerge victorious from any vote at an Emergency General Meeting. If that transpired, they would effectively have the power to sack Sir Alex Ferguson or overthrow the board.
The United board hoped that Monday's promise of an internal review of recent transfers would be enough to placate the Irish racing tycoons, who had demanded that their concerns over Ferguson and the running of the club be taken seriously. The pair oppose any long extension to the contract of Ferguson, who is embroiled in a bitter legal dispute with Magnier over the stud rights to the racehorse, Rock of Gibraltar.
But a source close to Magnier said yesterday United had failed to address the pair's concerns outlined in a letter sent to the board earlier this month and that the internal review had changed nothing.
"The statement didn't address the serious issues raised in the letter about corporate governance which has been with the board for two weeks now," the source said. "It did nothing to alleviate the legitimate concerns of shareholders." The letter included 63 questions relating to corporate governance, compliance with regulatory guidelines, the conduct of player transfers and fees paid to transfer agents.
Magnier is likely to wait until the internal review, which is sure to lack the detail he demands, to call an EGM. He will call one earlier, however, if Ferguson is given anything more than a one-year rolling extension to his current contract. A rolling extension is expected to be announced this week.
The tycoons are confident they would enter any EGM in a position of strength. Their confidence stems from a belief that they can call upon some 35 per cent of voting rights, and possibly more, to side with them. With an EGM voting turn-out unlikely to top 75 per cent, they believe a majority is attainable, even before intense lobbying.
The pair own just over a quarter of United through their offshore investment vehicle, Cubic Expression. One ally is their fellow Irishman Dermot Desmond, the owner of Celtic who holds around 1.5 per cent of United. They are seeking others among a diverse range of shareholders that includes another acquaintance, the mining entrepreneur Harry Dobson, who owns 6.8 per cent.
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