A judge's ruling seems likely to determine the football club's future as rival bidders go head-to-head over Fratton Park
The epic trials of Portsmouth football club after the ill-fated orgy of Premier League excess will culminate in a high court case starting on Wednesday which will determine the value of the club's bare bones: Fratton Park itself. The Pompey Supporters Trust (PST), whose leaders have worked unpaid since October 2011 with 10 local, wealthier investors to save their abused old club, hope the judge will approve their offer of £3m for the ground they have attended since childhood.
Opposing the supporters' bid is Balram Chainrai, the Hong Kong‑based moneylender still fighting to recoup some of the loans he made to an overspent, sinking Pompey two insolvencies and a couple of owners ago. Into that bitter standoff in February came Keith Harris, for several yearsa high-profile banker for overseas takeovers of Premier League clubs – including Randy Lerner's of Aston Villa, Thaksin Shinawatra's of Manchester City and Carson Yeung's of Birmingham City. Seeking to scupper the supporters' bid and take over Pompey himself, Harris's bid is backed by Pascal Najadi, an investment banker living in Malaysia who owns a Swiss finance fund, and Alan Hitchins, a vet whom Harris says has made money investing on the stock market.
The Football League immediately rejected Harris's intervention, deciding it came too late, with just weeks of the season remaining, to begin examining any bid other than PST's. Portsmouth's administrator, Trevor Birch of BDO, will therefore argue in court that the PST bid is the only one the league will now consider to save the club. His case in court is that their £3m independent valuation of Fratton Park should be judged a fair offer for the battered ground; Chainrai, whose company, Portpin, has a secured charge over the ground, rejects it as too little. If Birch succeeds, Chainrai will be required to accept the £3m and the PST and partners can proceed to take over their club.
Yet Harris has not accepted the league's position and departed, to leave the PST a clear run. Instead, he, Najadi and Hitchins have returned with a new offer: no less than £6.3m, just for the ground, not even including buying the club.
The supporters and their partners are baffled as to why Harris is offering £3.3m more than the next-highest valuation for a ground that, if he buys it, is not even guaranteed to have a football club playing in it – and more broadly why he is to be found scrapping against lifelong supporters over stricken Pompey, sure to be in League Two next season.
When Birch first informed them at his London offices that Harris was fronting a competing bid, one of the PST co-investors, John Partridge, chairman of property-management company Cording, expressed immediate surprise because Harris's stockbroking firm, Seymour Pierce, was known in the City to be in serious financial difficulties. Days later, Seymour Pierce went into administration.
Iain McInnes, an electronics manufacturer leading the PST co-investors, instantly pointed Birch to the previous connections between Harris and Chainrai. In 2010, after Chainrai had taken ownership of Portsmouth from its first administration, due to the charge he held over its assets then, Harris, at Seymour Pierce, worked for him, ultimately to sell Portsmouth to the Russian banker Vladimir Antonov. Harris told the Guardian Chainrai paid him a £650,000 fee for his work on that sale.
Portsmouth collapsed into administration again in 2011 after Antonov was charged by the Lithuanian prosecutor-general with massive bank fraud, which he denies. Chainrai spent months seeking to take the club back again, and representing him was Suzie MacCagnan, who was previously an executive at Seymour Pierce, and worked with Harris on Chainrai's sale of Portsmouth to Antonov.
"Immediately we were told about the Keith Harris bid, I pointed to those previous connections with Portpin and we refused to have anything to do with it," McInnes says. "We are determined to return the club to people who care about it, and the local community."
Harris and Najadi insist that despite that history of Harris previously working for Portpin, their bid is completely independent of Chainrai. Harris says he considers £6.3m – which would be paid only to Portpin if the charge is maintained on the ground; it could be subject to a challenge by Birch – is a fair market value for Fratton Park.
Harris told the Guardian that after a "closing dinner" in 2011 with Chainrai and the other Portpin partner, the Israeli Levi Kushnir, to celebrate selling Portsmouth to Antonov for a planned £17m, he had no subsequent dealings with them.
"I don't recall having another conversation with them after that, and my bid is absolutely nothing to do with them," Harris says.
That sale to Antonov was just the latest in the series of football club sales Harris brokered while at Seymour Pierce. Discussing his career, as Harris did openly and at length with the Guardian in a patisserie close to his Belgravia house, it is clear he found himself well placed to profit after the 1990s when money flooded into football.
"I always say: football did not embrace commerce in a carefully orchestrated strategy," Harris says. "Commerce invaded football."
He began at HSBC working on the refinancing of Rupert Murdoch's BSkyB, whose recovery was based on securing live televised football exclusively. Harris moved on to represent football clubs floating on the stock market, then in 1998-99 advised Manchester United on the club's proposed takeover by BSkyB, which was ultimately blocked by the Competition Commission after a vehement protest by United fans.
He left HSBC for Seymour Pierce in 2000, and was also appointed chairman of the Football League. He left in the post-ITV Digital furore and by then, he says, he "knew everyone in football".
Seymour Pierce was Chelsea's broker on their 1996 float, and was their formal advisers when Roman Abramovich bought the club in 2003.
Harris became a key figure in the flow of takeovers which followed, but looking back now, his deals have had decidedly variable outcomes.
Lerner's 2006 purchase of Villa, although the club have stalled more recently, stands out as the most successful. Harris says that Seymour Pierce was paid an £800,000 fee for the £62m deal, in which it acted as Lerner's advisers.
Harris then acted for the Icelandic buyer of West Ham, Bjorgolfur Gudmundsson, for which, he says, Seymour Pierce was also paid £800,000. Gudmundsson's fortunes dissolved with the Icelandic banking meltdown, and West Ham fell into a form of receivership until David Sullivan and David Gold bought the club in 2010.
They had sold Birmingham City to Yeung, now fighting money-laundering charges in Hong Kong. He was represented by Harris for the first purchase of Birmingham shares; Harris had publicly to sue Yeung for his £2.2m fee, and says that it is the only deal he now regrets.
He does not regret introducing Shinawatra, the disgraced former prime minister of Thailand – whose human rights record has been heavily criticised and had been charged with corruption offences – to buy Manchester City for £21.6m in 2007. Harris says he was paid a £2m fee for the Shinawatra deal. He is comfortable with it, he says, because City are in good ownership now, Shinawatra having sold to Sheikh Mansour after one chaotic year.
Russell Bartlett, who bought Hull City shortly before their Premier League promotion in 2008, was another Harris deal; Bartlett partly paid for it by loaning money from the club itself to his own holding company, and has since sold up.
Harris also acted for Laurence Bassini, who bought Watford in 2011. Harris says he did background checks on Bassini and found his brother had significant money and there was a family trust, but Bassini himself had been bankrupt as recently as 2008. After a very difficult year financially for Watford, Bassini finally sold to the Italian Pozzo family. Last month a Football League disciplinary commission banned Bassini from involvement in football for three years, finding him guilty of misconduct in financial dealings at Watford. Before the commission took place, Harris recently introduced Bassini as a potential buyer for both Birmingham and Portsmouth.
Most recently, Harris acted for the estate of Nigel Doughty to sell Nottingham Forest to the al-Hasawi family from Kuwait. His fee, he says, was £600,000.
Now, with Najadi and Hitchins, Harris is challenging the supporters trust, seeking to take over Portsmouth and work full time at the club himself as the chairman. Seymour Pierce – the deals having dwindled after the financial crash – fell into administration in February and was taken over by another firm, Cantor Fitzgerald.
Harris did not move with his former colleagues. He says in the good years he was paid well in dividends and bonuses, but in the last four years he received only his salary, first £200,000, then £165,000. Now, with Seymour Pierce's demise, that has gone.
He says of his motives for the Portsmouth bid: "After 36 years in banking I was looking for a lifestyle change. I think I can run a football club pretty well, and Portsmouth is a very good prospect.
"There is the potential upside, with this supporter base, some investment from us and decent management, of competing for promotion to the Premier League. I'm not in it just to make money, but I'm not doing it to lose money."
The trust has raised £1.4m from ordinary supporters, for whom £1,000 bought a single share – many have clubbed together to buy one.
The wealthier investors, a mix of supporters with successful local businesses and Ken Terry, Chris Moth and John Kirk, who manage large investment funds in the City, have paid in £1.6m of their own money.
A loan from Portsmouth city council, and from Stuart Robinson, a property developer who now owns land neighbouring Fratton Park, will enable the PST bid to buy the ground. The loans, and some of the club's other inherited football debts, will then be repaid from the remaining Premier League parachute payment, which is due to increase to £9m.
The PST and partners believe with the loyalty of supporters and some further investment, including £900,000 of further pledges for the trust to convert, they can begin to rebuild Pompey as a community club. The investors have agreed to aim for 51% ownership by the trust, which is run democratically and will elect three directors. Macinnes is proposed as the club chairman, and the investors have the option to appoint two more directors.
"We are working very well together and we believe we are the right bid, by people who love the football club," says Ashley Brown, PST's chairman. "After what Pompey have been through, football needs to change, come back to supporters. We hope the court case goes our way and we can take our club over. Then prove that supporter ownership can work, in partnership with investors involved for the right reasons."