Derby County set for ANOTHER inquiry and threat of deductions into allegedly breaches of EFL rules

19 August 2020 0 By Total Football News

Derby County set for ANOTHER inquiry into alleged breaches of EFL rules as club faces threat of multiple points deductions over £80m sale of Pride Park and £30m loan from equity firm

  • Several clubs have complained about a loan made to Derby by MSD UK Holdings
  • The club could face relegation should they be hit with multiple points penalties
  • EFL regulations ban clubs from losing more than £39m over a three-year period
  • Derby are already anticipating a verdict relating to a charge regarding Pride Park

Derby County could face another investigation into an alleged breach of EFL rules after several clubs complained about a loan undertaken from MSD UK Holdings Limited on the grounds it has led to a conflict of interest.

As revealed by Sportsmail, the Championship club borrowed around £30million from Michael Dell's private equity firm earlier this year, 12 months after Sunderland took out a similar loan from an American billionaire's hedge fund, leading other clubs to claim they have broken EFL rules.

Derby are expecting a verdict imminently from the independent panel convened by the EFL into their alleged breach of spending rules.

Derby face the threat of multiple points deductions that could risk their Championship status

Derby face the threat of multiple points deductions that could risk their Championship status

The existing charge relates to Derby's sale of Pride Park to a company owned by chairman Mel Morris for £80million, as well as their unusual method of valuing players for accounting purposes, which could lead to them being docked 12 points next season.

Derby would face almost certain relegation if hit with multiple points deductions, but will receive little sympathy from some rivals who are convinced they have been using creative accounting to get round the EFL's profit and sustainability rules, which prohibit clubs from losing more than £39m over a three-year period.

Sportsmail has learned several clubs have contacted the EFL demanding clarification on the loan from MSD UK Holdings, which they claim is a breach of rules.

A company belonging to club owner Mel Morris bought Derby's Pride Park home for £80million

A company belonging to club owner Mel Morris bought Derby's Pride Park home for £80million

EFL rules prohibit third party investment in multiple clubs, other than lending facilities provided by commercial banks.

The complainants' contention is that Derby's loan is not 'in the ordinary course of banking' as MSD are not registered with the banking regulator, unlike other equity houses who also provide funding to clubs.

The complaint is a matter for the EFL Board, who have the power to approve the loan of investigate further. Regulation 112 of the EFL rules gives the Board the authority to relax some of its provisions if it is deemed to be appropriate.

The EFL and Derby County declined to comment.

The club was charged in January by the EFL for recording excess losses under FFP regulations

The club was charged in January by the EFL for recording excess losses under FFP regulations

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This news item was provided by the EFL Championship News, Fixtures and Results | Mail Online website - the original link is: https://www.dailymail.co.uk/sport/football/article-8644537/Derby-County-set-inquiry-threat-deductions-allegedly-breaches-EFL-rules.html?ns_mchannel=rss&ito=1490&ns_campaign=1490