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Watford have brought in independent solicitors to help over the fake document allegation. Photograph: Nick Potts/PA
Watford have brought in independent solicitors to help over the fake document allegation. Photograph: Nick Potts/PA

Controversy over alleged fake financial document leaves Watford frustrated

This article is more than 7 years old
Club taking ‘extremely seriously’ accusation relating to ownership handover
Independent commission is likely to be set up to resolve issue

The Watford chief executive, Scott Duxbury, says the club are treating as “extremely serious” the accusation that they gave falsified financial information to the football authorities, as the controversy looked set to be resolved by an independent commission and, in the event of any wrongdoing being proved, a likely fine.

The affair relates to the ownership handover at the club from Giampaolo Pozzo to his son, Gino, in 2014. Watford – who are ninth in the Premier League – were in the Championship at the time and Pozzo Jr had to show the English Football League that he had sufficient capital in the bank to comply with his responsibilities.

A document was submitted to the EFL in July 2014, purporting to be on behalf of HSBC, one of the world’s biggest banks, which showed Hornets Investment Limited – the holding company that owns Watford – had the necessary credit of £7m. But, according to the Daily Telegraph, the document was a fake. The Telegraph reported it had been secured by the Watford executive chairman and non-executive director, Raffaele Riva, who is also a leading executive at Hornets Investment.

The EFL has opened a disciplinary investigation into the allegations and Watford, who have brought in an independent firm of solicitors, intend to report back with their findings early next month. The Football Association said that it had “made contact with the EFL and will continue to monitor the situation”. It is possible that it will become more closely involved. The Premier League is also monitoring.

The EFL will study the solicitor’s report and, perhaps in conjunction with the FA, will decide whether a charge should be brought against Watford. Jurisdiction is an issue, and not only because Watford are no longer an EFL club. If a charge were to be issued, the likelihood would be that an independent commission would be set up to decide on the most appropriate sanction in the event of a guilty verdict – which, almost certainly, would be a fine.

It has been reported that, in the most extreme scenarios, a points deduction could be a possibility. For that to be the case, causation – or cause and effect – would surely have be proved. In other words, did the allegedly faked bank letter and subsequent confirmation of Pozzo Jr as the Watford owner lead to a tangible benefit for the club on the field?

Riva told the Telegraph that he had asked a trusted associate to help him with the proof of funds letter from a bank. He said that he had not worked with the individual since the end of 2015. “For two years, I had no reason to believe the letter was anything but genuine,” Riva added.

According to the Daily Telegraph information received by the paper indicates that the third party responsible for obtaining the letter admits to doing so but had no intention of it being used in any formal filing. There is no indication that the Pozzo family or Duxbury was involved in the letter.

There is frustration at Watford because they can point out that Pozzo Jr has invested more than £20m in the club over the past two years. It is, therefore, plain to them that he had the required £7m in the first place. Why would there have been the need for a forged document? Furthermore, after Riva had seemingly sorted out the necessary paperwork relating to the handover of ownership, why should anybody else at the club have seen fit to double-check it?

Duxbury said: “The club had no prior knowledge of any concerns about the authenticity of the [proof of funds] document and Hornets Investments Ltd has invested over £20m into the club since the proof of funds 2014 document.

“The club takes this matter extremely seriously and has instructed independent solicitors to carry out an investigation into relevant matters and provide the EFL with the solicitor’s report early next month. The EFL has indicated it is happy with this course of action.”

An EFL spokesman said: “The club has been formally contacted by the EFL and is now required to provide a full and detailed response to the allegations. Once that response is received, it will be fully considered by the EFL and appropriate action will be taken under our rules and regulations.”

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