Northamptonshire police have launched a criminal investigation into alleged financial irregularities at Northampton Town over a £10.25m loan made by the local council for a new east stand, which has not been built. A team of around a dozen police officers served a warrant on the club this afternoon and began to seize documents and computer equipment for investigation.
At the same time the club announced its owner, David Cardoza, in whose tenure the £10.25m was borrowed from Northampton borough council, has agreed to sell his stake to Kelvin Thomas, the former Oxford United chairman, subject to finalising legal details. In addition to the questions over the £10.25m, Northampton have been in a cash flow crisis, with staff still not paid their wages for October, a winding-up petition served by Revenue & Customs and the council last week applying to put the club into administration.
As the Guardian reported this month, the council leader, Mary Markham, said she had asked Cardoza personally and in legal letters where the bulk of the £10.25m loan has gone and not received satisfactory answers.
Cardoza contracted with a north London property developer, Howard Grossman, to manage the east stand development via Grossman’s company, 1st Land Ltd, but the stand remains a shell. The developer, Buckingham Group, walked off the site last December, having been paid only £442,000, and said it had sued Grossman for £1.9m then owing, but did not get paid and put 1st Land into administration. Cardoza then promised his company would complete the development but Buckingham did not get paid again and suspended work in May.
In a statement Markham confirmed that Northampton council, after working with the police for some time, has made “a formal complaint about potential financial mismanagement of funds lent to Northampton Town Football Club”.
The police confirmed they have received the complaint, saying: “This relates to alleged financial irregularities surrounding the loan made by the council to Northampton Town football club. In response a team of officers this afternoon served a warrant at Sixfields Stadium in order to secure any documentation which may be relevant to the investigation. This is likely to be a complex and challenging inquiry and it would be inappropriate to comment further at this stage.” The police described staff at the club as being “fully co-operative at this stage”.
In an unprecedented move on Friday, staff issued a statement on the club’s behalf, demanding Cardoza complete the sale to Thomas. The statement said staff are hoping to receive some money from a hardship fund collected by the supporters’ trust, and described “extreme challenges” professionally, trying to run a club with its bank account frozen, and “a nightmare” personally, “where we have to find a way to feed our families and pay our bills”.
The club’s manager, Chris Wilder, speaking after a 2-1 win at Notts County on Saturday which took Northampton to third place in League Two, also pleaded for Cardoza to complete the sale to Thomas.
Cardoza and Grossman have denied any wrongdoing and said they have explanations for what has happened to the money. At the time of writing, neither had responded to requests for further comment.
The sale of the club was announced this afternoon, pending legal confirmation. A statement from the club read: “Chairman David Cardoza has reached an agreement to sell his controlling stake in Northampton to Kelvin Thomas. The deal is subject to the legal paperwork being completed which is expected to happen well in advance of Friday’s administration hearing.”
