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Financial Integrity, Football

Did Celtic directors mislead Shareholders and Stock Exchange in 2001 to repay Co-op Bank debt?

June 2001


On 29th June 2001, Celtic PLC issued the offer above to raise £25 million by the issuing of up to 20 million New Convertible Preferred Ordinary Shares. The purposes of the offer being listed in the last paragraph above. On the 31st July 2001 it was announced that the offer only raised £22.5 million: 

Result of offer


Note: At this time Celtic PLC was listed on the main London Stock Exchange not the Alternative Investment Market (AIM) where they are listed now. The listing and disclosure requirements on the LSE are much stricter than the AIM.

What did Celtic do with the majority of the money raised? Well Celtic paid off a £15 million loan to the Co-op Bank. How do we know? Ewing Grahame’s article in The Herald in January 2002 says so

The Herald can reveal that much of the £22.5m raised by last summer’s share flotation was used to repay a bank loan. The manager has spent a net £5.15m on new signings this season when the flotation, the third in six years, was sold to the public on the grounds that they would be providing transfer funds for O’Neill and helping to build a badly-needed new training complex to replace the antiquated facilities at Barrowfield. Some £15m of the money raised was apparently used to repay a loan from the Co-operative Bank and, although a further £4.5m was subsequently borrowed, it has been swallowed up elsewhere.


Before the offer, on the 30th June 2001, Ian McLeod, then Celtic CEO told Roddy Forsyth in The Telegraph:

“A substantial proportion of the sum raised will be made available to Martin O’Neill to strengthen the side because we know that success on the playing field will add to the strength of our brand image.” 


From Ewing Grahame’s article only £5.15m of the £22.5m was spent on players.

Listed companies, even on the lesser AIM never mind the main board, have a duty to disclose information and keep the market fully informed – yet no information was issued to the market on the change of purposes of the offer. Companies are not allowed to issue offers and then change the purpose of the offer – that’s misleading conduct. Circumstances change but the Celtic board should have informed their shareholders and the market but they didn’t except to hide the fact in their next interim results.

Was Celtic pulled up for this indiscretion – doesn’t look like it – no shareholders complainedno fine issued.

In 2005, another share offer was issued by Celtic, again to create training facilities but it looks in this case the £15 million did go to the rightful declared purpose this time. http://news.bbc.co.uk/sport2/hi/football/teams/c/celtic/4386814.stm

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