Penalised Saints face relegation

[ian1964 10,666]

Southampton have been effectively relegated after being docked 10 points by the Football League.

 

The ruling comes after Saints' parent company went into administration, though the club and administrators say they expect to launch an appeal.

 

Four points off safety with two games to go, Saints will lose 10 points if they stay up in the Championship.

 

And if they do not avoid finishing in the bottom three then the points penalty will take effect next season.

 

The south coast outfit had hoped to avoid the punishment as they argued that their parent company Southampton Leisure Holdings plc had gone into administration.

 

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Let's get behind our club and build for the future

 

WestLondonSaint

 

But a League investigation by "independent forensic accountants" found that the club and the holding company were "inextricably linked as one economic entity" and applied their mandatory penalty.

 

The League also found that: "The holding company has no income of its own; all revenue and expenditure is derived from the operation of Southampton Football Club and the associated stadium company.

 

"The holding company is solvent in its own right. It only becomes insolvent when account is taken of the position of Southampton football club and the other group companies."

 

Report (2 April): Southampton's future in administrator's hands

 

The statement added that there was no alternative other than to invoke the 10-point penalty.

 

It was also revealed that the company commissioned to look into the matter reported that co-operation with them was withdrawn towards the end of their enquiries.

 

Southampton are the fifth Football League team to be deducted points this season - Darlington entered administration, while Luton, Bournemouth and Rotherham were all penalised for coming out of administration without a Company Voluntary Agreement in place, as per the League's insolvency guidelines.

 

The punishment means Southampton are looking at life in English football's third tier for the first time in 50 years.

 

The 1976 FA Cup winners enjoyed a 27-year stay in the top flight before the club were relegated in 2005.

 

 

http://news.bbc.co.uk/sport1/hi/football/teams/s/southampton/8014811.stm

[Bluedell 5,508]

Strange. It is illegal for the club to continue trading if it is unable to pay its debts so I wonder why the directors have put the holding company into administration and not the club itself?