As The Lennoxtown Initiative charity incorporation documents show it had no share capital and was Limited by Guarantee. The guarantee is covered by the Members (not shareholders since there are no shares). And as we know the main Members were the 3 public authorities (from the memorandum of association):
However the Guarantee is limited to an amount not exceeding £1 (from the memorandum of association):
So why as reported in the Sunday Post 3rd May 2015 did East Dunbartonshire Council (EDC) step up and pay The Lennoxtown Initiative charity’s debt and obligation under the Celtic Service Level Agreement (SLA) of £68,377.20 when it didn’t need to?
Question: Why is EDC paying when it answered a FOI asking if it had a copy of the Celtic Service Level Agreement by saying that words to the effect that:
The Lennoxtown Initiative was a separate company and the SLA agreement was between the charity and Celtic & that EDC was a separate legal entity. And that EDC did not have and had never seen a copy of the Celtic SLA.
So why, when the EDC was under no legal obligation to pickup the charity’s debt, it did so and paid it out of ratepayers funds. Not only that but they paid the final bill on some ‘agreement’ they claim they never saw or had a copy of. Unless it now does have the Celtic SLA ‘agreement’ and therefore it can be FoI’d to obtain it this time since it subsumed it’s obligations.
Question: Why does the EDC pay the final bill for The Lennoxtown Initiative charity’s SLA with Celtic in 2013 when it did nothing when the 3 operational staff of the charity had to be sacked because the charity was in debt in February 2011? As reported in the Kirkintilloch Herald, 2nd February 2011:
So the EDC will fund £68,377.20 of an agreement it has never seen, for a charity it had no legal obligation to beyond it’s guarantee of £1. While doing nothing to keep the charity operating normally with the 3 operational staff in 2011. Remember this is the council that let Celtic off with delivering the major condition to their planning permission – their obligation to fund a separate road access. This is even when local residents complained continuously about heavy traffic through their neighbourhood streets. Ratepayers of East Dunbartonshire have to ask their councillors why decisions keep being made by their council to Celtic’s advantage and their, the ratepayers, detriment.
And Celtic, why when the charity was mothballed and being debt ridden, why did the club born from charitable beginnings not just write off the last payment? No they wanted and got their £68,377.20 payment from the EDC. Did Celtic demand the final payment from EDC and did the EDC just roll over and say we’ll pay the £68,377.20?
Why did NHS Greater Glasgow & Clyde not share the payment with EDC?
Scottish Enterprise left The Lennoxtown Initiative board as a Member when their last director resigned on 31 March 2008 which was noted in the charity’s annual report of that date. Which showed foresight. NHSGGC was still there though. So if EDC felt obligated why did NHSGGC not?
There was no way NHS GGC was going to tip in more funds – they had tipped in £463,000 in November 2006, the amount Celtic PLC paid for Lennoxtown in June 2006 less £30,000 in processing fees. And that amount had then been allocated by The Lennoxtown Initiative board, collectively by the Members directors including the 3 public authority directors, to the Celtic SLA Restricted Fund for the financial year ending 31 March 2007. So NHSGGC was never going to fund the SLA beyond the return of what Celtic paid for Lennoxtown which was a massive donation, as well as being very unsound – returning a purchasers funds via a charity.
How could the charity directors believe the whole Celtic SLA could be funded?
In February 2010, Chief Executive of The Lennoxtown Initiative, Brian McAleenan said that the Celtic SLA had ‘independently assessed’ by EDC as worth ‘841,860 over a nine-year period’:
Worth to whom: Celtic PLC obviously. And the ‘independent assessment’? Well EDC would not release the assessment. Perhaps they’ve given it to Audit Scotland for their inquiry?
So the question that should have been asked by the directors of The Lennoxtown Initative at the time the Celtic SLA obligation was taken is:
Apart from the £463,000 ‘donated’ by NHSGGC in November 2006, which was the amount Celtic paid for Lennoxtown, where was the rest of £841,860, a deficit of £378,860 going to come from?
At what point was The Lennoxtown Initiative charity trading insolvent due the obligation of the Celtic SLA that had been taken on? And why did the directors not put the charity in administration? Were they scared that it would attract attention that a charity was insolvent due to an ‘agreement’ that was created to refund Celtic their June 2006 payment for Lennoxtown? Is this the reason EDC stepped into the breach and took a bullet it had no legal obligation to take?
Over to you East Dunbartonshire ratepayers. It was your money that was used.